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What changed in WM TECHNOLOGY, INC.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of WM TECHNOLOGY, INC.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+466 added−437 removedSource: 10-K (2025-03-13) vs 10-K (2024-05-24)

Top changes in WM TECHNOLOGY, INC.'s 2024 10-K

466 paragraphs added · 437 removed · 358 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

59 edited+10 added−10 removed91 unchanged
Biggest changeAt the same time, these businesses must comply with a rapidly evolving legal and regulatory landscape that differs by state and across cities and counties within each state, creating challenges in the ability to scale in a capital-efficient way. 1 news.gallup.com - Grassroots Support for Legalizing Marijuana Hits Record 70% 2 Numbers of users aged 21 and older are from the 2022 National Survey on Drug Use and Health, number of adults in the United States aged 21 and older are from U.S.
Biggest changeFurther, brands are limited in their ability to market and sell directly and need to find ways to communicate to consumers. At the same time, these businesses must comply with a rapidly evolving legal and regulatory landscape that differs by state and across cities and counties within each state, creating challenges in the ability to scale in a capital-efficient way.
If placed under Schedule III, cannabis will cannabis will remain a controlled substance and state-legal programs will continue to operate outside of federally legal channels in their distribution of the substance particularly because no state operator holds a DEA registration to possess or distribute cannabis.
If placed under Schedule III, cannabis will remain a controlled substance and state-legal programs will continue to operate outside of federally legal channels in their distribution of the substance particularly because no state operator holds a DEA registration to possess or distribute cannabis.
We sell our Weedmaps for Business suite in the United States and have a limited number of non-monetized listings in several other countries including Austria, Canada, Germany, the Netherlands, Spain and Switzerland. We operate in the United States, Canada and other foreign jurisdictions where medical and/or adult cannabis use is legal under state or national law.
We sell our Weedmaps for Business suite in the United States and have a limited number of non-monetized listings in several other countries including Austria, Canada, Germany, the Netherlands, Spain, Switzerland, and Uruguay. We operate in the United States, Canada and other foreign jurisdictions where medical and/or adult cannabis use is legal under state or national law.
In December 2018, the U.S. government removed hemp and extracts of hemp from the CSA schedules through the Agriculture Improvement Act of 2018, Pub. L. 115-334 (the “2018 Farm Bill”). Accordingly, the production, sale and possession of hemp or extracts of hemp, including certain CBD products, no longer violate the CSA.
In December 2018, the U.S. government removed hemp and extracts of hemp from the CSA schedules through the Agriculture Improvement Act of 2018, Pub. L. 115-334 (the “2018 Farm Bill”). Accordingly, the production, sale and possession of hemp or extracts of hemp, including certain THC and CBD products, no longer violate the CSA.
We offer this functionality through a packaged software solution that includes (based on availability within any given market and state-level regulations) (i) a listing page with product menu on weedmaps.com, our iOS Weedmaps mobile application and our Android Weedmaps mobile application, which allows clients to disclose their license information, hours of operation, contact information, discount policies and other information that may be required under applicable state law, (ii) the ability to reserve products for pickup by consumers or delivery to consumers (either through weedmaps.com, on a white labeled WM Store website or third-party websites through our orders and menu embed product), (iii) customizable menus for brands, retailers and delivery operators to embed on their website, (iv) access to our APIs, including real-time connectivity between Weedmaps for Business to a POS to streamline workflows and promote compliance through accuracy and (v) analytics dashboards.
We offer this functionality through a packaged software solution that includes (based on availability within any given market and state-level regulations) (i) a listing page with product menu on weedmaps.com, our iOS Weedmaps mobile application and our Android Weedmaps mobile application, which allows clients to disclose their license information, hours of operation, contact information, discount policies and other information that may be required under applicable state law, (ii) the ability to reserve products for pickup by consumers or delivery to consumers (either through weedmaps.com, on a white labeled WM Store website or t hird-party websites through our orders and menu embed product), (iii) customizable menus for brands, retailers and delivery operators to embed on their website, (iv) access to our APIs, including real-time connectivity between Weedmaps for Business to a POS to streamline workflows and promote compliance through accuracy and (v) analytics dashboards.
Within the U.S., cannabis users (defined as adults, aged 21 and older, who have consumed cannabis in the past year) represent less than 22% of the total U.S. adult, aged 21 and older, population today (and less than 16% for those that consumed in the past month) 2 .
Within the U.S., cannabis users (defined as adults, aged 21 and older, who have consumed cannabis in the past year) represent less than 22% of the total U.S. adult, aged 21 and older, population today (and less than 16% for those that consumed in the past month).
In some jurisdictions, it is required by applicable law to showcase discounts. ◦ Other WM Ads solutions: Includes banner ads and promotion tiles on our marketplace as well as banner ads that can be tied to keyword searches.
In some jurisdictions, it is required by applicable law to showcase discounts. ◦ Other ads solutions: Includes banner ads and promotion tiles on our marketplace as well as banner ads that can be tied to keyword searches.
The states have implemented a patchwork of different laws on hemp and its extracts. Additionally, the Food & Drug Administration (“FDA”) claims that the Food, Drugs & Cosmetics Act significantly limits the legality of certain hemp-derived CBD products.
The states have implemented a patchwork of different laws on hemp and its extracts. Additionally, the Food & Drug Administration (“FDA”) claims that the Food, Drugs & Cosmetics Act significantly limits the legality of certain hemp-derived THC and CBD products.
United States and Territories Notwithstanding the trend toward further state legalization, the U.S. government continues to categorize cannabis as a prohibited controlled substance, and accordingly the cultivation, processing, distribution, sale, advertisement of sale and possession by our customers violate federal law, as discussed further in the sections entitled “Risk Factors—Risks Related to our Business and Industry.” On January 4, 2018, then U.S.
United States and Territories Notwithstanding the trend toward further state legalization, the U.S. government continues to categorize cannabis as a prohibited controlled substance, and accordingly the cultivation, processing, distribution, sale, advertisement of sale and possession by our customers violate federal law, as discussed further in the sections titled “Risk Factors—Risks Related to our Business and Industry.” On January 4, 2018, then U.S.
These investments serve to deepen the consumer experience with our platform and continue to provide a high level of support to our business clients. While the cannabis industry is still in the early innings of what could be decades of growth, we have established a leading position and a recognized brand given our 15-year operating history.
These investments serve to deepen the consumer experience with our platform and continue to provide a high level of support to our business clients. While the cannabis industry is still in the early innings of what could be decades of growth, we have established a leading position and a recognized brand given our 16-year operating history.
For additional information about Section 230, see the sections entitled “Business—Overview” and “Risk Factors—Risks Related to our Business and Industry.” Our clients are subject to licensing and related requirements under applicable laws and regulations, and our own compliance policies, and some of our clients currently and in the future may not be in compliance with all such requirements.
For additional information about Section 230, see the sections titled “Business—Overview” and “Risk Factors—Risks Related to our Business and Industry.” Our clients are subject to licensing and related requirements under applicable laws and regulations, and our own compliance policies, and some of our clients currently and in the future may not be in compliance with all such requirements.
We have a significant opportunity to grow our client base both within existing markets that are continuing to grow and new markets as they become open to regulated cannabis. We believe we are a nationally-recognized brand in the cannabis industry, and we are monetizing our platform in over 35 U.S. states and territories, as of December 31, 2023.
We have a significant opportunity to grow our client base both within existing markets that are continuing to grow and new markets as they become open to regulated cannabis. We believe we are a nationally-recognized brand in the cannabis industry, and we are monetizing our platform in over 35 U.S. states and territories, as of December 31, 2024.
As of December 31, 2023, we actively operated in over 35 U .S. states and territories that have adult-use and/or medical-use regulations in place. We define actively operated markets as those U.S. states or territories with greater than $1,000 monthly revenue. Substantially all of our revenue was generated in the United States.
As of December 31, 2024, we actively operated in over 35 U .S. states and territories that have adult-use and/or medical-use regulations in place. We define actively operated markets as those U.S. states or territories with greater than $1,000 monthly revenue. Substantially all of our revenue was generated in the United States.
We also offer other add-on products for additional fees, including: 7 Table of Contents • WM Ads: Ad solutions on the Weedmaps marketplace designed for clients to amplify their businesses and reach more highly engaged cannabis consumers throughout their buying journey including: ◦ Featured Listings: Premium placement ad solutions on high visibility locations on the Weedmaps marketplace (desktop and mobile) to amplify our clients’ businesses and maximize clients’ listings and deal presence. ◦ WM Deals: Discount and promotion pricing tools that let clients strategically reach prospective price-conscious cannabis customers with deals or discounts to drive conversion.
We also offer other add-on products for additional fees, including: • WM Ads: Ad solutions on the Weedmaps marketplace designed for clients to amplify their businesses and reach more highly engaged cannabis consumers throughout their buying journey including: ◦ Featured Listings: Premium placement ad solutions on high visibility locations on the Weedmaps marketplace (desktop and mobile) to amplify our clients’ businesses and maximize clients’ listings and deal presence. ◦ WM Deals: Discount and promotion pricing tools that let clients strategically reach prospective price-conscious cannabis customers with deals or discounts to drive conversion.
Social Impact 11 Table of Contents To support the growth of an inclusive cannabis industry, we participate in policy panels and organize educational sessions to educate attendees about the importance of social equity programs and other policy initiatives that are designed to ensure the ability of people of color and those impacted by the war on drugs to participate in the legal cannabis markets that are opening (i.e. social equity licensing programs).
Social Impact To support the growth of an inclusive cannabis industry, we participate in policy panels and organize educational sessions to educate attendees about the importance of social equity programs and other policy initiatives that are designed to ensure the ability of people of color and those impacted by the war on drugs to participate in the legal cannabis markets that are opening (i.e. social equity licensing programs).
This also allows clients to disclose their license information, hours of operation, contact information, discount policies and other information that may be required under applicable state law. • WM Orders: Software for retailers to receive pickup and delivery orders directly from a Weedmaps listing and connect orders directly with a client’s POS system (for certain POS systems).
This also allows clients to disclose their license information, hours of operation, contact information, discount policies and other information that may be required under applicable state law. • WM Orders: Software for retailers to receive pickup and delivery orders directly from a Weedmaps listing and connect orders directly with a client’s point-of-sale (“POS”) system (for certain POS systems).
We do not yet regard these countries as viable marketplaces for our products, though we have ongoing tests of a small number of listings in several markets where listings are legally permissible. 14 Table of Contents Available Information Our Internet address is www.weedmaps.com. Our investor relations website is located at https://ir.weedmaps.com.
We do not yet regard these countries as viable marketplaces for our products, though we have ongoing tests of a small number of listings in several markets where listings are legally permissible. Available Information Our Internet address is www.weedmaps.com. Our investor relations website is located at https://ir.weedmaps.com.
Weedmaps for Business is a set of eCommerce-enablement tools designed to help retailers and brands get the best out of the Weedmaps’ consumer experience, create labor efficiencies and manage compliance needs. We hold a strong belief in the importance of enabling safe, legal access to cannabis for consumers worldwide.
Weedmaps for Business is a set of eCommerce-enablement tools designed to help retailers and brands get the best out of the Weedmaps’ consumer experience, create labor efficiencies and manage compliance needs. 7 Table of Contents We hold a strong belief in the importance of enabling safe, legal access to cannabis for consumers worldwide.
We believe our Weedmaps for Business is the industry’s only comprehensive business-in-a-box solution and incorporates embedded compliance functionality so that our clients comply with state law through integrated software solutions ranging from live menus, logistics and fulfillment, POS integrations, inventory management and data and analytics.
We believe our Weedmaps for Business is the industry’s only comprehensive solution and incorporates embedded compliance functionality so that our clients comply with state law through integrated software solutions ranging from live menus, logistics and fulfillment, POS integrations, inventory management and data and analytics.
In January 2023, FDA affirmed that the agency will not compromise—or create new standards—in evaluating or permitting cannabis or cannabinoid compounds and products, and particularly cannabidiol (“CBD”), indicating that Congress must take action to end the stalemate between federal and state laws and the purgatory of FDA selective enforcement.
In January 2023, FDA affirmed that the agency will not compromise—or create new standards—in evaluating or permitting cannabis or cannabinoid compounds and products, and particularly CBD, indicating that Congress must take action to end the stalemate between federal and state laws and the purgatory of FDA selective enforcement.
We intend to continue expanding our suite of valuable advertising and software solutions and the functionality of our Weedmaps for Business solutions through additional offerings of premium analytics and 10 Table of Contents loyalty tools, among other solutions, which we intend to monetize through additional higher priced tiers within our subscription offering.
We intend to continue expanding our suite of valuable advertising and software solutions and the functionality of our Weedmaps for Business solutions through additional offerings of premium analytics and loyalty tools, among other solutions, which we intend to monetize through additional higher priced tiers within our subscription offering.
To drive awareness, we apply a range of strategies from broad integrated marketing campaigns, such as our work each year on April 20 th (“420”), to local, on-the ground events in partnership with brands and retailers like Jack in the Box.
To drive awareness, we apply a range of strategies from broad integrated marketing campaigns, such as our work each year on April 20 th (“420”), to local, on-the ground events in partnership with brands and retailers.
For more information, see the section entitled “Risk Factors—Risks Related to our Business and Industry.” Seasonality The cannabis industry has certain industry holidays that in recent years have resulted in increased purchases by cannabis consumers. Such “holidays” include, but are not limited to 420, July 10 th and the Wednesday before Thanksgiving (“Green Wednesday”).
For more information, refer to the section titled “Risk Factors—Risks Related to our Business and Industry.” Seasonality The cannabis industry has certain industry holidays that in recent years have resulted in increased purchases by cannabis consumers. Such “holidays” include, but are not limited to 420, July 10 th and the Wednesday before Thanksgiving (“Green Wednesday”).
As of December 31, 2023, we have been issued trademark registrations in the United States, Canada, Japan, the European Union, the United Kingdom, Mexico and Australia.
As of December 31, 2024, we have been issued trademark registrations in the United States, Canada, Japan, the European Union, the United Kingdom, Mexico and Australia.
Based on our internal research, we believe the minimum level of acceptable retail density to have a healthy and functioning licensed market is one licensed retailer per 10,000 residents. Many of the U.S. states where we operate today are still under-penetrated with low levels of licensed retail density.
Based on our internal research, we believe the minimum level 9 Table of Contents of acceptable retail density to have a healthy and functioning licensed market is one licensed retailer per 10,000 residents. Many of the U.S. states where we operate today are still under-penetrated with low levels of licensed retail density based on our internal data.
Members of the U.S. Congress from both parties have introduced bills to end the federal cannabis prohibition, by de-scheduling cannabis completely and regulating it. In addition to broader reforms, this session has seen additional incremental reform bills that aim to increase research, cement medical cannabis patients’ rights, or facilitate state-legal cannabis.
Congress from both parties have introduced bills to end the federal cannabis prohibition, by de-scheduling cannabis completely and regulating it. In addition to broader reforms, this session has seen additional incremental reform bills that aim to increase research, cement medical cannabis patients’ rights, or facilitate state-legal cannabis.
Our dedicated, best-in-class Talent Acquisition team is focused on 12 Table of Contents finding and attracting diverse and capable talent, and our People & Workplace team is focused on making us a world class employer of choice for that talent once they get here.
Our dedicated, best-in-class Talent Acquisition team is focused on finding and attracting diverse and capable talent, and our People & Workplace team is focused on making us a world class employer of choice for that talent once they get here.
Eight additional states have legalized forms of low-potency cannabis, for select medical conditions. Only three states continue to prohibit cannabis entirely.
Eight additional states have legalized forms of low-potency cannabis, for select medical conditions. Only two states continue to prohibit cannabis entirely.
Our executive leadership team has extensive and relevant professional experience spanning the technology, consumer, retail, legal and financial services industries, with a track record of operational execution and driving growth. Our Executive Chair and Principal Executive Officer, Douglas Francis is a co-founder of WM Technology and, prior to 2019, had served as its Chief Executive Officer.
Our executive leadership team has extensive and relevant professional experience spanning the technology, consumer, retail, legal and financial services industries, with a track record of operational execution and driving growth. Our Chief Executive Officer, Douglas Francis is a co-founder of WM Technology and, prior to 2024, had also served as Executive Chair.
For additional information about the risks to our business related to competition, see the section entitled “Risk Factors-Risks Related to our Business and Industry—We currently face intense competition in the market and we expect competition to further intensify as the cannabis industry continues to evolve.” Sales and Marketing Sales Our sales team is primarily based out of our Irvine, California headquarters.
For additional information about the risks to our business related to competition, see the section titled “Risk Factors—Risks Related to our Business and Industry—We currently face intense competition in the market and we expect competition to further intensify as the cannabis industry continues to evolve.” 10 Table of Contents Sales and Marketing Sales Our sales team is primarily based out of our Irvine, California headquarters.
Currently , thirty-nine states, the District of Columbia, Puerto Rico, the Virgin Islands, Guam and the Northern Mariana have legalized some form of cannabis use for certain medical purpose s. Twenty-four of those states, the District of Columbia, Guam and Northern Mariana have legalized cannabis for adults for non-medical purposes as well (sometimes referred to as adult or recreational use).
Currently, forty states, the District of Columbia, Puerto Rico, the Virgin Islands, Guam and the Northern Mariana have legalized some form of cannabis use for certain medical purposes. Twenty-four of those states, the District of Columbia, Guam and Northern Mariana have legalized cannabis for adults for non-medical purposes as well (sometimes referred to as adult or recreational use).
As more businesses and users join the platform, we gain a richer trove of industry data to perform market research and assist in product development and improvement. The result is a self-reinforcing, mutually beneficial, two-sided network effect, which we believe is difficult to replicate. • A Fully-Integrated Business-in-a-Box SaaS Solution Specific to the Cannabis Industry.
As more businesses and users join the platform, we gain a richer trove of industry data to perform market research and assist in product development and improvement. The result is a self-reinforcing, mutually beneficial, two-sided network effect, which we believe is difficult to replicate. 8 Table of Contents • A Fully-Integrated Solution Specific to the Cannabis Industry.
First, in 2022, President Biden signed into law the “Medical Marijuana and Cannabidiol Research Expansion Act,” a bill aimed at easing restrictions on cannabis research -- bipartisan legislation which is the first standalone cannabis reform bill to pass both the House and Senate.
