Aug 6 (Reuters) – Leafly, the leading cannabis-focused website, is in talks to merge with blank check firm Merida Merger Corp I in a deal that would value the combined company over $ 530 million dollars, three people familiar with the matter told Reuters.
The blank check company is owned by Merida Capital Holdings, one of Leafly’s largest donors, whose site visits have experienced a meteoric rise thanks to the relaxation of regulations in the United States and increasing use weeds.
A deal could be announced as early as next week, the source said, warning that talks could still fail.
Following the merger, Merida will hold at least one seat on the combined company’s board, while Leafly’s team will continue to be led by chief executive Yoko Miyashita, the sources said, declining to be named because the discussions were still confidential.
Leafly and Merida did not immediately respond to a comment.
The company plans to use the proceeds of the deal in part to invest more in its east coast business, the sources said.
Founded in 2010, Leafly was part of the cannabis-focused private equity group Privateer Holdings between 2012 and 2019.
The company provides ways for consumers to find cannabis stores to purchase the cannabis strains they want, operates a pickup and delivery service, and posts reviews on various cannabis products.
More than half of all North American cannabis dispensaries use Leafly’s platform for e-commerce, advertising, and other services.
Prospects for federal legalization and lockdowns caused by a pandemic pushed visits to Leafly’s site to over 220 million last year, up 12% from 2019, making it the site World’s most visited web on weeds.
The deal, if done, would be the latest in a nascent industry that has caught the blank check frenzy. Rival Weedmaps’ parent company struck a blank check deal in December to list on Nasdaq.
Leafly intends to appear on the Nasdaq under the symbol “LFLY,” one of the people said.
Blank check companies are publicly traded companies that use funds from their initial public offerings to buy private companies, thereby making them public.
Billionaire William “Beau” Wrigley Jr.’s Parallel and Jay-Z-backed California pot producer TPCO Holdings have also made similar deals to list their shares.
Report by Shariq Khan in Bangalore; Editing by Sweta Singh and Arun Koyyur
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