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Chris Beals, WM Technology, Inc CEO joins the Yahoo Finance Live panel to discuss the latest on Weedmaps SPAC deal.
ZACK GUZMAN: Welcome back to Yahoo Finance Live. Last week, we had the culmination of the deal for what some call the Amazon of weed. You can call it the Yelp of weed. The company's name, though, Weedmaps. And the parent company going public via a SPAC merger with Silver Spike Acquisition Corp. Now a publicly traded company, giving investors an interesting way to play the growth in weed as the company is working on being the main e-commerce platform for a lot of these businesses to tap into a growing network of cannabis users.
And for more on that, I want to bring on the CEO of WM Technology, the parent company of Weedmaps. Chris Beals joins us now. Chris, good to be chatting with you again here, man. Congrats on finally closing the deal--
CHRIS BEALS: Thank you.
ZACK GUZMAN: --to get out there as a publicly traded company. I mean, talk to me about the growth that you guys are seeing now as a publicly traded company.
CHRIS BEALS: Yeah, you know, it's been a great path, a ton of hard work from the team. I think we were really aided by the fact that we have a very mature management team. And so getting through a process like this is never easy. And so it's really exciting to have officially had our debut on NASDAQ last week. But yeah, it's sort of the Google meets Shopify of the cannabis sector. We're in a really interesting place because I think we're still in the really early stages of growth.
Of a number of the states that have already licensed, only about 25% of cities and counties in California, for instance, have cannabis licensing. That's a huge opportunity. And then separately, if you look towards our business in the box, that suite of SaaS offerings, that continues to expand. Our adoption continues to grow rapidly.
And then as we look towards the sort of going forward, Virginia and New York, New Mexico, now Connecticut most likely, are all legislatively legalizing. And so on the go-forward, we see what I find to be this incredible acceleration of states of their own volition opening up. And so that really underscores a lot of opportunity on the go-forward.
ZACK GUZMAN: Yeah, maybe we can stick with the Shopify comparison there, too. Because I guess it is more fair when you think about SaaS and what you guys are trying to build. But last year, it was $160 million in revenue. You guys told investors you expect to beat 205 million this year. Is that still kind of the guidance when it comes to growth? And I mean, I guess, you know, if you focus in on that SaaS piece, important to flex that you guys don't necessarily touch at any point kind of the leaf, which is why you guys are able to trade publicly here. But what does that maybe look like if laws do change what the growth could be, if not just 205 million?
CHRIS BEALS: Yeah. So yeah, we are and are always going to position ourselves as the operating system for the cannabis sector. And so, yeah, the 205 is our guidance for this year. You know, really excited about the growth that I see ahead both this year and then in sort of the out periods as well. But, you know, I think the thing that's interesting for us is, we are not a touch the plant company. We never will be a touch the plant company.
But there's so much opportunity for streams of revenue that sits on the other side of something like federal legalization. We cannot offer any form of payment rails. There are a number of what I find to be incredibly exciting and, frankly, I think, lucrative product offerings we could provide or things we could do to help enable these businesses that we simply can't do until federal legalization comes. Because we take a very tight compliance view of sort of what is permissible and what is not permissible with this current state of affairs. We have state legalization and an ongoing federal prohibition. And so that is a really exciting catalyst for us on the go-forward is when that time comes, when we do see federal legalization.
AKIKO FUJITA: And so, Chris, let me just follow up on that growth question. Because you did say you're still in the early stages. To what extent can the value that you see here be unlocked without the federal legislation in place?
CHRIS BEALS: Yeah, there's so much growth that can happen without federal legalization. I think to that point, there's so much growth that can happen just in states that have legalized already. The simple reality is most jurisdictions that have legalized still have a retail density that is far too low to enable the legal market to supplant the illicit market. So most states that have legalized still see less than 50% of cannabis demand being met in the legal market. It's a huge area of growth for us or opportunity because we see the number of licenses continuing to increase as a factor of time.
And so, especially in the wake of COVID-19, as state and local governments look for ways to stimulate local economies, augment tax bases, that sort of thing, the cannabis sector is a great way to do that. And so we're seeing local jurisdictions move forward with accelerating licensing. So while federal legalization is, in and of itself, I think, a really singular catalyst event for us, our forward growth is really predicated on looking at the states that are already legalized and I think taking a fairly conservative view of what states may legalize on the go-forward, given that we see generally a material lag between when a state, say, New York legalizes and when the first licenses come online or something like adult use.
ZACK GUZMAN: Yeah, you're also not the only company maybe that's trying to tackle the issue of kind of helping cannabis businesses in these endeavors. You know, you can look at Leafly as maybe another one out there. But when you look at what Weedmaps is doing specifically maybe at the scale, I mean, what are the numbers you point to, to say, no, look, we're in the best position to eventually capitalize on that growth if we do see federal legalization change?
CHRIS BEALS: Yeah, I mean, the interesting thing is we're really in a universe of one when you look at the breadth of our offerings. It's that we have what I believe to be the largest marketplace out there available in every jurisdiction that's legalized. And then we're pairing it with a deep expertise in data. Because the simple reality is, we estimate we see over a 20% conversion rate from consumers that touch our services.
It's only enabled by us taking a really complex, essentially, pharmaceutical product and breaking down the product information in a way that gets people comfortable with effectively taking a pharmaceutical good that they're going to put in their body, understanding the different compounds, the different product types. And we attack that both through the data piece, but then the fact that we have our suite of software we provide, but then we also invest heavily in integration.
So we integrate with almost, for instance, every third party POS. We integrate with cannabis specific CRMs, that sort of thing. And so that's really where we position ourselves, is unlocking value, is really serving as that operating system where we can help these businesses, especially as they see margins compress, unlock revenue and profitability.
ZACK GUZMAN: Yeah, and very difficult, I would assume, for some of these legacy tech leaders to maybe hop into the industry and catch up with all the licensing around all of these things, too. As we know, cannabis heavily restricted when it comes to that. But appreciate you taking the time. Chris Beals, the CEO of WM Technologies, the parent company of Weedmaps, thanks again for the time.