Exclusive interview with Chris Beals, CEO of WM Technology
The Weedmaps platform is well known in the cannabis industry as a marketplace in the US and overseas, but WM Technology (NASDAQ: MAPS) is more than Weedmaps. The company has a growing SaaS and B2B software portfolio. CEO Chris Beals spoke with New Cannabis Ventures about the company’s products, its decision to go public through the SPAC channel, and plans for continued growth. Audio of the entire conversation is available at the end of this written summary.
The executive team
Beals joins WM Technology’s leadership team with experience advising technology and life science startups. Cannabis has a lot in common with the life sciences space, and Beals has a lot of experience scaling technology platforms quickly, which makes WM technology a natural choice.
He is joined on the company’s management team by COO Juanjo Feijoo, CFO Arden Lee, General Counsel Brian Camire and CIO and CTO Justin Dean. Under the leadership team, WM Technology has a series of general managers who serve as mini-CEOs for the company’s business lines, according to Beals.
In late 2020, WM Holding Company announced plans to go public on NASDAQ through a merger with Silver Spike Acquisition Corp, and the company completed the transaction in June. The company started 13 years ago, making it a seasoned ancillary cannabis supplier. The IPO made sense in terms of access to capital and as a differentiator for the company, according to Beals.
The SPAC route was attractive to the company due to the complexity of its business model. According to Beals, he’s had more time to explain why the company has a compelling business model than it would have had it gone through an IPO roadshow process.
The transaction was executed through an Up-C structure. WMH LLC shareholders retain their stake with the option of converting it into reserved shares in C-Corp.
The WM Technology Portfolio
WM Technology’s portfolio contains both a B2B product suite and the Weedmaps platform. On the B2B side, the company offers offerings such as an e-commerce tool for retailers to support consumer search discovery and the WM Retail point-of-sale software solution. The company has also expanded its offering with the acquisitions of delivery software solution Cannveya and cannabis integration software CannCurrent, as well as CRM and loyalty software company Sprout.
The company’s team has a strong background in mergers and acquisitions, which helps the company through the due diligence process and the post-merger integration phase. WM Technology already has an established integration ramp for its products that facilitates the integration of new technologies. These acquisitions are less than a quarter old and are already helping to grow the connective tissue of the company’s ecosystem, according to Beals.
On the marketplace side, Weedmaps connects cannabis retailers and brands with consumers and facilitates ordering.
As the company delves into its product roadmap, it plans to develop branding and analytics solutions. For brands, WM Technology aims to offer brand catalog management solutions. On the analytics side, the company is looking to leverage the industry data it has, exploring the possibility of subscription-based analytics products.
WM Technology is present in markets that have legalized cannabis in the United States and internationally in countries such as Canada, Spain, the Netherlands and Uruguay. The company’s Government Relations and Policy team, led by Vice President of Government Relations Bridget Hennessey, is working to open up new markets with a focus not only on legalization, but also on social equity.
Mergers & Acquisitions
The company is now positioned with a public equity currency, which could be attractive to potential acquisition targets. WM Technology gives founder-led small businesses the kind of platform that can help products scale and grow, Beals says. He expects the company to keep tabs on potential mergers and acquisitions.
The competitive landscape
WM Technology has such a broad portfolio that Beals considers it exists “in a universe of one”. Its competitors in the fragmented cannabis technology landscape tend to compete with individual solutions within its larger portfolio. The company has a broad integration strategy and is always working with other companies that may compete with parts of its portfolio.
Funding and Investor Relations
Over its 13-year history, the company has been largely seeded and profitable. It remains profitable as a public company and has a large cash hoard ($78 million as of September 30), according to Beals.
WM Technology has focused on finding funds and groups of investors interested in technology and cannabis. The company uses high-level strategy to defend its business and show current and potential investors what it does. Beals understands that stigma persists in the cannabis industry, and the company is working to dispel that notion.
Growth on the horizon
WM Technology reported third-quarter revenue of $50.9 million and expects fourth-quarter revenue of $50 million to $52 million. Beals pointed to a moderation in spending as cannabis operators grappled with competition from the illicit market. Last year, the company reset its revenue in Canada and expects to activate monetization in this market in the fourth quarter.
In 2022, the company could experience revenue growth in the 30s, growth driven by multiple factors. Beals pointed to the company’s acquisitions, new product offerings, net new customer growth and new market openings as growth factors.
As the business grows, it tracks a series of important metrics including customer retention, customer growth, net dollar retention, active users, GMV, adoption of several products, etc.
With its wide range of products, WM Technology has the opportunity to adopt organic cross-products. He also has the opportunity to deepen his relationship with cannabis brands. The company will also face the challenges of slow license growth in different markets and the complex regulatory environment. But Beals looks forward to 2022 as a banner year for WM Technology in terms of growth, market penetration and product adoption.
To learn more, visit WM Technology website. Listen to the full interview:
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