Prior to the current administration, President Biden signed into law the “Medical Marijuana and Cannabidiol Research Expansion Act,” a bill aimed at easing restrictions on cannabis research -- bipartisan legislation which is the first standalone cannabis reform bill to pass both the House and Senate.
Competition Our direct competitors for individual components or parts of our platform include cannabis-focused, technology companies like Leafly, Dutchie and Jane Technologies and a variety of cannabis-focused marketing and advertising technology solutions.
Competition Our direct competitors for individual components or parts of our platform include cannabis-focused marketplace like Leafly (for retail listing pages), cannabis-focused technology companies like Dutchie and Jane Technologies and a variety of cannabis-focused marketing and advertising technology solutions.
Challenges in Our End-Markets Despite cannabis being a large and growing sector in the United States, we believe that cannabis is unlike many other consumer goods and retail categories for a number of reasons: • Cannabis as a regulated industry is still in a nascent stage of development. 8 Table of Contents • Cannabis users (defined as adults, aged 21 and older, who have consumed cannabis in the past year) represent less than 22% of the total U.S. adult, aged 21 and older, population today 3 (and less than 16% for those that consumed in the past month) 3 without a “typical” user profile 4 . • Regulations governing cannabis are complex and vary state-by-state and by city and county within states. • Cannabis has wide variance in characteristics that make it complex for consumers to make an informed purchase decision. • Cannabis is a perishable good with a lack of product homogeneity. • Brands are only in the early stages of establishing a consumer presence. • Competition with the illicit market is still an issue, particularly in states like California. • The industry has experienced periods of price deflation, including over the past two years, impacting the financial performance of businesses across the value chain. • Limited access to capital (relative to other industries) and limitations under Section 280E of the Internal Revenue Code of 1986, as amended (the “Code”) on deduction or credit for certain expenses of cannabis business can reduce the cash flow and liquidity of many industry participants.
Challenges in Our End-Markets Despite cannabis being a large and growing sector in the United States, we believe that cannabis is unlike many other consumer goods and retail categories for a number of reasons: • Cannabis as a regulated industry is still in a nascent stage of development. • Cannabis users (defined as adults, aged 21 and older, who have consumed cannabis in the past year) represent less than 22% of the total U.S. adult, aged 21 and older, population today (and less than 16% for those that consumed in the past month) 3 without a “typical” user profile. • Regulations governing cannabis are complex and vary state-by-state and by city and county within states. • Cannabis has wide variance in characteristics that make it complex for consumers to make an informed purchase decision. • Cannabis is a perishable good with a lack of product homogeneity. • Brands are only in the early stages of establishing a consumer presence. • The illicit market continues to pose a major challenge, directly competing with licensed operators burdened by high taxes and complex regulations. • The industry has experienced periods of price deflation, including over the past three years, impacting the financial performance of businesses across the value chain. • Limited access to capital (relative to other industries) and limitations under Section 280E of the Internal Revenue Code of 1986, as amended (the “Code”) on deduction or credit for certain expenses of cannabis business can reduce the cash flow and liquidity of many industry participants.
With the development of Weedmaps for Business, we offer an end-to-end platform for licensed cannabis retailers to comply with state law. We sell a monthly subscription offering to retailer and brand clients as well as upsell and add-on offerings to licensed clients.
With Weedmaps for Business, we offer an end-to-end platform for licensed cannabis retailers to comply 6 Table of Contents with state law. We sell a monthly subscription offering to retailer and brand clients as well as upsell and add-on offerings to licensed clients.
However, some fear that the DEA or FDA may impose additional requirements or begin to target enforcement on state cannabis programs.
However, some fear that if cannabis were successfully rescheduled the DEA or FDA may impose additional requirements or begin to target enforcement on state cannabis programs.
While many traditional paid channels are still not available to cannabis industry brands (Google search and some social platforms for example) we have an evolving playbook of tactics to acquire new users that includes a combination of targeted out-of-home, programmatic display, and affiliate marketing campaigns. We augment our paid efforts with social media and SEO tactics to drive organic traffic.
While many traditional paid channels are still not available to cannabis industry brands (Google search and some social platforms for example) we have an evolving playbook of tactics to acquire new users that includes a combination of targeted out-of-home, programmatic display, and affiliate marketing campaigns.
We also offer add-on and a la carte products and services for additional fees, as discussed below. 5 Table of Contents The state-legal cannabis industry in the United States has grown consistently in recent years and was estimated to be between approxima tely $27-$28 billion in 2023, according to Wall Street analyst estimates, and is expected by some estimates to grow to $40 billion by 2027, assuming a continued pace of new state legalization, with 70% 1 of U.S. adults since 2020 in support of having legal access to cannabis.
We also offer add-on and a la carte products and services for additional fees, as discussed below. 5 Table of Contents The state-legal cannabis industry in the United States has grown consistently in recent years and was estimated to be between approximately $30-31 billion in 2024, according to Wall Street analyst estimates, and is expected by some estimates to grow to approximately $35 billion by 2027, assuming a continued pace of new state legalization, with 68% of U.S. adults in support of having legal access to cannabis.
While enforcement regarding hemp-derived products has generally been limited, changes in enforcement priorities or further federal regulations could negatively impact our clients that sell such products, which could adversely impact our business, operating results, financial condition, brand and reputation.
While enforcement regarding hemp-derived products has generally been limited, changes in enforcement priorities or further federal regulations could negatively impact our clients that sell such products, which could adversely impact our business, operating results, financial condition, brand and reputation; at the same time, lack of federal enforcement could negatively impact our cannabis clients that compete against such products, which could adversely impact our business, operating results, financial condition, brand and reputation.
While the timing of federal reform remains unknown, it is expected that federal policy on cannabis will continue becoming more, rather than less, permissive and legislative efforts to legalize cannabis or cannabis banking at the national level are likely to progress in 2024. Some of our retail clients sell products with hemp-derived cannabinoids, including CBD.
Nevertheless, while the timing of federal reform remains unknown, it is expected that federal policy on cannabis will continue becoming more, rather than less, permissive and legislative efforts to legalize cannabis banking at the national level may progress in 2025. Some of our retail clients sell products with hemp-derived cannabinoids, including, tetrahydrocannabinol (“THC”) and cannabidiol (“CBD”) products.
On the client side, as of December 31, 2023, there were approximately 11,900 retail licenses across the United States with medical and/or adult-use regulations in place, which is an effective retail density of approximately one retail license pe r 21,570 resid ents across these markets in the aggregate, based on data available from individual governmental cannabis license databases and the U.S.
On the client side, as of December 31, 2024, there were approximately 12,000 retail licenses across the United States with medical and/or adult-use regulations in place, which is an effective retail density of approximately one retail license per 21,750 residents across these markets in the aggregate, based on data available from individual governmental cannabis license databases and the U.S.
With $188.0 million in revenue and 5,419 average monthly paying clients for the year ended December 31, 2023, we believe we are the largest two-sided platform for cannabis businesses and consumers in the United States.
With $184.5 million in revenues and 5,077 average monthly paying clients for the year ended December 31, 2024, we believe we are the largest two-sided platform for cannabis businesses and consumers in the United States.
We also rely on non-disclosure agreements, invention assignment agreements, intellectual property assignment agreements, or license agreements with employees, independent contractors, consumers, software providers and other third parties, which protect and limit access to and use of our proprietary intellectual property.
Our trademarks and domain names are material to our business and brand identity. 11 Table of Contents We also rely on non-disclosure agreements, invention assignment agreements, intellectual property assignment agreements, or license agreements with employees, independent contractors, consumers, software providers and other third parties, which protect and limit access to and use of our proprietary intellectual property.
We believe we compete favorably based on these factors . On May 16, 2024, President Biden announced that the U.S. Attorney General initiated proceedings to transfer cannabis from Schedule I to Schedule III, through a Notice of Proposed Rulemaking ("NPRM") published on May 21, 2024 This decision is expected to have far reaching implications that are not yet fully understood.
We believe we compete favorably based on these factors . On May 16, 2024, President Biden announced that the U.S. Attorney General initiated proceedings to transfer cannabis from Schedule I to Schedule III, through a Notice of Proposed Rulemaking ("NPRM") published on May 21, 2024.
In addition, for our retail listing pages, our platform may also compete with current or potential products and solutions offered by internet search engines and advertising networks like Google, Yelp, various other newspaper, television and media companies, as well as outdoor billboard advertising.
In addition, for our retail listing pages, our platform may also compete with current or potential products and solutions offered by internet search engines and advertising networks like Google, general two-sided networks like Yelp, various other newspaper, television and media companies, outdoor billboard advertising, and online merchant platforms, such as Shopify, Square and Lightspeed, or delivery companies like DoorDash.
People Operations and Human Capital Resources As of December 31, 2023, we had 440 full-time employees and 19 temporary employees, including 196 in engineering, product and design, 181 in sales and marketing and 82 in general and administrative. Of these employees, 450 are located in the United States and 9 are located in Canada.
People Operations and Human Capital Resources As of December 31, 2024, we had 440 full-time employees and 17 temporary employees, including 171 in engineering, product and design, 191 in sales and marketing and 95 in general and administrative. Of these employees, 450 are located in the United States and 7 are located in Canada.
Census data 6 Table of Contents Our Product and Solution Ecosystem Our solutions are designed to address the challenges facing cannabis consumers and businesses.
Our Product and Solution Ecosystem Our solutions are designed to address the challenges facing cannabis consumers and businesses.
There will then be a 60-day public comment period before the rule is potentially finalized. If this move is confirmed, it would be a momentous change whose full implications are currently unknown. The DEA’s decision to reclassify cannabis would neither legalize nor likely eliminate current state cannabis program.
If this move is confirmed, it would be a momentous change whose full implications are currently unknown. The DEA’s decision to reclassify cannabis would neither legalize nor likely eliminate current state cannabis program.
Further, we own several domain names, including: weedmaps.com, marijuana.com, cannabis.com, wmpolicy.com, themuseumofweed.com, wm-retail.com, wmforbusiness.com and WM.store. Our trademarks and domain names are material to our business and brand identity.
Further, we own several domain names, including: weedmaps.com, marijuana.com, cannabis.com, wmpolicy.com, themuseumofweed.com, wm-retail.com, wmforbusiness.com and WM.store.
As we increase the number of users on our platform, we generate more engagements and can more easily persuade our business clients to consolidate their service providers by switching to our value-priced Weedmaps for Business bundled solution. As we continue to increase the number of businesses on our marketplace, we in turn become a more compelling platform for users.
Increasing the number of users on our platform, generates more engagements, which we expect can more easily persuade our business clients to consolidate their service providers by switching to our value-priced Weedmaps for Business bundled solution. Increasing the number of businesses on our marketplace, allows us to be a more compelling platform for users.
No reversal of that policy of prosecutorial discretion is expected under a Biden administration given his actions on cannabis to date, and the statements of Attorney General Merrick Garland on the subject, although prosecutions against state-legal entities cannot be ruled out entirely at this time.
No reversal of that policy of prosecutorial discretion is 12 Table of Contents expected under a Trump administration given his prior administrations actions on cannabis and statements while campaigning, although prosecutions against state-legal entities cannot be ruled out entirely at this time.
The capital-efficiency of our business model is evidenced by our historical robust margin profile and, prior to 2022, our track record of positive Adjusted EBITDA and cash flows from operating activities, • Operationally-Focused Management Team with Deep Experience.
Our offerings can be efficiently customized to new markets to facilitate expansion, which provides significant flexibility to scale and enter new markets with minimal investment. The capital-efficiency of our business model is evidenced by our historical robust margin profile and, our track record of positive Adjusted EBITDA and cash flows from operating activities. • Operationally-Focused Management Team with Deep Experience.
We believe that there are tremendous growth opportunities for us within our existing markets as retail licenses continue to be issued, and states move towards, and eventually beyond, the one retail license per 10,000 people ratio. As of December 31, 2023, there were approximately 11,900 existing retail and delivery licenses across the United States.
Despite recent and near term challenges, we believe that there are substantial growth opportunities for us in the long-term within our existing markets as retail licenses continue to be issued, and states move towards, and eventually beyond, the one retail license per 10,000 people ratio.
On August 29, 2023, HHS issued a letter to the DEA recommending that cannabis be reclassified as a Schedule III controlled substance under the CSA. On May 16, 2024, President Joe Biden announced that his administration is officially moving to reclassify cannabis from a Schedule I to a Schedule III controlled substance under the CSA.
On August 29, 2023, HHS issued a letter to the DEA recommending that cannabis be reclassified as a Schedule III controlled substance under the CSA.
Furthermore, we believe that Section 230 provides immunity from civil and state criminal liability to internet service provider intermediaries in the United States, such as us, for content provided on their platforms that they did not create or develop.
We have been neither a defendant in a criminal action nor the subject of a civil or regulatory enforcement proceeding, prosecuted by a U.S. governmental authority based on our provision of products and solutions to the cannabis industry. 13 Table of Contents Furthermore, we believe that Section 230 provides immunity from civil and state criminal liability to internet service provider intermediaries in the United States, such as us, for content provided on their platforms that they did not create or develop.
For example, rescheduling may increase competitors in this space if non-cannabis technology companies who have previously avoided the space now decide to enter the market.
Should cannabis ultimately be rescheduled to Schedule III, this decision is expected to have far reaching implications that are not yet fully understood. For example, rescheduling may increase competitors in this space if non-cannabis technology companies who have previously avoided the space now decide to enter the market.
Census data 4 Per 2022 National Survey of Drug Use and Health and U.S. Census data 9 Table of Contents their business objectives and performance. We constantly strive to generate product ideas through this deep engagement with our clients, as well as empirical research.
Our sales team frequently engages with our paid clients about the products they use, as well as their business objectives and performance. We constantly strive to generate product ideas through this deep engagement with our clients, as well as empirical research.
To engage and retain existing users, we apply lifecycle tactics, leveraging our first party data to personalize touch points based on user interests. In 2023, our marketing function continued to focus on ways to drive greater adoption of our platform through new and innovative tactics such as in-app promotions and shopping tools, and self-help chat bots.
We augment our paid efforts with social media and search engine optimization tactics to drive organic traffic. To engage and retain existing users, we apply lifecycle tactics, leveraging our first party data to personalize touch points based on user interests.
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Further, brands are limited in their ability to market and sell directly and need to find ways to communicate to consumers.
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As of December 31, 2024, there were approximately 12,000 existing retail and delivery licenses across the United States.
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In December 2023, we completed the sunset of WM AdSuite, WM CRM and WM Screens product offerings as we continue to focus our efforts on other Weedmaps for Business products that support the Weedmaps marketplace and improve the eCommerce experience for our clients and users.
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For example, in January 2025, DoorDash announced an expanded offering to allow customers of legal age to purchase hemp derived THC and CBD products from merchants.
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Our sales team frequently engages with our paid clients about the products they use, as well as 3 Numbers of users 21 and above are from the 2022 National Survey on Drug Use and Health, number of 21 and above adults in the United States are from U.S.
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We have reinvested in our own on-the-ground and field marketing presence and are increasing the types and cadence of client events. These events and in-store activations allow us to engage with consumers at the point of purchase and to engage directly with our clients, allowing us to understand each of their needs and challenges and foster goodwill.
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Our offerings can be efficiently customized to new markets to facilitate expansion, which provides significant flexibility to scale and enter new markets with minimal investment.
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Following that recommendation, DOJ issued a Notice of Proposed Rulemaking (the “NPRM”) proposing to reschedule cannabis, and DEA issued a notice for a hearing which commenced in November 2023, but the hearing is currently stayed pending an administrative interlocutory appeal. It is unclear when the hearing will recommence, and whether the new administration will support rescheduling.
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Given the strength of our brand, we have continued to see strength in the performance of our marketing tactics in what can be a crowded market, easing the acquisition or upsell process for our sales team.
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Attorney General, Pam Bondi has repeatedly declined to specify her stance on cannabis policy issues, responding to all related questions from senators that she will give “careful consideration after consulting with appropriate Department officials.” She also avoided specifying her stance on the federal enforcement of cannabis laws or how she would approach states where cannabis is legal.
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During his campaign, President Biden promised federal reform on cannabis, including decriminalization generally and has made history in several impactful ways.
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Therefore, key questions remain about how Attorney General Bondi would handle both the rescheduling process and federal enforcement priorities.
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Attorney General, Merrick Garland, is expected to not interfere with cannabis businesses operating in compliance with states’ laws. During his confirmation hearing before the U.S.
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Despite President Trump's recent support for cannabis rescheduling and ending arrests for personal use, Attorney General Bondi's past record as Florida Attorney General shows opposition to medical cannabis legalization, including defending a ban on smoking medical cannabis in 2018, which has raised concerns among advocates about her approach at the federal level.
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Senate, Judge Garland testified that prosecuting state-legal cannabis companies would not be a “useful use of limited resources.” In April, 2022, Attorney General Garland reiterated that prosecuting the possession of cannabis is “not an efficient use” of federal resources, especially “given the ongoing opioid and methamphetamine epidemi c[s]” fa cing the nation.
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It is unclear whether the status quo of federal non-enforcement will continue for the foreseeable future; however, increased enforcement would be a marked departure from the prior ten years and inconsistent with President Trump’s purported views on cannabis. Members of the U.S.
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On March 1, 2023, Attorney General Garland confirmed that his Department 13 Table of Contents is continuing work on a new cannabis enforcement guidance, which he states would be “very close to what was done in the Cole memorandum.” Although any such guidance issued would not have the force of law, and could not be enforced by the courts, such a guidance would likely mean that the status quo of federal non-enforcement is likely to continue for the foreseeable future.
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Since the recent election, however, there has also been proposed anti-cannabis legislation, for example, a bill aiming to ensure 280E continues to apply to state cannabis businesses even if cannabis is ultimately rescheduled to Schedule III.
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We have been neither a defendant in a criminal action nor the subject of a civil or regulatory enforcement proceeding, prosecuted by a U.S. governmental authority based on our provision of products and solutions to the cannabis industry.
