Seattle cannabis marketplace company Leafly announced Monday that it received formal notice from Nasdaq that it regained compliance with the stock exchange, averting a potential delisting due to a violation of a minimum bid price rule.
Leafly received a letter in November from Nasdaq notifying the company of a potential delisting due to poor stock performance. Nasdaq stipulates that a listed corporation’s stock price must uphold a minimum bid price of $1 for at least 10 consecutive business days in order to remain compliant.
Leafly said in May that it was in a pending hearings process with Nasdaq and was aiming to regain compliance with the minimum bid requirement within 180 days. The company last month completed a 1-for-20 reverse stock split, a tactic used to maintain compliance with minimum listing requirements by stock exchanges.
Leafly’s stock was trading around $6.30 as of Monday afternoon, with a market capitalization of about $13 million.
Founded in 2010, the company’s online marketplace lets customers shop and select cannabis products from licensed retailers. It also serves as an educational resource. Leafly generates revenue in part from monthly subscription fees paid by cannabis retailers to be listed on the platform and to access e-commerce tools.
Leafly is facing headwinds from decelerating digital ad spend and slowing sales across the marijuana industry following a pandemic surge.
The company reported second quarter revenue of $10.7 million, down 11% year-over-year, and a net loss of $1.4 million, down from a profit of $14.8 million in the year-ago period. Monthly active users dropped 6% to 7.3 million.
Leafly said it experienced churn from “out-of-business retailers and non-profitable accounts.” The company laid off 21% of its staff in March.