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Furthermore, industry stakeholders (including cannabis industry stakeholders) have urged Congress to reassess the legality of certain hemp THC products.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe restatement of our prior quarterly financial statements may affect investor confidence and raise reputational issues and may subject us to additional risks and uncertainties, including increased professional costs and the increased possibility of legal proceedings and regulatory inquiries As discussed in the Explanatory Note preceding Part I, Item I above and in Note 2 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K, we determined to restate our unaudited condensed consolidated financial statements as of and for the three months ended March 31, 2023, six months ended June 30, 2023 and nine months ended September 30, 2023 after we identified errors in the application of our revenue recognition policies related to the cash collection of a certain subset of our customers that had been placed on a cash basis.
Biggest changeWe previously restated our financial statements for several quarters, which resulted in unanticipated costs and may adversely affect investor confidence, our stock price, our ability to raise capital, raise reputational issues and may subject us to additional risks and uncertainties, including the increased possibility of legal proceedings and regulatory inquiries On May 20, 2024, management and the audit committee of our board of directors concluded that our previously issued unaudited condensed consolidated financial statements as of and for the three months ended March 31, 2023, six months ended June 30, 2023 and nine months ended September 30, 2023 included in our Quarterly Reports on Form 10-Q filed with the SEC on May 9, 2023, August 9, 2023 and November 8, 2023, respectively (collectively, the “Affected Periods”), were materially misstated and should no longer be relied upon due to identified errors in the application of our revenue recognition policies related to the cash collection of a certain subset of our customers that had been placed on a cash basis.
The factors affecting our brand recognition and reputation that are within our control include the following: • the efficacy of our marketing efforts; • our ability to maintain a high-quality, innovative and error- and bug-free platform; • our ability to maintain high satisfaction among clients and consumers; • the quality and perceived value of our platform; • successfully implementing and developing new features, including alternative revenue streams; • our ability to obtain, maintain and enforce trademarks and other indicia of origin that are valuable to our brand; • our ability to successfully differentiate our platform from competitors’ products; 20 Table of Contents • our compliance with laws and regulations, including those applicable to any political action committees affiliated with us and to our registered lobbying activities; • our ability to provide client support; and • any actual or perceived data breach or data loss, or misuse or perceived misuse of our platform.
The factors affecting our brand recognition and reputation that are within our control include the following: 20 Table of Contents • the efficacy of our marketing efforts; • our ability to maintain a high-quality, innovative and error- and bug-free platform; • our ability to maintain high satisfaction among clients and consumers; • the quality and perceived value of our platform; • successfully implementing and developing new features, including alternative revenue streams; • our ability to obtain, maintain and enforce trademarks and other indicia of origin that are valuable to our brand; • our ability to successfully differentiate our platform from competitors’ products; • our compliance with laws and regulations, including those applicable to any political action committees affiliated with us and to our registered lobbying activities; • our ability to provide client support; and • any actual or perceived data breach or data loss, or misuse or perceived misuse of our platform.
We are subject to industry standards, governmental laws and regulations, contractual obligations, industry standards, policies, and other obligations governing privacy, data protection and information security, and any actual or perceived failure to comply with such obligations could harm our business.
We are subject to industry standards, governmental laws and regulations, contractual obligations, policies, and other obligations governing privacy, data protection and information security, and any actual or perceived failure to comply with such obligations could harm our business.
For example, under the GDPR, companies may face temporary or definitive bans on data processing and other corrective actions; fines of up to 20 million Euros under the EU GDPR, 17.5 million pounds sterling under the UK GDPR or, in each case, 4% of annual global revenue, whichever is greater; or private litigation related to processing of personal data brought by classes of data subjects or consumer protection organizations authorized at law to represent their interests.
For example, under the GDPR, companies may face temporary or definitive bans on data processing and other corrective actions; fines of up to 20 million Euros under the EU GDPR, 17.5 million pounds sterling under the UK GDPR or, in each case, up to 4% of annual global revenue, whichever is greater; or private litigation related to processing of personal data brought by classes of data subjects or consumer protection organizations authorized at law to represent their interests.
Acquisitions involve many risks, including the following: • an acquisition may negatively affect our operating results, financial condition or cash flows because it may require us to incur charges or assume substantial debt or other liabilities, may cause adverse tax consequences or unfavorable accounting treatment, may expose us to claims and disputes by third parties, including intellectual property claims and disputes, or may not generate sufficient financial return to offset additional costs and expenses related to the acquisition; • we may encounter difficulties or unforeseen expenditures in integrating the business, technologies, products, personnel or operations of any company that we acquire, particularly if key personnel of the acquired company decide not to work for us, and potentially across different cultures and languages in the event of a foreign acquisition; • an acquisition may disrupt our ongoing business, divert resources, increase our expenses and distract our management; • an acquisition may result in a delay or reduction of sales for both us and the company we acquired due to uncertainty about continuity and effectiveness of products or support from either company; • we may encounter difficulties in, or may be unable to, successfully sell any acquired products; • an acquisition may involve the entry into geographic or business markets in which we have little or no prior experience or where competitors have stronger market positions; • potential strain on our financial and managerial controls and reporting systems and procedures; • potential known and unknown liabilities associated with an acquired company; • if we incur debt to fund such acquisitions, such debt may subject us to material restrictions on our ability to conduct our business as well as financial maintenance covenants; • the risk of impairment charges related to potential write-downs of acquired assets or goodwill in future acquisitions; • to the extent that we issue a significant amount of equity or convertible debt securities in connection with future acquisitions, existing equity holders may be diluted and earnings per share may decrease; and • managing the varying intellectual property protection strategies and other activities of an acquired company.
Acquisitions involve many risks, including the following: • an acquisition may negatively affect our operating results, financial condition or cash flows because it may require us to incur charges or assume substantial debt or other liabilities, may cause adverse tax consequences or unfavorable accounting treatment, may expose us to claims and disputes by third parties, including intellectual property claims and disputes, or may not generate sufficient financial return to offset additional costs and expenses related to the acquisition; • we may encounter difficulties or unforeseen expenditures in integrating the business, technologies, products, personnel or operations of any company that we acquire, particularly if key personnel of the acquired company decide not to work for us, and potentially across different cultures and languages in the event of a foreign acquisition; • an acquisition may disrupt our ongoing business, divert resources, increase our expenses and distract our management; • an acquisition may result in a delay or reduction of sales for both us and the company we acquired due to uncertainty about continuity and effectiveness of products or support from either company; • we may encounter difficulties in, or may be unable to, successfully sell any acquired products; • an acquisition may involve the entry into geographic or business markets in which we have little or no prior experience or where competitors have stronger market positions; 32 Table of Contents • potential strain on our financial and managerial controls and reporting systems and procedures; • potential known and unknown liabilities associated with an acquired company; • if we incur debt to fund such acquisitions, such debt may subject us to material restrictions on our ability to conduct our business as well as financial maintenance covenants; • the risk of impairment charges related to potential write-downs of acquired assets or goodwill in future acquisitions; • to the extent that we issue a significant amount of equity or convertible debt securities in connection with future acquisitions, existing equity holders may be diluted and earnings per share may decrease; and • managing the varying intellectual property protection strategies and other activities of an acquired company.
In addition to the other risk factors discussed in this section, factors that may contribute to the variability of our quarterly and annual results include: • our ability to attract new clients and consumers and retain existing clients and consumers; • our ability to accurately forecast revenue and appropriately plan our expenses; • the effects of changes in search engine placement and prominence; • the effects of increased competition on our business; • our ability to successfully expand in existing markets and successfully enter new markets; • the impact of global, regional or economic conditions; • the ability of licensed cannabis markets to successfully grow and out compete illegal cannabis markets; • our ability to protect our intellectual property; • our ability to maintain and effectively manage an adequate rate of growth; • our ability to maintain and increase traffic to our platform; • costs associated with defending claims, including intellectual property infringement claims and related judgments or settlements; • changes in governmental or other regulation affecting our business; • interruptions in platform availability and any related impact on our business, reputation or brand; • the attraction and retention of qualified personnel; • the effects of natural or man-made catastrophic events; and • the effectiveness of our internal controls, including the material weakness that we have identified.
In addition to the other risk factors discussed in this section, factors that may contribute to the variability of our quarterly and annual results include: • our ability to attract new clients and consumers and retain existing clients and consumers; • our ability to accurately forecast revenue and appropriately plan our expenses; • the effects of changes in search engine placement and prominence; • the effects of increased competition on our business; • our ability to successfully expand in existing markets and successfully enter new markets; • the impact of global, regional or economic conditions; • the ability of licensed cannabis markets to successfully grow and out compete illegal cannabis markets; • our ability to protect our intellectual property; • our ability to maintain and effectively manage an adequate rate of growth; • our ability to maintain and increase traffic to our platform; • costs associated with defending claims, including intellectual property infringement claims and related judgments or settlements; • changes in governmental or other regulation affecting our business; • interruptions in platform availability and any related impact on our business, reputation or brand; • the attraction and retention of qualified personnel; • the effects of natural or man-made catastrophic events; and • the effectiveness of our internal controls, including the material weaknesses that we have identified.
The TRA also provides that, upon certain mergers, asset sales or other forms of business combination, or certain other changes of control, (x) our obligations under the TRA with respect to Class A Units that have been exchanged or redeemed prior to or in connection with such change of control transaction would accelerate and become payable in a lump sum as described above and (y) with respect to Class A Units that have not been exchanged as of such change of control transaction, our or our successor’s obligations under the TRA would be based on certain assumptions, including that we or our successor would have sufficient taxable income to fully utilize the increased tax deductions and tax basis and other benefits covered by 36 Table of Contents the TRA As a result, upon any acceleration of our obligations under the TRA (including upon a change of control), we could be required to make payments under the TRA that are greater than 85% of our actual cash tax savings, which could negatively impact our liquidity.
The TRA also provides that, upon certain mergers, asset sales or other forms of business combination, or certain other changes of control, (x) our obligations under the TRA with respect to Class A Units that have been exchanged or redeemed prior to or in connection with such change of control transaction would accelerate and become payable in a lump sum as described above and (y) with respect to Class A Units that have not been exchanged as of such change of control transaction, our or our successor’s obligations under the TRA would be based on certain assumptions, including that we or our successor would have sufficient taxable income to fully utilize the increased tax deductions and tax basis and other benefits covered by the TRA As a result, upon any acceleration of our obligations under the TRA (including upon a change of control), we could be required to make payments under the TRA that are greater than 85% of our actual cash tax savings, which could negatively 37 Table of Contents impact our liquidity.
See “Accounts Receivable, Net” of Note 2, “Summary of Significant Accounting Policies” to the consolidated financial statements for additional information. If clients and consumers using our platform fail to provide high-quality content that attracts consumers, we may not be able to generate sufficient consumer traffic to remain competitive.
See “Accounts Receivable, Net” of Note 2, “Summary of Significant Accounting Policies” to the audited consolidated financial statements for additional information. If clients and consumers using our platform fail to provide high-quality content that attracts consumers, we may not be able to generate sufficient consumer traffic to remain competitive.
Sales and use, value-added and similar tax laws and rates vary greatly by jurisdiction. If we are deemed an agent for the clients on our platform under state or other applicable tax law, we may be deemed responsible for collecting and remitting sales taxes directly to certain states or jurisdictions.
Sales and use, value-added and similar tax laws and rates vary greatly by jurisdiction. If we are deemed an agent for the clients on our platform under state or other applicable tax law, we may be deemed responsible for collecting and remitting such taxes directly to certain states or jurisdictions.
To the extent that we are limited or prohibited from making some or all of our solutions available through any third-party platform, including the Apple iTunes App Store or the Google Play Store, we may need, or choose, to provide our solutions through alternative venues that may be more difficult for potential users to access.
To the extent that we are limited or prohibited from making some or all of our solutions available through any third-party platform, including the Apple App Store or the Google Play, we may need, or choose, to provide our solutions through alternative venues that may be more difficult for potential users to access.
In addition, as our foreign operations continue to grow, we are subject to a variety of risks inherent in doing business internationally, including: • political, social and economic instability; • risks related to the legal and regulatory environment in foreign jurisdictions, including with respect to privacy and data protection, and unexpected changes in laws, regulatory requirements and enforcement; • fluctuations in currency exchange rates; • higher levels of credit risk and payment fraud; • complying with tax requirements of multiple jurisdictions; • enhanced difficulties of integrating any foreign acquisitions; • the ability to present our content effectively in foreign languages; • complying with a variety of foreign laws, including certain employment laws requiring national collective bargaining agreements that set minimum salaries, benefits, working conditions and termination requirements; • reduced protection for intellectual property rights in some countries; • difficulties in staffing and managing global operations and the increased travel, infrastructure and compliance costs associated with multiple foreign locations; • regulations that might add difficulties in repatriating cash earned outside the United States and otherwise preventing us from freely moving cash; • import and export restrictions and changes in trade regulation; • complying with statutory equity requirements; • complying with the U.S.
In addition, as our foreign operations continue to grow, we are subject to a variety of risks inherent in doing business internationally, including: • political, social and economic instability; • risks related to the legal and regulatory environment in foreign jurisdictions, including with respect to privacy and data protection, and unexpected changes in laws, regulatory requirements and enforcement; • fluctuations in currency exchange rates; • higher levels of credit risk and payment fraud; • complying with tax requirements of multiple jurisdictions; • enhanced difficulties of integrating any foreign acquisitions; • the ability to present our content effectively in foreign languages; • complying with a variety of foreign laws, including certain employment laws requiring national collective bargaining agreements that set minimum salaries, benefits, working conditions and termination requirements; • reduced protection for intellectual property rights in some countries; • difficulties in staffing and managing global operations and the increased travel, infrastructure and compliance costs associated with multiple foreign locations; • regulations that might add difficulties in repatriating cash earned outside the United States and otherwise preventing us from freely moving cash; • import and export restrictions and changes in trade regulation; • complying with statutory equity requirements; 29 Table of Contents • complying with the U.S.
For example, Washington’s My Health My Data Act (“MHMD”) broadly defines consumer health data, places restrictions on processing consumer health data (including imposing stringent requirements for consents), provides consumers certain rights with respect to their health data, and creates a private right of action to allow individuals to sue for violations of the law.
For example, Washington’s My Health My Data Act broadly defines consumer health data, places restrictions on processing consumer health data (including imposing stringent requirements for consents), provides consumers certain rights with respect to their health data, and creates a private right of action to allow individuals to sue for violations of the law.
We sell our Weedmaps for Business offering in the United States and have a limited number of non-monetized listings in several other countries including Austria, Canada, Germany, the Netherlands, Spain and Switzerland. We anticipate growing our business, in part, by continuing to expand our foreign operations.
We sell our Weedmaps for Business offering in the United States and have a limited number of non-monetized listings in several other countries including Austria, Canada, Germany, the Netherlands, Spain, Switzerland, and Uruguay. We anticipate growing our business, in part, by continuing to expand our foreign operations.
Management has been implementing and continues to implement measures to remediate the material weaknesses. However, until the remediation plan is implemented, tested, and deemed effective, we cannot assure that our actions will adequately remediate the material weaknesses or that additional material weaknesses in our internal controls will not be identified in the future.
Management has been implementing and continues to implement measures to remediate the ongoing material weaknesses. However, until the remediation plan is implemented, tested, and deemed effective, we cannot assure that our actions will adequately remediate the material weaknesses or that additional material weaknesses in our internal controls will not be identified in the future.
As applicable, such rights may include the right to access, correct, or delete certain personal data, and to opt-out of certain data processing activities, such as targeted advertising, profiling, and automated decision-making. The exercise of these rights may impact our business and ability to provide our products and services.
As applicable, such rights may include the right to access, correct, or delete certain personal data, and to opt-out of certain data processing activities, such as sale of personal data, targeted advertising, profiling, and automated decision-making. The exercise of these rights may impact our business and ability to provide our products and services.
Our revenue may continue to decline due to a number of factors including, but not limited to, slowdowns in the pace of issuance of new licenses to cannabis retailers and brands, and the decline in the number of new major geographic markets in which the sale of cannabis is permitted and to which we have not already expanded.
Our revenue may decline due to a number of factors including, but not limited to, slowdowns in the pace of issuance of new licenses to cannabis retailers and brands, and the decline in the number of new major geographic markets in which the sale of cannabis is permitted and to which we have not already expanded.
This would harm our ability to attract clients and decrease the frequency with which they subscribe for our advertising placements. We expect to continue to make significant investments to maintain and improve the availability of our platform and to enable rapid releases of new features and products.
This would harm our ability to attract clients and decrease the frequency with which they subscribe for our advertising placements. We have and expect to continue to make significant investments to maintain and improve the availability of our platform and to enable rapid releases of new features and products.
For example, we have at times been unable to offer our WM Orders functionality in our iOS Weedmaps mobile application and are currently unable to offer such functionality in our Android Weedmaps mobile application due to restrictions imposed by the Apple iTunes App Store and Google Play, respectively.
For example, we have at times been unable to offer our WM Orders functionality in our iOS Weedmaps mobile application and are currently unable to offer such functionality in our Android Weedmaps mobile application due to restrictions imposed by the Apple App Store and Google Play, respectively.
In the ordinary course of our business, we may collect, receive, store, generate, use, protect, secure, dispose of, transmit, disclose, or otherwise make accessible (collectively “process”) proprietary, confidential, and sensitive data, including personal data, intellectual property, and trade secrets.
In the ordinary course of our business, we collect, receive, store, generate, use, protect, secure, dispose of, transmit, disclose, or otherwise make accessible (collectively “process”) proprietary, confidential, and sensitive data, including personal data, intellectual property, and trade secrets.
Additionally, the cannabis industry faced price deflation in 2023 and 2022 further pressuring many of our paying clients. This resulted in financial hardship for certain cannabis companies, including some of our paying clients which caused elevated churn and bad debt expense in 2023 and 2022.
Additionally, the cannabis industry faced price deflation in 2024 and 2023 further pressuring many of our paying clients. This resulted in financial hardship for certain cannabis companies, including some of our paying clients which caused elevated churn and bad debt expense in 2023 and 2022.
For example, in April 2019, a lawsuit was filed in the Fresno County Superior Court challenging the California Bureau of Cannabis Control 5 regulation that allowed cannabis businesses to deliver products in local jurisdictions which had prohibited the sale of cannabis.
For example, in April 2019, a lawsuit was filed in the Fresno County Superior Court challenging the California Bureau of Cannabis Control regulation that allowed cannabis businesses to deliver products in local jurisdictions which had prohibited the sale of cannabis.
While our platform is still available in the Apple iTunes App Store and on Google Play for download, there can be no assurance that our platform or all of its functionalities will remain available in the immediate or longer term.
While our platform is still available in the Apple App Store and on Google Play for download, there can be no assurance that our platform or all of its functionalities will remain available in the immediate or longer term.
We may be unable to detect all such websites in a timely manner and even timely technological and legal measures may be insufficient to halt their operations or protect us against the impact of the operation of such websites.
We may be unable to detect all such websites and activity in a timely manner and even timely technological and legal measures may be insufficient to halt their operations or protect us against the impact of the operation of such websites.
These risks and difficulties include: • managing complex, disparate and rapidly evolving regulatory regimes imposed by U.S. federal, state and local and other non-U.S. governments around the world applicable to cannabis and cannabis-related businesses; • adapting to rapidly evolving trends in the cannabis industry and the way consumers and cannabis industry businesses interact with technology; • maintaining and increasing our base of clients and consumers; • continuing to preserve and build our brand while upgrading our existing offerings; • successfully attracting, hiring and retaining qualified personnel to manage operations; • adapting to changes in the cannabis industry if sales of cannabis expand significantly beyond a regulated model; • commodification of the cannabis industry; • successfully implementing and executing our business and marketing strategies; and • successfully expanding our business into new and existing cannabis markets.
These risks and difficulties include: • managing complex, disparate and rapidly evolving regulatory regimes imposed by U.S. federal, state and local and other non-U.S. governments around the world applicable to cannabis and cannabis-related businesses; • adapting to rapidly evolving trends in the cannabis industry and the way consumers and cannabis industry businesses interact with technology; • maintaining and increasing our base of clients and consumers; • continuing to preserve and build our brand while upgrading our existing offerings; • successfully attracting, hiring and retaining qualified personnel to manage operations; • adapting to changes in the cannabis industry if sales of cannabis expand significantly beyond a regulated model; • commodification of the cannabis industry; • competition from the hemp industry; • successfully implementing and executing our business and marketing strategies; and • successfully expanding our business into new and existing cannabis markets.
The market price of our Class A Common Stock and the Public Warrants have been and may continue to be subject to wide fluctuations in response to numerous factors, many of which are beyond our control, including: • actual or anticipated fluctuations in our financial condition and operating results; • changes in projected operational and financial results; • the development, effects and enforcement of and changes to laws and regulations, including with respect to the cannabis industry; • the commencement or conclusion of legal proceedings that involve us; • actual or anticipated changes in our growth rate relative to our competitors; • announcements of new products or services by us or our competitors; • announcements by us or our competitors of significant acquisitions, strategic partnerships, or joint ventures; • capital-raising activities or commitments; • issuance of new or updated research or reports by securities analysts; • the use by investors or analysts of third-party data regarding our business that may not reflect our financial performance; • fluctuations in the valuation of companies perceived by investors to be comparable to us; • sales of our securities, including short selling of our securities; • share price and volume fluctuations attributable to inconsistent trading volume levels of our shares; • general economic and market conditions; and 45 Table of Contents • other events or factors, including those resulting from civil unrest, war, foreign invasions, terrorism, or public health crises, or responses to such events.
The market price of our Class A Common Stock and the Public Warrants have been and may continue to be subject to wide fluctuations in response to numerous factors, many of which are beyond our control, including: • actual or anticipated fluctuations in our financial condition and operating results; • changes in projected operational and financial results; • the development, effects and enforcement of and changes to laws and regulations, including with respect to the cannabis and hemp industries; • the commencement or conclusion of legal proceedings that involve us; • actual or anticipated changes in our growth rate relative to our competitors; 46 Table of Contents • announcements of new products or services by us or our competitors; • announcements by us or our competitors of significant acquisitions, strategic partnerships, or joint ventures; • capital-raising activities or commitments; • issuance of new or updated research or reports by securities analysts; • the use by investors or analysts of third-party data regarding our business that may not reflect our financial performance; • fluctuations in the valuation of companies perceived by investors to be comparable to us; • sales of our securities, including short selling of our securities; • share price and volume fluctuations attributable to inconsistent trading volume levels of our shares; • general economic and market conditions; and • other events or factors, including those resulting from civil unrest, war, foreign invasions, terrorism, or public health crises, or responses to such events.
As a result, some of our clients or their listings currently and in the future may not be in compliance with licensing and related requirements under applicable state or provincial laws and regulations. There could be legal enforcement actions against unlicensed or insufficiently licensed entities selling cannabis or CBD, which could negatively impact us.
As a result, some of our clients or their listings currently and in the future may not be in compliance with licensing and related requirements under applicable state or provincial laws and regulations. There could be legal enforcement actions against unlicensed or insufficiently licensed entities selling cannabis or hemp, which could negatively impact us.
In addition, our platform also may compete with current or potential products and solutions offered by internet search engines and advertising networks, like Google, general two-sided networks like Yelp, various other newspaper, television, media companies, outdoor billboard advertising, and online merchant platforms, such as Shopify, Square and Lightspeed.
In addition, our platform also may compete with current or potential products and solutions offered by internet search engines and advertising networks, like Google, general two-sided networks like Yelp, various other newspaper, television, media companies, outdoor billboard advertising, and online merchant platforms, such as Shopify, Square and Lightspeed, or delivery companies like DoorDash.
For example, the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 ("CAN-SPAM”) and the Telephone Consumer Protection Act of 1991 (“TCPA”) impose specific requirements on communications with customers. For example, the TCPA imposes various consumer consent requirements and other restrictions on certain telemarketing activity and other communications with consumers by phone, fax or text message.
For example, the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 and the Telephone Consumer Protection Act of 1991 (“TCPA”) impose specific requirements on communications with customers. For example, the TCPA imposes various consumer consent requirements and other restrictions on certain telemarketing activity and other communications with consumers by phone, fax or text message.
For additional information about Section 230, see the section captioned “Risk Factors—Risks Related to our Business and Industry.” Our clients are subject to licensing and related requirements under applicable laws and regulations, and our own compliance policies, and some of our clients currently and in the future may not be in compliance with all such requirements.
For additional information about Section 230, see the section titled “Risk Factors—Risks Related to our Business and Industry.” Our clients are subject to licensing and related requirements under applicable laws and regulations, and our own compliance policies, and some of our clients currently and in the future may not be in compliance with all such requirements.
For additional information, see the other risk factors in this section entitled “Risk Factors—Risks Related to our Business and Industry,” including “Some of our clients or their listings currently and in the future may not be in compliance with licensing and related requirements under applicable laws and regulations.
For additional information, see the other risk factors in this section titled “Risk Factors—Risks Related to our Business and Industry,” including “Some of our clients or their listings currently and in the future may not be in compliance with licensing and related requirements under applicable laws and regulations.
We have previously experienced service disruptions, and in the future, we may experience service disruptions, outages or other performance problems due to a variety of factors, including infrastructure changes, human or software errors, capacity constraints and distributed denial of service, or DDoS, fraud or security attacks.
We have previously experienced service disruptions, and in the future, we may experience service disruptions, outages or other performance problems due to a variety of factors, including infrastructure changes, human or software errors, capacity constraints and distributed denial of service, or DDoS, fraud or other security incidents.
We also may engage third-party service providers in the future to provide fraud analysis services and we may integrate with third-party service providers used by our clients to process payments made by consumers if done in a manner compliant with applicable federal and local law.
We also have and may continue to engage third-party service providers in the future to provide fraud analysis services and we may integrate with third-party service providers used by our clients to process payments made by consumers if done in a manner compliant with applicable federal and local law.
Our Certificate of Incorporation requires, to the fullest extent permitted by law, that derivative actions brought in our name, actions against current or former directors, officers or other employees for breach of fiduciary duty, other similar actions, any other action as to which the DGCL confers jurisdiction to the Court of Chancery of the State of Delaware and any action or proceeding concerning the validity of our Certificate of Incorporation or our Bylaws may be brought only in the Court of Chancery in the State of Delaware (or, if and only if the Court of Chancery of the State of Delaware does not have subject matter jurisdiction thereof, any state court located in the State of Delaware or, if and only if all such state courts lack subject matter jurisdiction, the federal district court for the District of Delaware), unless we consent in writing to the selection of an alternative forum.
Our Certificate of Incorporation requires, to the fullest extent permitted by law, that derivative actions brought in our name, actions against current or former directors, officers or other employees for breach of fiduciary duty, other similar actions, any other action as to which the Delaware General Corporation Law (the “DGCL”) confers jurisdiction to the Court of Chancery of the State of Delaware and any action or proceeding concerning the validity of our Certificate of Incorporation or our Bylaws may be brought only in the Court of Chancery in the State of Delaware (or, if and only if the Court of Chancery of the State of Delaware does not have subject matter jurisdiction thereof, any state court located in the State of Delaware or, if and only if all such state courts lack subject matter jurisdiction, the federal district court for the District of Delaware), unless we consent in writing to the selection of an alternative forum.
Under the supervision of and with the participation of our management, we assessed the effectiveness of our internal control over financial reporting as of December 31, 2023, using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control — Integrated Framework (2013).
Under the supervision of and with the participation of our management, we assessed the effectiveness of our internal control over financial reporting as of December 31, 2024, using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control — Integrated Framework (2013).
An otherwise profitable cannabis business may operate at a loss after taking into account its U.S. income tax expenses. This affects us because our sales and operating results could be adversely affected if our clients decrease their marketing budgets and are operating on lower profit margins as a result of unfavorable treatment by the Code.
An otherwise profitable cannabis business may operate at a loss after taking into account its U.S. income tax expenses. This affects us because our sales and operating results could be adversely affected if our 43 Table of Contents clients decrease their marketing budgets and are operating on lower profit margins as a result of unfavorable treatment by the Code.
These expenditures may not result in additional revenue or the growth of our business. If we fail to continue to grow revenue or to achieve profitability, the market price of our securities could decline, and our business, operating results and financial condition could be adversely affected.
These expenditures may not result in additional revenue or the growth of our business. If we fail to continue to grow revenue or to sustain profitability, the market price of our securities could decline, and our business, operating results and financial condition could be adversely affected.
Our domestic and foreign tax liabilities are subject to various jurisdictional rules regarding the timing and allocation of revenue and expenses. Additionally, the amount of income taxes paid is subject to our interpretation of applicable tax laws in the jurisdictions in which we operate and to changes in tax laws.
Our domestic and foreign tax liabilities are subject to various jurisdictional rules regarding the timing and allocation of revenue and expenses. Additionally, the amount of income taxes paid is subject to our interpretation of applicable tax laws in the jurisdictions in which we operate and to changes in tax laws or their interpretation.
As a result of (i) potential differences in the amount of net taxable income allocable to us and the other holders of WMH Units, (ii) the lower tax rate applicable to corporations than individuals and (iii) the use of an assumed tax rate (based on the tax rate applicable to individuals) in calculating WMH LLC’s distribution obligations, we may receive tax distributions significantly in excess of our tax liabilities and obligations to make payments under the TRA.
As a result of (i) potential differences in the amount of net taxable income allocable to us and the other holders of WMH Units, (ii) the lower tax rate 36 Table of Contents applicable to corporations than individuals and (iii) the use of an assumed tax rate (based on the tax rate applicable to individuals) in calculating WMH LLC’s distribution obligations, we may receive tax distributions significantly in excess of our tax liabilities and obligations to make payments under the TRA.
We rely on our clients’ contractual representations, and generally do not verify them, other than with respect to the licensing information of our clients operating cannabis retail businesses, where we currently require such clients to provide evidence of a valid state or provincial cannabis license prior to their initial access and from time to time 17 Table of Contents during the term of their use of such products.
We rely on our clients’ contractual representations, and generally do not verify them, other than with respect to the licensing information of our clients operating cannabis retail businesses, where we currently require such clients to provide evidence of a valid state or provincial cannabis license prior to their initial access and from time to time during the term of their use of such products.
As a result of this error and the resulting restatement of our unaudited condensed consolidated financial statements for the impacted periods, we have incurred, and may 34 Table of Contents continue to incur, unanticipated costs for accounting and legal fees in connection with or related to the restatement, and have become subject to a number of additional risks and uncertainties, including the increased possibility of litigation and regulatory inquiries.
As a result of this error and the resulting restatement of our unaudited condensed consolidated financial statements for the impacted periods, we have incurred, and may continue to incur, unanticipated costs for accounting and legal fees in connection with or related to the restatement, and have become subject to a number of additional risks and uncertainties, including the increased possibility of litigation and regulatory inquiries.
Furthermore, any change in the federal government’s enforcement posture with respect to state licensed cannabis sales, including the enforcement postures of individual federal prosecutors in judicial districts where we operate, would result in our inability to execute our business plan, and we would likely suffer significant losses with respect to client base, which would adversely affect our operations, cash flow and financial condition.
Furthermore, any change in the federal government’s 38 Table of Contents enforcement posture with respect to state licensed cannabis sales, including the enforcement postures of individual federal prosecutors in judicial districts where we operate, would result in our inability to execute our business plan, and we would likely suffer significant losses with respect to client base, which would adversely affect our operations, cash flow and financial condition.
Furthermore, we may discover security issues that were not found during due diligence of such acquired or integrated entities, and it may be difficult to integrate companies into our information technology environment and security program. 26 Table of Contents While we have implemented security measures designed to protect against security incidents, there can be no assurance that these measures will be effective.
Furthermore, we may discover security issues that were not found during due diligence of such acquired or integrated entities, and it may be difficult to integrate companies into our information technology environment and security program. While we have implemented security measures designed to protect against security incidents, there can be no assurance that these measures will be effective.
A majority of our clients are small and medium-sized businesses that operate one or two retail locations, and their access to capital, liquidity and other financial resources is constrained due to the regulatory restrictions applicable to cannabis businesses. As a result, these clients have been and may be further disproportionately affected by economic downturns.
A majority of our clients are small and medium-sized businesses that operate 47 Table of Contents one or two retail locations, and their access to capital, liquidity and other financial resources is constrained due to the regulatory restrictions applicable to cannabis businesses. As a result, these clients have been and may be further disproportionately affected by economic downturns.
We and the third parties upon which we rely are subject to a variety of evolving threats, including but not limited to social-engineering attacks (including through deep fakes, which may be increasingly more difficult to identify as fake, and phishing attacks), malicious code (such as viruses and worms), malware (including as a result of advanced persistent threat intrusions), denial-of-service attacks, credential stuffing attacks, credential harvesting, personnel misconduct or error, ransomware attacks, supply-chain attacks, software bugs, server malfunctions, software or hardware failures, loss of data or other information technology assets, adware, telecommunications failures, earthquakes, fires, floods, attacks enhanced or facilitated by AI, and other similar threats.
We and the third parties with whom we work are subject to a variety of evolving threats, including but not limited to social-engineering attacks (including through deep fakes, which may be increasingly more difficult to identify as fake, and phishing attacks), malicious code (such as viruses and worms), malware (including as a result of advanced persistent threat intrusions), denial-of-service attacks, credential stuffing attacks, credential harvesting, personnel misconduct or error, ransomware attacks, supply-chain attacks, software bugs, server malfunctions, software or hardware failures, loss of data or other information technology assets, adware, telecommunications failures, earthquakes, fires, floods, attacks enhanced or facilitated by AI, and other similar threats.
If our platform is unavailable when consumers attempt to access it or it does not load as quickly as they expect, consumers may seek other solutions and may not return to our platform as often in the future, or at all.
If our platform is wholly or partially unavailable when consumers attempt to access it or it does not load as quickly as they expect, consumers may seek other solutions and may not return to our platform as often in the future, or at all.
For more information, see “—Our business is concentrated in California, and, as a result, our performance may be affected by factors unique to the California market.” Additionally, if such challenges are successful in any other jurisdictions that have legalized or are in the process of legalizing cannabis, our ability to expand our business would be negatively impacted.
For more information, refer to “Risk Factors—Our business is concentrated in California, and, as a result, our performance may be affected by factors unique to the California market.” Additionally, if such challenges are successful in any other jurisdictions that have legalized or are in the process of legalizing cannabis, our ability to expand our business would be negatively impacted.
As discussed above, WMH LLC will generally be required from time to time to make pro rata distributions in cash to us and the other holders of WMH Units at certain assumed tax rates in amounts that are intended to be sufficient to cover the taxes on our 35 Table of Contents and the other WMH equity holders’ respective allocable shares of the taxable income of WMH LLC.
As discussed above, WMH LLC will generally be required from time to time to make pro rata distributions in cash to us and the other holders of WMH Units at certain assumed tax rates in amounts that are intended to be sufficient to cover the taxes on our and the other WMH equity holders’ respective allocable shares of the taxable income of WMH LLC.
While there may be ample public support for legislative action in a particular jurisdiction, numerous factors could impact the legislative process, including lobbying efforts by opposing stakeholders as well as legislators’ disagreements about how to legalize cannabis as well as the interpretation, implementation, and enforcement of applicable laws or regulations.
While there may be ample public support for legislative action in a particular jurisdiction, numerous factors could impact the legislative process, including lobbying efforts by opposing stakeholders as well as legislators’ disagreements about how to legalize cannabis as well as the interpretation, 19 Table of Contents implementation, and enforcement of applicable laws or regulations.
Additionally, proceeds from our clients’ business activities, if found to be in violation of anti-money laundering laws, could subject payments we have received from those clients to seizure or forfeiture, if they are found to be illegal proceeds of a crime committed by a client, which could have a material adverse effect on our business and our investors.
Additionally, proceeds from our clients’ business activities, if found to be in violation of 41 Table of Contents anti-money laundering laws, could subject payments we have received from those clients to seizure or forfeiture, if they are found to be illegal proceeds of a crime committed by a client, which could have a material adverse effect on our business and our investors.
If we are unable to remediate these material weaknesses or to develop and maintain an effective system of internal control over 33 Table of Contents financial reporting, we may not be able to accurately report our financial results in a timely manner, which may adversely affect investor confidence in us and materially and adversely affect our business and operating results.
If we are unable to remediate these material weaknesses or to develop and maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results in a timely manner, which may adversely affect investor confidence in us and materially and adversely affect our business and operating results.
Controls and Procedures.” If we are unable to remediate these material weaknesses or to develop and maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results in a timely manner, which may adversely affect investor confidence in us and materially and adversely affect our business and operating results.
If we are unable to remediate these material weaknesses or to develop and maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results in a timely manner, which may adversely affect investor confidence in us and materially and adversely affect our business and operating results.
Although we do not grow or sell cannabis products, our general connection with the cannabis industry may hamper our efforts to do business or establish collaborative relationships with others that may fear disruption or increased regulatory scrutiny of their own activities. 39 Table of Contents We are dependent on the banking industry to support the financial functions of our products and solutions.
Although we do not grow or sell cannabis products, our general connection with the cannabis industry may hamper our efforts to do business or establish collaborative relationships with others that may fear disruption or increased regulatory scrutiny of their own activities. We are dependent on the banking industry to support the financial functions of our products and solutions.
Most federal and federally-insured state banks currently do not serve businesses that grow and sell cannabis products on the stated ground that growing and selling cannabis is illegal under federal law, even though the Treasury Department’s Financial Crimes Enforcement Network (“FinCEN”), issued guidelines to banks in February 2014 that clarified how financial institutions can provide services to cannabis-related businesses, consistent with financial institutions’ obligations under the Bank Secrecy Act.
Most federal and federally-insured state banks currently do not serve businesses that grow and sell cannabis products on the stated ground that growing and selling cannabis is illegal under federal law, even though the Treasury Department’s Financial Crimes Enforcement Network (“FinCEN”), issued guidelines to banks in February 2014 that 40 Table of Contents clarified how financial institutions can provide services to cannabis-related businesses, consistent with financial institutions’ obligations under the Bank Secrecy Act.
Visits to our website could also decline if our accounts on Facebook, Instagram, X, formerly known as Twitter or LinkedIn are shut down or restricted. We work across these social networks to increase brand awareness of our company by consumers and clients, and to promote client acquisition.
Visits to our website could also decline if our social media accounts, such as those on Facebook, Instagram, X formerly known as Twitter or LinkedIn are shut down or restricted. We work across these social networks to increase brand awareness of our company by consumers and clients, and to promote client acquisition.
In the event that any of our investments, or any proceeds thereof, any dividends or distributions therefrom, or any profits or revenues were found to be in violation of anti-money laundering 40 Table of Contents legislation or otherwise, such transactions may be viewed as proceeds of crime under one or more of statutes of the United States or any other applicable jurisdiction.
In the event that any of our investments, or any proceeds thereof, any dividends or distributions therefrom, or any profits or revenues were found to be in violation of anti-money laundering legislation or otherwise, such transactions may be viewed as proceeds of crime under one or more of statutes of the United States or any other applicable jurisdiction.
Misconduct by these parties could include intentional, reckless or negligent conduct or other activities that violate laws and regulations, including production standards, U.S. federal and state fraud, abuse, data privacy and security laws, other similar non-U.S. laws or laws that require the true, complete and accurate reporting of financial information or data.
Misconduct by these parties could include intentional, reckless or negligent conduct or other activities that violate laws and 48 Table of Contents regulations, including production standards, U.S. federal and state fraud, abuse, data privacy and security laws, other similar non-U.S. laws or laws that require the true, complete and accurate reporting of financial information or data.
Because expenditures on our platform can represent a significant financial investment for our clients, our ability to retain clients depends 15 Table of Contents in part on our ability to create and maintain high levels of client and consumer satisfaction, which we may not always be capable of providing, including for reasons outside of our control.
Because expenditures on our platform can represent a significant financial investment for our clients, our ability to retain clients depends in part on our ability to create and maintain high levels of client and consumer satisfaction, which we may not always be capable of providing, including for reasons outside of our control.
However, 42 Table of Contents Section 280E and related IRS enforcement activity have had a significant impact on the operations of all cannabis companies. While the Section does not directly affect our Company, it lowers our clients’ profitability, and could result in decreased demand for our listing and marketing services.
However, Section 280E and related IRS enforcement activity have had a significant impact on the operations of all cannabis companies. While the Section does not directly affect our Company, it lowers our clients’ profitability, and could result in decreased demand for our listing and marketing services.
Debt financings may contain provisions, which, if breached, may entitle 32 Table of Contents lenders to accelerate repayment of loans, and there is no assurance that we would be able to repay such loans in such an event or prevent the foreclosure of security interests granted pursuant to such debt financing.
Debt financings may contain provisions, which, if breached, may entitle lenders to accelerate repayment of loans, and there is no assurance that we would be able to repay such loans in such an event or prevent the foreclosure of security interests granted pursuant to such debt financing.
The additional reporting and other obligations imposed by these rules and regulations will increase legal and financial compliance costs and the costs of related legal, accounting and administrative activities. These increased costs will require us to divert a significant amount of money that could otherwise be used to expand the business and achieve strategic objectives.
The additional reporting and other obligations imposed by these rules and regulations have increased legal and financial compliance costs and the costs of related legal, accounting and administrative activities. These increased costs require us to divert a significant amount of money that could otherwise be used to expand the business and achieve strategic objectives.
Furthermore, if any issues in complying with those requirements are identified (for example, our recent identification of material weaknesses in our internal controls over 46 Table of Contents financial reporting and any additional material weaknesses or significant deficiency in the internal control over financial reporting that we or our independent registered public accounting firm may identify in the future), we could incur additional costs rectifying those issues, and the existence of those issues could adversely affect our reputation or investor perceptions of it.
Furthermore, if any issues in complying with those requirements are identified (for example, our identification of material weaknesses in our internal controls over financial reporting and any additional material weaknesses or significant deficiency in the internal control over financial reporting that we or our independent registered public accounting firm may identify in the future), we could incur additional costs rectifying those issues, and the existence of those issues could adversely affect our reputation or investor perceptions of it.
Visits to our website could decline significantly if we are listed less prominently or fail to appear in search results for any reason, including ineffective implementation of our digital marketing strategies or any change by a search engine to its ranking algorithms or advertising policies.
Visits to our website could decline significantly if we are listed 22 Table of Contents less prominently or fail to appear in search results for any reason, including ineffective implementation of our digital marketing strategies or any change by a search engine to its ranking algorithms or advertising policies.
As a public company, we are subject to the requirements of the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, and the rules and regulations promulgated and to be promulgated thereunder, Public Company Accounting Oversight Board (the “PCAOB”), as well as rules adopted, and to be adopted, by the SEC and the Nasdaq Stock Market (“Nasdaq”).
As a public company, we are subject to the requirements of the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, and the rules and regulations promulgated and to be promulgated thereunder, Public Company Accounting Oversight Board (the “PCAOB”), as well as rules adopted, and to be adopted, by the SEC and Nasdaq.
In particular, the European Economic Area (“EEA”) and the UK have significantly restricted the transfer of personal data to the United States and other countries whose privacy laws it generally believes are inadequate. Other jurisdictions may adopt similarly stringent interpretations of their data localization and cross-border data transfer laws.
In particular, the European Economic Area (“EEA”) and the UK have significantly restricted the transfer of personal data to the United States and other countries whose privacy laws it generally believes are inadequate. Other jurisdictions have and may continue to adopt similarly stringent data localization and cross-border data transfer laws.
On October 9, 2018, CBP released an additional policy statement indicating that Canadian citizens working in or facilitating the proliferation of the legal cannabis industry in Canada, if travelling to the United States for reasons unrelated to the cannabis industry, will generally be admissible.
On October 9, 2018, CBP released an additional policy statement indicating that Canadian citizens working in or facilitating the proliferation of the legal cannabis industry in Canada, if travelling to the United 44 Table of Contents States for reasons unrelated to the cannabis industry, will generally be admissible.
If our clients do not believe the incremental additional cost we are charging for Weedmaps for Business is justified by the additional components included in our software bundles or that our add-on offerings do not generate proper return on investment, such clients may decline to continue using our services, and our revenue and other financial results may be adversely impacted.
If our clients do not believe the incremental additional cost we are charging for Weedmaps for Business is justified by the additional components 15 Table of Contents included in our software bundles or that our add-on offerings do not generate proper return on investment, such clients may decline to continue using our services, and our revenue and other financial results may be adversely impacted.
Further, 27 Table of Contents these conditions may impact our ability to access financial markets to obtain the necessary funding to expand our business, which may adversely affect our liquidity and working capital. It is not currently possible to ascertain the overall impact of such an event on our business.
Further, these conditions may impact our ability to access financial markets to obtain the necessary funding to expand our business, which may adversely affect our liquidity and working capital. It is not currently possible to ascertain the overall impact of such an event on our business.
Consequently, certain of our retailers currently 37 Table of Contents (and may in the future) sell adult-use cannabis, if permitted by such state and local laws now or in the future, and therefore may be outside any protections extended to medical-use cannabis under the spending bill provision.
Consequently, certain of our retailers currently (and may in the future) sell adult-use cannabis, if permitted by such state and local laws now or in the future, and therefore may be outside any protections extended to medical-use cannabis under the spending bill provision.
In 2022, President Biden signed into law the “Medical Marijuana and Cannabidiol Research Expansion Act,” a bill aimed at easing restrictions on cannabis research -- bipartisan legislation which is the first standalone cannabis reform bill to pass both the House and Senate.
In the prior administration, President Biden signed into law the “Medical Marijuana and Cannabidiol Research Expansion Act,” a bill aimed at easing restrictions on cannabis research -- bipartisan legislation which is the first standalone cannabis reform bill to pass both the House and Senate.
Export controls and trade sanctions laws and regulations may restrict or 28 Table of Contents prohibit altogether the provision, sale, or supply of our products to certain governments, persons, entities, countries, and territories, including those that are the target of comprehensive sanctions or an embargo.
Export controls and trade sanctions laws and regulations may restrict or prohibit altogether the provision, sale, or supply of our products to certain governments, persons, entities, countries, and territories, including those that are the target of comprehensive sanctions or an embargo.
If our clients struggle financially or do not remain viable, it can negatively impact our ability to generate new revenue, maintain existing revenue or collect on outstanding receivables. We have customers with past due balances and our failure to collect a significant portion of such balances could adversely affect our cash and provision for doubtful accounts.
If our clients struggle financially or do not remain viable, it can negatively impact our ability to generate new revenue, maintain existing revenue or collect on outstanding receivables. We have customers with past due balances and our failure to collect a significant portion of such balances could adversely affect our cash and provision for credit losses.
If our clients are 41 Table of Contents unable to comply with any new rules, regulations or registration as prescribed by the FDA, or are unable to do so in a cost-effective manner, our clients may be unable to continue to operate their respective business in its current form, or at all, which may also result in our clients being unable to continue engaging our technology services.
If our clients are unable to comply with any new rules, regulations or registration as prescribed by the FDA, or are unable to do so in a cost-effective manner, our clients may be unable to continue to operate their respective business in its current form, or at all, which may also result in our clients being unable to continue engaging our technology services.
Attorney General initiated proceedings to transfer cannabis from Schedule I to Schedule III, through an NPRM published on May 21, 2024. This decision is expected to have far reaching implications that are not yet fully understood.
Attorney General initiated proceedings to transfer cannabis from Schedule I to Schedule III, through an NPRM published on May 21, 2024. If cannabis is ultimately rescheduled to schedule III, this decision is expected to have far reaching implications that are not yet fully understood.
We expect to continue making significant investments in the functionality, performance, reliability, design, security and scalability of our platform. We may experience difficulties with the development of our platform that could delay or prevent the implementation of new solutions and enhancements.
We have and expect to continue making significant investments in the functionality, performance, reliability, design, security and scalability of our platform. We have in the past and may in the future experience difficulties with the development of our platform that could delay or prevent the implementation of new solutions and enhancements.
Furthermore, our stockholders may be subject to increased costs to bring these claims, and the exclusive forum provision could have the effect of discouraging claims or limiting investors’ ability to bring claims in a judicial forum that they find favorable.
Furthermore, our stockholders may be subject to increased costs to 45 Table of Contents bring these claims, and the exclusive forum provision could have the effect of discouraging claims or limiting investors’ ability to bring claims in a judicial forum that they find favorable.
In addition, to the extent 25 Table of Contents that such activity creates confusion among clients or consumers, decreases the likelihood that consumers use our platform to access information, or reduces the distinctiveness of our products in the marketplace, our brand and business could be harmed.
In addition, to the extent that such activity creates confusion among clients or consumers, decreases the likelihood that consumers use our platform to access information, or reduces the distinctiveness of our products in the marketplace, our brand and business could be harmed.
The government of Canada has started warning travelers on its website that previous use of cannabis, or any substance prohibited by U.S. federal laws, could mean denial of entry to the United States. Business or financial involvement in the legal cannabis industry in Canada or in the United States could also be grounds for U.S. border guards to deny entry.
The government of Canada warns travelers on its website that previous use of cannabis, or any substance prohibited by U.S. federal laws, could mean denial of entry to the United States. Business or financial involvement in the legal cannabis industry in Canada or in the United States could also be grounds for U.S. border guards to deny entry.
TCPA violations can result in significant financial penalties, including penalties or criminal fines imposed by 29 Table of Contents the Federal Communications Commission or fines of up to $1,500 per violation imposed through private litigation or by state authorities.
TCPA violations can result in significant financial penalties, including penalties or criminal fines imposed by the Federal Communications Commission or fines of up to $1,500 per violation imposed through private litigation or by state authorities.
We may incur significant costs in an effort to detect and prevent security incidents. Numerous state, federal and foreign laws and regulations require companies to notify individuals, regulatory authorities, or other stakeholders of certain security involving incidents, including those that involve certain types of personal data.
We have in the past and may in the future incur significant costs in an effort to detect and prevent security incidents. Numerous state, federal and foreign laws and regulations require companies to notify individuals, regulatory authorities, or other stakeholders of certain security involving incidents, including those that involve certain types of personal data.
Additionally, in some jurisdictions we may be required to seek and obtain a blanket approval of our platform in order to enable potential clients to access our services, and such approval may be subject 18 Table of Contents to significant regulatory discretion.
Additionally, in some jurisdictions we may be required to seek and obtain a blanket approval of our platform in order to enable potential clients to access our services, and such approval may be subject to significant regulatory discretion.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

8 edited+2 added−7 removed2 unchanged
Biggest changeDepending on the environment, we implement and maintain various technical, physical, and organizational measures, processes, standards and policies designed to manage and mitigate material risks from cybersecurity threats to our Information Systems and Data, including, for example: incident detection and response plans; vulnerability management plan; disaster recovery and business continuity plans; segregating and encrypting certain of our data; maintaining network security and access controls; asset management, tracking, and disposal; monitoring certain of our systems and network; penetration testing and tabletop exercises; cybersecurity insurance; having dedicated cybersecurity staff; and training our employees about certain cybersecurity risks and threats.
Biggest changeDepending on the environment, we implement and maintain various technical, physical, and organizational measures, processes, standards and policies designed to manage and mitigate material risks from cybersecurity threats to our systems and data. We use third-party service providers to assist us from time to time with the identification, assessment, and management of material cybersecurity risks.
Our cybersecurity risk assessment and management processes are implemented and maintained by certain members of management, including our Chief Technology Officer (CTO) and our Senior Director, Information Security. Our CTO has over 15 years of experience in engineering and development, including in leadership roles.
Our cybersecurity risk assessment and management processes are implemented and maintained by certain members of our security team, led by our CTO. Our CTO has over 14 years of experience in engineering and development, including leadership roles. Other members of our security team collectively have over 50 years of experience in information security.
We have a vendor management program designed to manage cybersecurity risks associated with our use of these providers, which may involve different levels of assessment designed to help identify cybersecurity risks associated with a provider depending on the nature of the services provided, the sensitivity of the Information Systems and Data at issue, and the identity of the provider.
We have a vendor management program designed to manage cybersecurity risks associated with our use of these providers, as well as other third-party suppliers and business partners, which may involve different levels of assessment designed to help identify cybersecurity risks associated with a provider.
The program includes contractually obligating certain third-party service providers with access to Information Systems and Data to implement and maintain cybersecurity practices consistent with applicable legal requirements. For a description of the risks from cybersecurity threats that may materially affect us and how they may do so, see our risk factors under Part 1. Item 1A.
For a description of the risks from cybersecurity threats that may materially affect us and how they may do so, see our risk factors under Part 1. Item 1A.
Our CTO, General Counsel and CEO work with our incident response team to help us mitigate and remediate cybersecurity incidents of which they are notified. In addition, our incident response and vulnerability management plans include reporting to the Audit Committee (who may consult with our technology committee) for certain cybersecurity incidents.
Our cybersecurity incident response and vulnerability management plans are designed to escalate certain cybersecurity incidents to members of leadership depending on the circumstances. In these situations, members of our leadership team work with our incident response team to help us evaluate, mitigate and remediate cybersecurity incidents of which they are notified.
For example, (1) cybersecurity risk is addressed as a component of our enterprise risk management program and identified in our risk register; (2) the security team works with certain members of our senior management to prioritize our risk management processes and mitigate cybersecurity threats that are more likely to lead to a material impact to our business; (3) our senior management evaluates material risks from cybersecurity threats against our overall business objectives and provides periodic reports to the technology and audit committees of our board of directors, which evaluate our overall enterprise risk.
Our assessment and management of material risks from cybersecurity threats are integrated into our overall risk management processes. Our CTO and our senior management evaluates material risks from cybersecurity threats against our overall business objectives and provide periodic reports to the technology and audit committees of our board of directors, which evaluate our overall enterprise risk.
Our security team, managed by our Chief Technology Officer (“CTO”) and Senior Director, Information Security, helps identify, assess and manage our cybersecurity threats and risks, including through the use of our cybersecurity risk acceptance register.
ITEM 1C. CYBERSECURITY Risk management and strategy Our security team, managed by our Chief Technology Officer (“CTO”) who works with a team of security professionals to help identify, assess and manage our cybersecurity threats and risks.
Our technology committee receives periodic reports from the CTO concerning our significant cybersecurity threats and risk and the processes we have implemented to address them. Our board of directors, our Audit Committee and our technology committees also have access to certain reports or presentations related to cybersecurity threats, risk and mitigation.
In addition, our incident response and vulnerability management plans include reporting to the Audit Committee (who may consult with our technology committee) for certain cybersecurity incidents. Our technology committee receives periodic reports from our security team concerning our significant cybersecurity threats and risk and the processes we have implemented to address them.
Removed
CYBERSECURITY Risk management and strategy We have implemented and maintain various information security processes designed to identify, assess and manage material risks from cybersecurity threats to our critical computer networks, third party hosted services, communications systems, hardware and software, and our critical data, including intellectual property, confidential information that is proprietary, 47 Table of Contents strategic or competitive in nature, or otherwise material to our business, including customer and client Personally Identifiable Information (“Information Systems and Data”).
Added
Risk Factors in this Annual Report on Form 10-K, including If our information technology 49 Table of Contents systems or those third parties with whom we work, or our data, are or were compromised, we could experience adverse consequences resulting from such compromise, including but not limited to regulatory investigations or actions; litigation; fines and penalties; disruptions of our business operations; reputational harm; loss of revenue or profits; loss of customers or sales; and other adverse consequences .
Removed
Our assessment and management of material risks from cybersecurity threats are integrated into our overall risk management processes.
Added
Management is responsible for identifying, assessing, and managing material cybersecurity risks on an ongoing basis, establishing processes to ensure that such potential cybersecurity risk exposures are monitored, putting in place appropriate mitigation measures, maintaining cybersecurity policies and procedures, and providing regular reports to our board of directors.
Removed
We use third-party service providers to assist us from time to time to identify, assess, and manage material risks from cybersecurity threats, including for example penetration testing firms, threat intelligence service providers, cybersecurity software providers, and professional services firms, including legal counsel.
Removed
We use third-party service providers to perform a variety of functions throughout our business, such as cloud data hosting services.
Removed
Risk Factors in this Annual Report on Form 10-K, including (i) Real or perceived errors, failures, or bugs in our platform could adversely affect our operating results and growth prospects, (ii) Any security incident, including a distributed denial of service attack, ransomware attack, security breach or unauthorized data access could impair or incapacitate our information technology systems and delay or interrupt service to our clients and consumers, harm our reputation, or subject us to significant liability, and (iii) We are subject to industry standards, governmental laws, regulations and other legal obligations, particularly related to privacy, data protection and information security, and any actual or perceived failure to comply with such obligations could harm our business.
Removed
Our Senior Director, Information Security has over 20 years of experience in information security, including similar roles leading Information Security teams at Ticketmaster, Sony Pictures, and Warner Bros. Our CTO is responsible for hiring appropriate personnel, helping to integrate cybersecurity risk considerations into our overall risk management strategy, communicating key priorities to relevant personnel, and approving budgets.
Removed
Our Senior Director, Information Security manages preparing for cybersecurity incidents, approving cybersecurity processes, and reviewing security assessments and other security-related reports. 48 Table of Contents Our cybersecurity incident response and vulnerability management plans are designed to escalate certain cybersecurity incidents to members of management depending on the circumstances, including our CTO, General Counsel and CEO.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. PROPERTIES We currently maintain our executive offices at 41 Discovery, Irvine, California 92618, pursuant to an operating lease that expires in 2025. We have a second headquarter space in Los Angeles, California, pursuant to an operating lease that expires in 2031. We also lease additional offices in Denver, Colorado.
Biggest changeITEM 2. PROPERTIES We currently maintain our executive offices and headquarters at 41 Discovery, Irvine, California 92618, pursuant to an operating lease that expires in 2030. We also have office spaces in Los Angeles, California, Denver, Colorado and Austin, Texas. We consider our current office space adequate to meet our ongoing needs.
We consider our current office space adequate to meet our ongoing needs. However, from time to time we may evaluate additional or substitute office spaces. We believe that we will be able to obtain additional facilities, as needed, on commercially reasonable terms.
However, from time to time we may evaluate additional or substitute office spaces. We believe that we will be able to obtain additional facilities, as needed, on commercially reasonable terms.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 3. LEGAL PROCEEDINGS The information set forth under "Commitment and Contingencies—Litigation" in Note 5 to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K is incorporated by reference into this Item 3.
Biggest changeITEM 3. LEGAL PROCEEDINGS The information set forth under "Commitment and Contingencies—Litigation" in Note 6 to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K is incorporated by reference into this Item 3. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 50 Table of Contents PART II
Removed
As previously disclosed, in the second quarter of 2022, our board of directors received an internal complaint regarding the calculation, definition and reporting of our monthly active users (“MAUs”) metric. In response, the board of directors formed a special committee (the “Special Committee”) of independent directors to conduct an internal investigation with the assistance of outside counsel.
Removed
As a result of the findings of that internal investigation, we provided certain additional information regarding the growth and nature of our previously-reported MAUs in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2022 filed with the SEC on August 9, 2022.
Removed
This investigation found no impact on our financial results under accounting principles generally accepted in the United States of America (“GAAP”) or the reporting or disclosure of any currently disclosed non-GAAP financial metric. As also previously reported, in the third quarter of 2022, we determined not to report MAUs going forward.
Removed
In August 2022, our board of directors determined to voluntarily report the internal complaint and subsequent internal investigation to the SEC. Since that date, we have received two subpoenas from the SEC’s Division of Enforcement requesting additional information and documents.
Removed
In addition, the SEC issued subpoenas to several of our current and former employees seeking their testimony, and their testimony occurred in July and August of 2023. We have been fully cooperating with the SEC’s investigation.
Removed
Such investigations are inherently uncertain and their results cannot be predicted with certainty, but could result in penalties or other sanctions against us, as well as negative publicity and reputational harm. Regardless of the outcome, such proceedings can have an adverse impact on us because of legal costs, diversion of management resources and other factors.
Removed
Additionally, from time to time, we are involved in legal proceedings and subject to claims that arise in the ordinary course of business.
Removed
Although the results of legal proceedings and claims cannot be predicted with certainty, to our knowledge we are not currently party to any legal proceedings which, if determined adversely to us, would individually or taken together have a material adverse effect on our business, operating results, cash flows or financial condition.
Removed
We also pursue litigation to protect our legal rights and additional litigation may be necessary in the future to enforce our intellectual property and our contractual rights, to protect our confidential information or to determine the validity and scope of the proprietary rights of others. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 49 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeRecent Sales of Unregistered Securities; Use of Proceeds from Registered Offerings There have been no recent sales of unregistered securities for the fiscal year ended December 31, 2023 that would be required to be disclosed pursuant to Item 701 of Regulation S-K.
Biggest changeRecent Sales of Unregistered Securities; Use of Proceeds from Registered Offerings There have been no recent sales of unregistered securities for the years ended December 31, 2024 and December 31, 2023 that would be required to be disclosed pursuant to Item 701 of Regulation S-K. Purchases of Equity Securities by the Issuer and Affiliated Purchasers None. ITEM 6. Reserved
Holders of Record As of May 13, 2024, there were 115 holders of record of our Class A Common Stock, 12 holders of record of our Class V Common Stock and 2 holders of record of our Public Warrants.
Holders of Record As of March 5, 2025, there were 106 holders of record of our Class A Common Stock, 12 holders of record of our Class V Common Stock and 2 holders of record of our Public Warrants.
As of May 13, 2024, there were 95,051,735 shares of Class A Common Stock issued and outstanding and 55,486,361 shares of our Class V common stock (the “Class V Common Stock”) issued and outstanding. No market exists for the Class V Common Stock.
As of March 5, 2025, there were 105,028,513 shares of Class A Common Stock issued and outstanding and 49,319,542 shares of our Class V common stock (the “Class V Common Stock”) issued and outstanding. No market exists for the Class V Common Stock.
Removed
All unregistered sales of our securities for the fiscal years ended December 31, 2022 and 2021 were previously disclosed in our Annual Report on Form 10-K, which was filed with the SEC on March 16, 2023. Purchases of Equity Securities by the Issuer and Affiliated Purchasers None. ITEM 6. [Reserved]

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

110 edited+31 added−16 removed72 unchanged
Biggest changeYears Ended December 31, 2023 2022 Amount % Revenue Amount % Revenue (in thousands, except percentages) Net revenues $ 187,993 100.0 % $ 215,531 100.0 % Costs and expenses: Cost of revenues (exclusive of depreciation and amortization) 12,527 6.7 % 15,407 7.1 % Sales and marketing 47,073 25.0 % 82,624 38.3 % Product development 36,001 19.2 % 50,520 23.4 % General and administrative 74,313 39.5 % 120,787 56.0 % Depreciation and amortization 12,133 6.5 % 11,498 5.3 % Asset impairment charges 24,403 13.0 % 4,317 2.0 % Total costs and expenses 206,450 109.8 % 285,153 132.3 % Operating loss (18,457) (9.8) % (69,622) (32.3) % Other income (expense), net: Change in fair value of warrant liability 1,505 0.8 % 25,370 11.8 % Change in tax receivable agreement liability (1,256) (0.7) % 142,352 66.0 % Other income (expense) 2,574 1.4 % (1,674) (0.8) % Income (loss) before income taxes (15,634) (8.3) % 96,426 44.7 % Provision for (benefit from) income taxes 93 — % 179,077 83.1 % Net loss (15,727) (8.4) % (82,651) (38.3) % Net (loss) income attributable to noncontrolling interests (5,829) (3.1) % 33,338 15.5 % Net loss attributable to WM Technology, Inc. $ (9,898) (5.3) % $ (115,989) (53.8) % Comparison of Years Ended December 31, 2023 and 2022 Net Revenues The following table summarizes our disaggregated net revenue information: Years Ended December 31, Change 2023 2022 ($) (%) (dollars in thousands) Net Revenues $ 187,993 $ 215,531 $ (27,538) (13) % Net revenues decreased by $27.5 million, or 13%, for the year ended December 31, 2023 compared to the same period in 2022.
Biggest changeYears Ended December 31, 2024 2023 Amount % Revenue Amount % Revenue (in thousands, except percentages) Revenues $ 184,514 100.0 % $ 187,993 100.0 % Costs and expenses: Cost of revenues (exclusive of depreciation and amortization shown separately below) 9,019 4.9 % 12,527 6.7 % Sales and marketing 40,424 21.9 % 47,073 25.0 % Product development 36,426 19.7 % 36,001 19.2 % General and administrative 70,619 38.3 % 74,313 39.5 % Depreciation and amortization 13,278 7.2 % 12,133 6.5 % Asset impairment charges — — % 24,403 13.0 % Total costs and expenses 169,766 92.0 % 206,450 109.8 % Operating income (loss) 14,748 8.0 % (18,457) (9.8) % Other income (expenses), net Change in fair value of warrant liability — — % 1,505 0.8 % Change in tax receivable agreement liability (2,773) (1.5) % (1,256) (0.7) % Other income 258 0.1 % 2,574 1.4 % Income (loss) before income taxes 12,233 6.6 % (15,634) (8.3) % Provision for income taxes 46 — % 93 — % Net income (loss) 12,187 6.6 % (15,727) (8.4) % Net income (loss) attributable to noncontrolling interests 4,548 2.5 % (5,829) (3.1) % Net income (loss) attributable to WM Technology, Inc. $ 7,639 4.1 % $ (9,898) (5.3) % Comparison of Years Ended December 31, 2024 and 2023 Revenues The following table summarizes our disaggregated revenue information: Years Ended December 31, Change 2024 2023 ($) (%) (dollars in thousands) Revenues $ 184,514 $ 187,993 $ (3,479) (2) % Revenues decreased by $3.5 million, or 2%, for the year ended December 31, 2024 compared to the same period in 2023.
Our Weedmaps for Business subscriptions generally have one-month terms that autom atically renew unless notice of cancellation is provided in advance. Featured and deal listings and other WM Ad solutions are offered as add-on products to the Weedmaps for Business subscriptions. Featured and deal listings provide customers with premium placement ad solutions and discount and promotion pricing tools.
Our Weedmaps for Business subscriptions generally have one-month terms that autom atically renew unless notice of cancellation is provided in advance. Featured and deal listings and other ad solutions are offered as add-on products to the Weedmaps for Business subscriptions. Featured and deal listings provide customers with premium placement ad solutions and discount and promotion pricing tools.
Revenues for these arrangements are recognized over-time, generally during a month-to-month subscription period as the products are provided. We rarely need to allocate the transaction price to separate performance obligations. In the rare case that allocation of the transaction price is needed, We recognize revenue in proportion to the standalone selling prices of the underlying services at contract inception.
Revenues for these arrangements are recognized over-time, generally during a month-to-month subscription period as the services are provided. We rarely need to allocate the transaction price to separate performance obligations. In the rare case that allocation of the transaction price is needed, We recognize revenue in proportion to the standalone selling prices of the underlying services at contract inception.
As regulated markets mature and as we incur expenses to attract paying clients and convert non-paying clients to paying clients, we may generate losses in new markets for an extended period. Furthermore, we compete with cannabis-focused and general two-sided marketplaces, internet search engines and various other newspaper, television and media companies and other software providers.
As regulated markets mature and as we incur expenses to attract paying clients and convert non-paying clients to paying clients, we may generate losses in new markets for an extended period. Furthermore, we compete with cannabis-focused and general two-sided marketplaces, internet search engines, delivery companies and various other newspaper, television and media companies and other software providers.
As operating expenses and capital expenditures fluctuate over time, we may accordingly experience short-term, negative impacts to our operating results and cash flows. Components of Our Results of Operations Revenues Our revenues are derived primarily from monthly subscriptions to Weedmaps for Bu siness, featured and deal listings and other WM Ad solutions.
As operating expenses and capital expenditures fluctuate over time, we may accordingly experience short-term, negative impacts to our operating results and cash flows. Components of Our Results of Operations Revenues Our revenues are derived primarily from monthly subscriptions to Weedmaps for Bu siness, featured and deal listings, other ad solutions and WM Dispatch.
Provision for (Benefit from) Income Taxes We account for income taxes pursuant to the asset and liability method which requires the recognition of deferred income tax assets and liabilities related to the expected future tax consequences arising from temporary differences between the carrying amounts and tax bases of assets and liabilities based on enacted statutory tax rates applicable to the periods in which the temporary differences are expected to reverse.
Provision for Income Taxes We account for income taxes pursuant to the asset and liability method which requires the recognition of deferred income tax assets and liabilities related to the expected future tax consequences arising from temporary differences between the carrying amounts and tax bases of assets and liabilities based on enacted statutory tax rates applicable to the periods in which the temporary differences are expected to reverse.
Other WM Ad solutions include banner ads and promotion tiles on our marketplace ad as well as other advertising products on and off the Weedmaps marketplace. We have a fixed inventory of featured listing and display advertising in each market, and price is generally determined through a competitive auction process that reflects local market demand.
Other ad solutions include banner ads and promotion tiles on our marketplace ad as well as other advertising products on and off the Weedmaps marketplace. We have a fixed inventory of featured listing and display advertising in each market, and price is generally determined through a competitive auction process that reflects local market demand.
The net cash outflows from changes in operating assets and liabilities were primarily due to a decrease in accounts payable and accrued expenses of $15.3 million, a decrease in operating lease liabilities of $6.3 million and a decrease in deferred revenue of $0.3 million, partially offset by a decrease in accounts receivable of $4.5 million and a decrease in prepaid expenses and other assets of $3.3 million.
Net cash outflows from changes in operating assets and liabilities were primarily due to a decrease in accounts payable and accrued expenses of $15.3 million, a decrease in operating lease liabilities of $6.3 million and a decrease in deferred revenue of $0.3 million, partially offset by a decrease in accounts receivable of $4.5 million and a decrease in prepaid expenses and other assets of $3.3 million.
Risk Factors.” In addition to historical financial information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results and timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those discussed under “Item 1A. Risk Factors” and elsewhere herein.
Risk Factors.” In addition to historical financial information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties, and assumptions. Our actual results and timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those discussed under “Item 1A. Risk Factors” and included herein.
To provide investors with additional information regarding our financial results, we have disclosed EBITDA and Adjusted EBITDA, both of which are non-GAAP financial measures that we calculate as net income (loss) before interest, taxes and depreciation and amortization expense in the case of EBITDA and further adjusted to exclude stock-based compensation, change in fair value of warrant liability, transaction related bonus, legal settlements and other legal costs, discharge of holdback obligation related to prior acquisition, reduction in force, asset impairment charges, transaction costs, change in TRA liability and other non-cash, unusual and/or infrequent costs in the case of Adjusted EBITDA.
To provide investors with additional information regarding our financial results, we have disclosed EBITDA and Adjusted EBITDA, both of which are non-GAAP financial measures that we calculate as net income (loss) before interest, taxes and 53 Table of Contents depreciation and amortization expense in the case of EBITDA and further adjusted to exclude stock-based compensation, change in fair value of warrant liability, transaction related bonus, legal settlements and other legal costs, discharge of holdback obligation related to prior acquisition, reduction in force, asset impairment charges, change in TRA liability and other non-cash, unusual and/or infrequent costs in the case of Adjusted EBITDA.
Our comprehensive business-to-consumer and business-to-business suite of products afford cannabis retailers and brands of all sizes integrated tools to compliantly run their businesses and to reach, convert, and retain consumers. Our business primarily consists of our commerce-driven marketplace (“Weedmaps”), and our fully integrated suite of end-to-end Software-as-a-Service (“SaaS”) solutions software offering (“Weedmaps for Business”).
Our comprehensive business-to-consumer and business-to-business suite of products afford cannabis retailers and brands of all sizes integrated tools to compliantly run their businesses and to reach, convert, and retain consumers. Our business primarily consists of our commerce-driven marketplace (“Weedmaps”), and our fully integrate d suite of end-to-end Software-as-a-Service (“SaaS”) solutions software offering (“Weedmaps for Business”).
Because of these limitations, you should consider EBITDA and Adjusted EBITDA alongside other financial performance measures, including net loss and our other GAAP results.
Because of these limitations, you should consider EBITDA and Adjusted EBITDA alongside other financial performance measures, including net income (loss) and our other GAAP results.
We operate in the United States, Canada and other foreign jurisdictions where medical and/or adult cannabis use is legal under state or national law. As of December 31, 2023, we actively operated in over 35 U.S. states and territories that have adult-use and/or medical-use regulations in place.
We operate in the United States, Canada and other foreign jurisdictions where medical and/or adult cannabis use is legal under state or national law. As of December 31, 2024, we actively operated in over 35 U.S. states and territories that have adult-use and/or medical-use regulations in place.
Payments under the TRA are not conditioned on the Class A Unit holders’ continued ownership of us. See Note 16, “Income Taxes,” to our consolidated financial statements included herein. Critical Accounting Policies and Estimates Our consolidated financial statements are prepared in accordance with GAAP.
Payments under the TRA are not conditioned on the Class A Unit holders’ continued ownership of us. See Note 15, “Income Taxes,” to our consolidated financial statements included herein. Critical Accounting Policies and Estimates Our consolidated financial statements are prepared in accordance with GAAP.
In December 31, 2023, we completed the sunset of WM AdSuite, WM CRM and WM Screens product offerings as we continue to focus our efforts on other Weedmaps for Business products that support the Weedmaps marketplace and improve the eCommerce experience for our clients and users.
In December 31, 2024, we completed the sunset of WM AdSuite, WM CRM and WM Screens product offerings as we continue to focus our efforts on other Weedmaps for Business products that support the Weedmaps marketplace and improve the eCommerce experience for our clients and users.
Some of these limitations are as follows: 58 Table of Contents • although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements; • EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs; and • EBITDA and Adjusted EBITDA do not reflect tax payments that may represent a reduction in cash available to us.
Some of these limitations are as follows: • although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements; • EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs; and • EBITDA and Adjusted EBITDA do not reflect tax payments that may represent a reduction in cash available to us.
Currently , thirty-nine states, the District of Columbia, Puerto Rico, the Virgin Islands, Guam and the Northern Mariana have legalized some form of cannabis use for certain medical purpose s. Twenty-four of those states, the District of Columbia, Guam and Northern Mariana have legalized cannabis for adults for non-medical purposes as well (sometimes referred to as adult or recreational use).
Currently , forty states, the District of Columbia, Puerto Rico, the Virgin Islands, Guam and the Northern Mariana have legalized some form of cannabis use for certain medical purpose s. Twenty-four of those states, the District of Columbia, Guam and Northern Mariana have legalized cannabis for adults for non-medical purposes as well (sometimes referred to as adult or recreational use).
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of the financial condition and results of operations of WM Technology, Inc. should be read in conjunction with our consolidated financial statements and related notes included in this Form 10-K, as well as the discussion under “Item 1A.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of the financial condition and results of operations of WM Technology, Inc. should be read in conjunction with our consolidated financial statements and related notes included in this Annual Report on Form 10-K, as well as the discussion under “Item 1A.
We recorded an impairment charge of $6.1 million for the year ended December 31, 2023 related to 63 Table of Contents intangible assets associated with certain product offerings that were sunset in December 2023, which is included in asset impairment charges in the consolidated statements of operations.
We recorded an impairment charge of $6.1 million for the year ended December 31, 2023 related to intangible assets associated with certain product offerings that were sunset in December 2023, which is included in asset impairment charges in the consolidated statements of operations.
For those trade receivables that do not share similar risk characteristics, the allowance for expected credit losses is calculated on an individual basis. Risk characteristics relevant to our accounts receivable include balance of customer account and aging status. The allowance for credit losses was $8.7 million and $12.2 million as of December 31, 2023 and December 31, 2022, respectively.
For those trade receivables that do not share similar risk characteristics, the allowance for expected credit losses is calculated on an individual basis. Risk characteristics relevant to our accounts receivable include balance of customer account and aging status. The allowance for credit losses was $1.2 million and $8.7 million as of December 31, 2024 and December 31, 2023, respectively.
We may not be able to secure additional financing to meet our operating requirements on acceptable terms, or at all. Sources of Liquidity We primarily finance our operations and capital expenditures through cash flows generated by operations.
We may not be able to secure additional financing to meet our operating requirements on acceptable terms, or at all. 60 Table of Contents Sources of Liquidity We primarily finance our operations and capital expenditures through cash flows generated by operations.
Eight additional states have legalized forms of low-potency cannabis, for select medical conditions. Only three states continue to prohibit cannabis entirely. We intend to explore new expansion opportunities as additional jurisdictions legalize cannabis for medical or adult use and leverage our business model informed by our 15-year operating history to enter new markets.
Eight additional states have legalized forms of low-potency cannabis, for select medical conditions. Only two states continue to prohibit cannabis entirely. We intend to explore new expansion opportunities as additional jurisdictions legalize cannabis for medical or adult use and leverage our business model informed by our 16-year operating history to enter new markets.
Business.” Unless stated otherwise, the comparisons presented in this discussion and analysis refer to the year-over-year comparison of changes in our financial condition and results of operations as of and for the fiscal years ended December 31, 2023 and December 31, 2022.
Business.” Unless stated otherwise, the comparisons presented in this discussion and analysis refer to the year-over-year comparison of changes in our financial condition and results of operations as of and for the years ended December 31, 2024 and December 31, 2023.
Assuming a reinstatement of the TRA liability, there are several assumptions that would be relevant such as, no material changes in relevant tax law, that there are no future redemptions or exchanges of Class A Units and that we earn sufficient taxable income to realize all tax benefits that are subject to the TRA, the tax savings associated with acquisitions of common units in the Business Combination would aggregate to approximately $166.3 million, as of December 31, 2023, over 15 years from Closing Date.
Assuming a reinstatement of the TRA liability, there are several assumptions that would be relevant such as, no material changes in relevant tax law, that there are no future redemptions or exchanges to Class A Units and that we earn sufficient taxable income to realize all tax benefits that are subject to the TRA, the tax savings associated with acquisitions of common units in the Business Combination would aggregate to approximately $165.7 million, as of December 31, 2024, over 15 years from the Closing Date.
Prices of certain commodity products, including gas prices, are historically volatile and subject to fluctuations arising from changes in domestic and international supply and demand, labor costs, competition, market speculation, government regulations, trade restrictions and tariffs, inflation, the military conflict between Russia and Ukraine and the recent state of war 52 Table of Contents between Israel and Hamas and the related risk of a larger regional conflict.
Prices of certain commodity products, including gas prices, are historically volatile and subject to fluctuations arising from changes in domestic and international supply and demand, labor costs, competition, market speculation, government regulations, trade restrictions and tariffs, inflation, the military conflict between Russia and Ukraine and the current state of war between Israel and Hamas and the related risk of a larger regional conflict.
Our actual results could differ from these estimates. We believe that the assumptions and estimates associated with revenue recognition, income taxes, stock-based compensation, capitalized software development costs, provision for doubtful accounts, goodwill and intangible assets and fair value measurements to have the greatest potential impact on our consolidated financial statements.
Our actual results could differ from these estimates. We believe that the assumptions and estimates associated with revenue recognition, income taxes, stock-based compensation, capitalized software development costs, provision (recovery) for credit losses, goodwill and intangible assets and fair value measurements to have the greatest potential impact on our consolidated financial statements.
Stock-based Compensation We measure fair value of employee stock-based compensation awards on the date of grant and allocate the related expense over the requisite service period. The fair value of restricted stock units (“RSUs”) and performance-based restricted stock units (“PRSUs”) is equal to the market price of our Class A common stock on the date of grant.
Stock-based Compensation We measure fair value of employee stock-based compensation awards on the date of grant and allocate the related expense over the requisite service period. The fair value of restricted stock units and performance-based restricted stock units without market conditions is equal to the market price of our Class A common stock on the date of grant.
In connection with such potential future tax benefits resulting from the Business Combination and subsequent redemptions or exchanges of WHM Units, we have established a deferred tax asset for the additional tax basis and a corresponding TRA liability of 85% of the expected benefit. The remaining 15% is recorded within paid-in capital.
In connection with such potential future tax benefits resulting from the Business Combination and subsequent redemptions or exchanges of WMH Units, we have established a deferred tax asset for the additional tax basis and a corresponding TRA liability of 85% of the expected benefit. The remaining 15% is 63 Table of Contents recorded within paid-in capital.
Accordingly, the use of different market assumptions and/or different valuation techniques may have a material effect on the estimated fair value, and such changes could materially impact our results of operations in future periods. As of December 31, 2023 and December 31, 2022, warrant liability was $0.6 million and $2.1 million, respectively.
Accordingly, the use of different market assumptions and/or different valuation techniques may have a material effect on the estimated fair value, and such changes could materially impact our results of operations in future periods. As of December 31, 2024 and December 31, 2023, warrant liability was $0.6 million.
If our brand promotion activities are not successful, our operating results and growth may be adversely impacted. 53 Table of Contents Investments in Growth We intend to continue to make focused organic and inorganic investments to grow our revenue and scale operations to support that growth.
If our brand promotion activities are not successful, our operating results and growth may be adversely impacted. Investments in Growth We intend to continue to make focused organic and inorganic investments to grow our revenue and scale operations to support that growth.
We continued the remeasurement of the valuation allowance during the year ended December 31, 2023 and determined that a full valuation allowance was required as of December 31, 2023. See Note 16, “Income Taxes,” to our consolidated financial statements included herein.
We continued the remeasurement of the valuation allowance during the year ended December 31, 2024 and determined that a full valuation allowance was required as of December 31, 2024. See Note 15, “Income Taxes,” to our consolidated financial statements included herein.
Net cash provided by operating activities for the year ended December 31, 2023 was $22.9 million, which resulted from net loss of $15.7 million, non-cash items of $52.8 million, consisting of asset impairment charges of $24.4 million, stock-based compensation expense of $13.5 million, depreciation and amortization of $12.1 million, amortization of right of use lease assets of $4.9 million, provision for credit losses of $1.8 million, TRA remeasurement of $1.3 million, partially offset by a gain from the discharge of a holdback obligation related to a prior acquisition of $3.7 million, and the change in fair value of warrant liability of $1.5 million.
Net cash used in operating activities for the year ended December 31, 2023 was $22.9 million , which resulted from net loss of $15.7 million, together with net cash outflows of $14.2 million from changes in operating assets and liabilities, and non-cash items of $52.8 million, consisting of asset impairment charges of $24.4 million, stock-based compensation expense of $13.5 million, depreciation and amortization of $12.1 million, amortization of right of use lease assets of $4.9 million, provision for credit losses of $1.8 million, TRA remeasurement of $1.3 million, partially offset by a gain from the discharge of a holdback obligation related to a prior acquisition of $3.7 million, and the change in fair value of warrant liability of $1.5 million.
Average Monthly Revenue Per Paying Client Average monthly revenue per paying client measures how much clients, for the period of measurement, are willing to pay us for our subscription and additional offerings and the efficiency of the bid-auction process for our featured listings placements.
Average Monthly Revenues Per Paying Client Average monthly revenues per paying client measures how much clients, for the period of measurement, are willing to pay us for our subscription and additional offerings and the efficiency of the bid-auction process for our featured listings placements (“Featured Listings”).
We expect that the payments we will be required to make under the TRA will not be substantial, and therefore, in conjunction with the recording of a full valuation allowance on the related TRA deferred tax assets, we have also adjusted the TRA liabilities as of December 31, 2023.
We expect that the payments we will be required to make under the TRA will not be substantial, and therefore, in conjunction with the recording a full valuation allowance on the related TRA deferred tax assets for the year ended December 31, 2022, we have also adjusted the TRA liabilities as of December 31, 2024 and December 31, 2023.
Our lease agreements do not provide an implicit rate and as a result, we used an estimated incremental borrowing rate, which was derived from third-party information available at the time we adopted ASC 842 in determining the present value of future lease payments.
Our lease agreements do not provide an implicit rate and as a result, we used an estimated incremental borrowing rate, which was derived from third-party information available at the time we adopted Accounting Standards Codification (“ASC”) 842 in determining the present value of future lease payments.
Non-GAAP Financial Measures Net Income (Loss) to EBITDA and Adjusted EBITDA Our financial statements, including net income (loss), are prepared in accordance with GAAP. For more information regarding the components within our net income (loss), see “Components of Our Results of Operations” above.
Non-GAAP Financial Measures Net Income (Loss) to EBITDA and Adjusted EBITDA Our financial statements, including net income (loss), are prepared in accordance with GAAP. For more information regarding the components within our net income (loss), refer to “Components of Our Results of Operations” below.
We also have minimum outstanding purchase obligations of $7.1 million in 2024, $7.3 million in 2025 and $7.5 million in 2026, due under software license agreements, of which the majority relates to our three-year AWS Enterprise agreement. As of December 31, 2023 and 2022, our TRA liability was $1.8 million and $0.5 million, respectively.
We also have minimum outstanding purchase obligations of $7.3 million in 2025 and $7.5 million in 2026, due under software license agreements, of which the majority relates to the remaining two years of our three-year AWS Enterprise agreement. As of December 31, 2024 and December 31, 2023, our TRA liability was $4.4 million and $1.8 million, respectively.
Accounts Receivable We measure credit losses on our trade accounts receivable using the current expected credit loss model under Accounting Standards Codification 326 Financial Instruments – Credit Losses , which is based on the expected losses rather than incurred losses.
Accounts Receivable We measure credit losses on our trade accounts receivable using the current expected credit loss model under ASC 326 Financial Instruments – Credit Losses , which is based on the expected losses rather than incurred losses.
General and administrative expenses also include provision for doubtful accounts and professional and outside services related to legal and other consulting services. General and administrative expenses are primarily driven by headcount required to support our business and meet our obligations as a public company.
General and administrative expenses also include provision (recovery) for credit losses and professional and outside services related to legal and other consulting services. General and administrative expenses are primarily driven by headcount required to support our business and meet our obligations as a public company.
In addition, any client may choose to purchase multiple listing solutions for each of their retail websites or businesses. Average monthly paying clients for the year ended December 31, 2023 decreased by approximately 1% to 5,419 average monthly paying clients from 5,457 average monthly paying clients in the same period in 2022.
In addition, any client may choose to purchase multiple listing solutions for each of their retail websites or businesses. Average monthly paying clients for the year ended December 31, 2024 decreased by approximately 6% to 5,077 average monthly paying clients from 5,419 average monthly paying clients in the same period in 2023.
The Weedmaps marketplace is a premier destination for cannabis consumers to discover and browse information regarding cannabis and cannabis products with 5,419 average monthly paying business clients during the year ended December 31, 2023, on the supply-side of our marketplace. These paying clients include retailers, brands and other client types (such as doctors).
The Weedmaps marketplace is a premier destination for cannabis consumers to discover and browse information regarding cannabis and cannabi s products with 5,077 average monthly paying clients during the year ended December 31, 2024, on the supply-side of our marketplace. These paying clients include retailers, brands and other client types (such as doctors).
The changes in operating assets and liabilities are mostly due to fluctuations in timing of cash receipts and payments. 60 Table of Contents Net Cash Used in Investing Activities Net cash used in investing activities for the year ended December 31, 2023 was $11.9 million, which resulted from $11.9 million cash paid for purchases of property and equipment, including certain capitalized software development cost.
The changes in operating assets and liabilities are mostly due to fluctuations in timing of cash receipts and payments. Net Cash Used in Investing Activities Net cash used in investing activities for the year ended December 31, 2024 was $11.6 million, which resulted from $11.6 million cash paid for purchases of property and equipment, including certain capitalized software development cost.
We recognize revenue by applying the following five steps: the contract with the customer is identified; the performance obligations in the contract are identified; the 61 Table of Contents transaction price is determined; the transaction price is allocated to the performance obligations in the contract; and revenue is recognized when (or as) we satisfy these performance obligations in an amount that reflects the consideration it expects to be entitled to in exchange for those services.
We recognize revenue by applying the following five steps: the contract with the customer is identified; the performance obligations in the contract are identified; the transaction price is determined; the transaction price is allocated to the performance obligations in the contract; and revenue is recognized when (or as) we satisfy these performance obligations in an amount that reflects the consideration we expect to be entitled to in exchange for those services.
The assessment of collectability considers whether we may limit its exposure to credit risk through its right to stop transferring additional service in the event the customer is delinquent. See Note 3, “ Revenue from Contracts with Customers ,” to our consolidated financial statements included herein.
The assessment of collectability considers whether we may limit its exposure to credit risk through its right to stop transferring additional service in the event the customer is delinquent. For more information, refer to Note 3, “Revenue from Contracts with Customers,” of our consolidated financial statements included herein.
Further, these clients, who can choose to purchase multiple listings solutions for each business, had purchased over 7,800 listing pages as of December 31, 2023. We sell our Weedmaps for Business suite in the United States and have a limited number of non-monetized listings in several other countries including Austria, Canada, Germany, the Netherlands, Spain and Switzerland.
Further, these clients, who can choose to purchase multiple listings solutions for each business, had purchased approximately 8,700 listing pages as of December 31, 2024. We sell our Weedmaps for Business suite in the United States and have a limited number of non-monetized listings in several other countries including Austria, Canada, Germany, the Netherlands, Spain, Switzerland, and Uruguay.
Under this scenario, we would be required to pay to the Class A Unit holders approximately 85% of such amount, or $141.3 million, as of December 31, 2023, over the 15-year period from the Closing Date.
Under this scenario, we would be required to pay to the Class A Unit holders approximately 85% of such amount, or $140.8 million, as of December 31, 2024, over the 15-year period from the Closing Date.
As of December 31, 2023 and 2022 , our operating leases had a weighted average remaining lease term of 6.3 years and 6.8 years and a weighted-average discount rate of 9.8%.
As of December 31, 2024 and December 31, 2023 , our operating leases had a weighted average remaining lease term of 6.0 years and 6.3 years and a weighted-average discount rate of 10.0% and 9.8%, respectively .
Asset Impairment Charges The increase in asset impairment charges was primarily due to $10.9 million in impairment of operating lease ROU asset and $1.3 million in impairment of leasehold improvement associated with our second headquarter space in Los Angeles, California, $8.7 million in i mpairment of intangible assets, capitalized software and property and equipment associated with the sunset of certain product offerings in December 2023 and $3.5 million related to the impairment of an equity investment.
In 2023, we recorded $10.9 million in impairment of operating lease ROU asset, $1.3 million in impairment of leasehold improvement associated with our office space in Los Angeles, California, $8.7 million in i mpairment of intangible assets, capitalized software and property and equipment associated with the sunset of certain product offerings in December 2023 and $3.5 million related to the impairment of an equity investment.
We expect to fund our liquidity requirements from cash and working capital on hand at December 31, 2023, as well as from cash provided by operating activities. We believe 59 Table of Contents that our existing cash and cash generated from operations will be sufficient to meet our anticipated cash needs for at least the next 12 months.
We expect to fund our short-term and long-term liquidity requirements from cash and working capital on hand at December 31, 2024, as well as from cash provided by operating activities. We believe that our existing cash and cash generated from operations will be sufficient to meet our anticipated cash needs for at least the next 12 months.
The ROU impairment charges are included in general and administrative expenses in the consolidated statements of operations. We assess impairment of property and equipment when an event and change in circumstance indicates that the carrying value of such assets may not be recoverable.
The ROU impairment charges are included in asset impairment charges in the consolidated statements of operations. 65 Table of Contents We assess impairment of property and equipment when an event and change in circumstance indicates that the carrying value of such assets may not be recoverable.
The fair value of the Private Placement Warrants may change significantly as additional data is obtained. In evaluating this information, considerable judgment is required to interpret the data used to develop the assumptions and estimates. The estimates of fair value may not be indicative of the amounts that could be realized in a current market exchange.
In evaluating this information, considerable judgment is required to interpret the data used to develop the assumptions and estimates. The estimates of fair value may not be indicative of the amounts that could be realized in a current market exchange.
Accordingly, no provision for U.S. federal and state income taxes has been recorded in the financial statements for the period of January 1 to June 16, 2021 as this period was prior to the Business Combination.
As a partnership, WMH LLC is not subject to U.S. federal and certain state and local income taxes. Accordingly, no provision for U.S. federal and state income taxes has been recorded in the financial statements for the period of January 1 to June 16, 2021 as this period was prior to the Business Combination.
Our calculation of the TRA asset and liability requires estimates of its future qualified taxable income over the term of the TRA as a basis to determine if the related tax benefits are expected to be realized.
Our calculation of the TRA asset and liability requires estimates of its future qualified taxable income over the term of the TRA as a basis to determine if the related tax benefits are expected to be realized. As of December 31, 2024 and December 31, 2023, TRA liability were $4.4 million and $1.8 million.
For the years ended December 31, 2023 and 2022, we capitalized $13.1 million and $15.5 million of costs related to the development of software applications.
For the years ended December 31, 2024 and 2023, we capitalized $11.6 million and $13.1 million of costs related to the development of software applications.
The net cash outflows from changes in operating assets and liabilities were primarily due to an increase in accounts receivables of $16.3 million, a decrease in deferred revenue of $1.9 million, a decrease in operating lease liabilities of $5.5 million, partially offset by a decrease in prepaid expenses and other current assets of $7.2 million and an increase in accounts payable and accrued expenses of $14.9 million.
Net cash outflows from changes in operating assets and liabilities were primarily due to a decrease in operating lease liabilities of $5.6 million, an increase in prepaid expenses and other assets of $0.5 million and a decrease in deferred revenue of $0.5 million, partially offset by a decrease in accounts receivable of $1.1 million and an increase in accounts payable and accrued expenses of $1.0 million.
As of December 31, 2023 and 2022, TRA liability were $1.8 million and $0.5 million. 62 Table of Contents Based on the weight of all available evidence, both positive and negative, we determined during the three months ended December 31, 2022 tha t a full valuation allowance was required against our net deferred tax assets.
Based on the weight of all available evidence, both positive and negative, we determined during the three months ended December 31, 2022 tha t a full valuation allowance was required against our net deferred tax assets.
Below we have provided a reconciliation of net loss (the most directly comparable GAAP financial measure) to EBITDA; and from EBITDA to Adjusted EBITDA. We present EBITDA and Adjusted EBITDA because these metrics are a key measure used by our management to evaluate our operating performance, generate future operating plans and make strategic decisions regarding the allocation of investment capacity.
We present EBITDA and Adjusted EBITDA because these metrics are a key measure used by our management to evaluate our operating performance, generate future operating plans and make strategic decisions regarding the allocation of investment capacity.
Net cash used in investing activities for the year ended December 31, 2022 was $17.8 million, which resulted from $16.1 million cash paid for purchases of property and equipment, including certain capitalized software development cost, $1.0 million cash paid for other investments and $0.7 million net cash paid for acquisitions, Net Cash Provided by (Used in) Financing Activities Net Cash used in financing activities for the year ended December 31, 2023 was $5.3 million, which resulted from $7.2 million of distribution payments to members of WMH LLC, $1.5 million for repayment of insurance premium financing and $0.4 million in proceeds from collection of related party note receivable.
Net cash used in investing activities for the year ended December 31, 2023 was $11.9 million, which resulted from $11.9 million cash paid for purchases of property and equipment, including certain capitalized software development cost. 61 Table of Contents Net Cash Provided by (Used in) Financing Activities Net cash used in financing activities for the year ended December 31, 2024 was $7.4 million, which resulted from $7.7 million of distribution payments to members of WMH LLC, $0.1 million in TRA payments and $0.4 million in proceeds from collection of related party note receivable.
(2) Average monthly revenue per paying client is defined as the average monthly revenue for any particular period divided by the average monthly paying clients in the same respective period. (3) Average monthly paying clients are defined as the average of the number of paying clients billed in a month across a particular period (and for which services were provided).
(3) Average monthly paying clients are defined as the average of the number of paying clients billed in a month across a particular period (and for which services were provided).
Critical Accounting Estimates Income Taxes As a result of the Business Combination, WM Technology, Inc. became the sole managing member of WMH LLC, which is treated as a partnership for U.S. federal and most applicable state and local income tax purposes. As a partnership, WMH LLC is not subject to U.S. federal and certain state and local income taxes.
See Note 2. “Revenue Recognition” of our consolidated financial statements for additional information. Critical Accounting Estimates Income Taxes As a result of the Business Combination, WM Technology, Inc. became the sole managing member of WMH LLC, which is treated as a partnership for U.S. federal and most applicable state and local income tax purposes.
For amortizable intangible assets, impairment exists when the carrying amount of the intangible asset exceeds its fair value. At least annually, the remaining useful life is evaluated.
For amortizable intangible assets, impairment exists when the carrying amount of the intangible asset exceeds its fair value. At least annually, the remaining useful life is evaluated. No intangible asset impairment charges have been recorded for the year ended December 31, 2024.
We expected these pressures given the continued liquidity challenges that clients are facing. Average Monthly Paying Clients We define average monthly paying clients as the monthly average of clients billed each month over a particular period (and for which services were provided).
Average Monthly Paying Clients We define average monthly paying clients as the monthly average of clients billed each month over a particular period (and for which services were provided).
Key Operating and Financial Metrics We monitor the following key financial and operational metrics to evaluate our business, measure our performance, identify trends affecting our business, formulate business plans and make strategic decisions.
Key Operating and Financial Metrics We monitor the following key financial and operational metrics to evaluate our business, measure our performance, identify trends affecting our business, formulate business plans and make strategic decisions. The following table summarizes our financial performance for the year ended December 31, 2024 compared to our financial performance for the years ended December 31, 2023.
The warrants are measured at fair value under ASC 820 - Fair Value Measurements . The fair value of the Public Warrants is classified as Level 1 financial instruments and is based on the publicly listed trading price of our Public Warrants. The fair value of the Private Warrants is determined with Level 3 inputs using the Black-Scholes model.
The fair value of the Public Warrants is classified as Level 1 financial instruments and is based on the publicly listed trading price of our Public Warrants. The fair value of the Private Warrants is determined with Level 3 inputs using the Black-Scholes model. The fair value of the Private Placement Warrants may change significantly as additional data is obtained.
Liquidity and Capital Resources The following tables show our cash, accounts receivable and working capital as of the dates indicated: As of December 31, 2023 2022 (in thousands) Cash $ 34,350 $ 28,583 Accounts receivable, net $ 11,158 $ 17,438 Working capital $ 17,771 $ 8,660 As of December 31, 2023 and December 31, 2022, we had cash of $34.4 million and $28.6 million, respectively.
Liquidity and Capital Resources The following tables show our cash, accounts receivable and working capital as of the dates indicated: As of December 31, 2024 2023 (in thousands) Cash $ 51,966 $ 34,350 Accounts receivable, net $ 10,060 $ 11,158 Working capital $ 39,079 $ 17,771 As of December 31, 2024 and December 31, 2023, we had cash of $52.0 million and $34.4 million, respectively.
Revenue for any new service provided to the customer is not probable of collection until we have collected or reached a settlement on the customers old outstanding accounts receivable balances.
When a customer is identified to be a significant collection risk, we fully reserve for all outstanding accounts receivable and records a credit loss for these receivables. Revenue for any new service provided to the customer is not probable of collection until we have collected or reached a settlement on the customers old outstanding accounts receivable balances.
For a detailed discussion of our results of operations, see “Results of Operations” below. 51 Table of Contents Years Ended December 31, 2023 2022 2021 (dollars in thousands, except for revenue per paying client) Net revenues $ 187,993 $ 215,531 $ 193,146 Net income (loss) $ (15,727) $ (82,651) $ 152,218 EBITDA (1) $ (3,534) $ 107,924 $ 156,042 Adjusted EBITDA (1) $ 36,907 $ (9,633) $ 31,698 Average monthly revenue per paying client (2) $ 2,891 $ 3,291 $ 3,711 Average monthly paying clients (3) 5,419 5,457 4,337 ___________________________ (1) For further information about how we calculate EBITDA and Adjusted EBITDA as well as limitations of its use and a reconciliation of EBITDA and Adjusted EBITDA to net income (loss), see “Net Income (Loss) to EBITDA and Adjusted EBITDA” in Non-GAAP Financial Measurements below.
For a detailed discussion of our results of operations, see “Results of Operations” below. 52 Table of Contents Years Ended December 31, 2024 2023 (dollars in thousands, except for revenue per paying client) Revenues $ 184,514 $ 187,993 Net income (loss) $ 12,187 $ (15,727) EBITDA (1) $ 25,089 $ (3,534) Adjusted EBITDA (1) $ 42,919 $ 36,907 Average monthly revenues per paying client (2) $ 3,029 $ 2,891 Average monthly paying clients (3) 5,077 5,419 ___________________________ (1) For further information about how we calculate EBITDA and Adjusted EBITDA as well as limitations of its use and a reconciliation of EBITDA and Adjusted EBITDA to net income (loss), see “Net Income (Loss) to EBITDA and Adjusted EBITDA” in Non-GAAP Financial Measurements below.
Net loss for the year ended December 31, 2023 was $15.7 million compared to a net loss of $82.7 million for the year ended December 31, 2022.
Net income for the year ended December 31, 2024 was $12.2 million compared with a net loss of $15.7 million for the year ended December 31, 2023.
We believe that continued investment in our platform is important for our growth and expect our product development expenses will increase in a manner consistent with revenue growth as our operations grow. 54 Table of Contents General and Administrative Expenses General and administrative expenses consist primarily of payroll, benefit costs and stock-based compensation expense for our employees involved in general corporate functions including our senior leadership team as well as costs associated with the use by these functions of software and facilities and equipment, such as rent, insurance and other occupancy expenses.
General and Administrative Expenses General and administrative expenses consist primarily of payroll, benefit costs and stock-based compensation expense for our employees involved in general corporate functions including our senior leadership team as well as costs associated with the use by these functions of software and facilities and equipment, such as rent, insurance and other occupancy expenses.
We believe that expansion of the number and types of cannabis businesses that choose to list on our platform will continue to make our platform more compelling for consumers and drive traffic and consumer engagement, which in turn will make our platform more valuable to cannabis businesses.
We believe that expansion of the number and types of cannabis businesses that choose to list on our platform will continue to make our platform more compelling for consumers and drive traffic and consumer engagement, which in turn will make our platform more valuable to cannabis businesses. 54 Table of Contents Growth and Retention of Our Paying Clients Our revenue grows primarily through acquiring and retaining paying clients and increasing the revenue per paying client over time.
Goodwill is not amortized and is subject to annual impairment testing, or between annual tests if an event or change in circumstance occurs that would more likely than not reduce the fair value of a reporting unit below its carrying value.
Significant estimates and assumptions in valuing acquired intangible assets and liabilities include projected cash flows attributable to the assets or liabilities, asset useful lives and discount rates. 64 Table of Contents Goodwill is not amortized and is subject to annual impairment testing, or between annual tests if an event or change in circumstance occurs that would more likely than not reduce the fair value of a reporting unit below its carrying value.
Our Weedmaps for Business subscriptions generally have one-month terms that automatically renew unless notice of cancellation is provided in advance. Featured and deal listings and other WM Ad solutions are offered as add-on products to the Weedmaps for Business subscriptions. Featured and deal listings provide customers with premium placement ad solutions and discount and promotion pricing tools.
Featured and deal listings and other WM Ad solutions are offered as add-on products to the Weedmaps for Business subscriptions. Featured and deal listings provide customers with premium placement ad solutions and discount and promotion pricing tools.
The decrease was primarily due to changes in TRA liability of $143.6 million and comparatively favorable changes in fair value of warrant liability of $23.9 million partially offset by an increase of $4.2 million related to a non-cash gain of $3.7 million associated with the discharge of a holdback obligation related to a prior acquisition and a decrease in political contribution expense of $0.5 million.
The decrease was primarily due to changes in fair value of warrant liability of $1.5 million and a non-cash gain of $3.7 million in 2023 associated with the discharge of a holdback obligation related to a prior acquisition, an increase in TRA liability of $1.5 million, a decrease in property and other taxes of $1.0 million and an increase in net interest income of $0.4 million.
Cash Flows Years Ended December 31, 2023 2022 2021 (in thousands) Net cash provided by (used in) operating activities $ 22,928 $ (11,621) $ 30,190 Net cash used in investing activities $ (11,871) $ (17,768) $ (30,435) Net cash provided by (used in) financing activities $ (5,290) $ (9,805) $ 48,103 Net Cash Provided by (Used In) Operating Activities Cash from operating activities consists primarily of net income (loss) adjusted for certain non-cash items, including depreciation, amortization and asset impairments, change in fair value of warrant liability, change in TRA liability, stock-based compensation, deferred taxes, impairment loss, provision for doubtful accounts and the effect of changes in working capital.
Cash Flows Years Ended December 31, 2024 2023 (in thousands) Net cash provided by operating activities $ 36,676 $ 22,928 Net cash used in investing activities $ (11,637) $ (11,871) Net cash used in financing activities $ (7,423) $ (5,290) Net Cash Provided by Operating Activities Cash from operating activities consists primarily of net income (loss) adjusted for certain non-cash items, including depreciation and amortization, change in fair value of warrant liability, change in TRA liability, amortization of right-of-use lease assets, stock-based compensation, asset impairment charges, gain on lease termination, provision (recovery) for credit losses and the effect of changes in working capital.
The fair value of the Class P Units is measured using the Black-Scholes-Merton valuation model. When awards include a performance condition that impacts the vesting of the award, we record compensation cost when it becomes probable that the performance condition will be met.
When awards include a performance condition of the Company that impacts the vesting of the award, we record compensation cost when it becomes probable that the performance condition will be met.
Amortization expense related to capitalized software development cost is included in depreciation, amortization and asset impairment expense in the consolidated statements of operations.
Product development costs that do not meet the criteria for capitalization are expensed as incurred. Amortization expense related to capitalized software development cost is included in depreciation, amortization and asset impairment expense in the consolidated statements of operations.
No impairments to property and equipment were recorded during the years ended December 31, 2022 and 2021. Fair Value Measurements In connection with the Business Combination, we assumed 12,499,993 Public Warrants and 7,000,000 Private Placement Warrants. As of December 31, 2023, 12,499,973 of the Public Warrant and all of the Private Placement Warrants remained outstanding .
Fair Value Measurements In connection with the Business Combination, we assumed 12,499,993 Public Warrants and 7,000,000 Private Placement Warrants. As of December 31, 2024, 12,499,973 of the Public Warrant and all of the Private Placement Warrants remained outstanding. The warrants are measured at fair value under ASC 820 - Fair Value Measurements .
See Note 2, “Summary of Significant Accounting Policies” and Note 4, “Leases,” to our consolidated financial statements for further discuss. 57 Table of Contents Other Income (Expense), net Years Ended December 31, Change 2023 2022 ($) (%) (dollars in thousands) Change in fair value of warrant liability $ 1,505 $ 25,370 $ (23,865) (94) % Change in tax receivable agreement liability (1,256) 142,352 (143,608) (101) % Other income (expense) 2,574 (1,674) 4,248 (254) % Other income (expense), net $ 2,823 $ 166,048 $ (163,225) (98) % Other income (expense), net decreased by $163.2 million for the year ended December 31, 2023 compared to the same period in 2022.
See Note 2, “Summary of Significant Accounting Policies” and Note 5, “Leases,” to our consolidated financial statements for further discussion. 59 Table of Contents Other Income (Expense), net Years Ended December 31, Change 2024 2023 ($) (%) (dollars in thousands) Change in fair value of warrant liability $ — $ 1,505 $ (1,505) (100) % Change in tax receivable agreement liability (2,773) (1,256) (1,517) 121 % Other income 258 2,574 (2,316) (90) % Other income (expense), net $ (2,515) $ 2,823 $ (5,338) (189) % Other income (expense), net decreased by $5.3 million for the year ended December 31, 2024 compared to the same period in 2023.
The level of achievement of such goals in the performance-based restricted stock awards may cause the actual number of units that ultimately vest to range from 0% to 200% of the original units granted. Forfeitures of stock-based awards are recognized as they occur.
The level of achievement of such goals in the performance-based restricted stock awards may cause the actual number of units that ultimately vest to range from 0% to 200% of the original units granted. When awards include a performance condition of the markets, the vesting of the award is dependent upon the attainment of a target stock price.
The decrease in compensation expense were due to decreased headcount of approximately 28% in 2023 compared to the prior year. Depreciation and Amortization The increase in depreciation and amortization expense was primarily due to an increase in capitalized software amortization of $2.2 million, partially offset by a decrease in depreciation expense related to other assets of $1.6 million.
Depreciation and Amortization The increase in depreciation and amortization expense was primarily due to an increase of $2.4 million in depreciation primarily from capitalized software amortization, partially offset by a decrease of $1.2 million in amortization of intangible assets. Asset Impairment Charges The decrease in asset impairment charges was primarily due to $24.4 million in asset impairment charges from 2023.

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