Cannabis Market Movers: Mid-December 2023’s Rising Penny Stocks in Marijuana Sector

In the rapidly evolving landscape of the cannabis industry, December 2023 has been marked by a significant upsurge in the performance of top marijuana stocks. This surge is underpinned by staggering statistics that highlight the industry’s robust growth both in the United States and globally. The legal cannabis market in the U.S. alone is projected to exceed $30 billion by the end of 2023, representing a year-over-year growth of approximately 30%, according to recent market analyses. Globally, the industry is following a similar trajectory, with forecasts suggesting a market valuation of over $90 billion by 2025. This exponential growth is driven by increasing legalization, the widening acceptance of cannabis for both medical and recreational use, and the innovative expansion of product offerings.

Parallel to the rise of traditional cannabis producers and distributors, ancillary cannabis companies are also gaining prominence, particularly those offering digital solutions and online presence for cannabis businesses. These companies, often referred to as the “tech backbone” of the cannabis industry, are instrumental in addressing unique challenges such as marketing restrictions, supply chain management, and customer engagement in a heavily regulated market. Leading the pack are firms specializing in e-commerce platforms, digital marketing, and compliance software, which enable cannabis businesses to navigate legal complexities while expanding their customer reach. As investors turn their attention to this week’s top cannabis stocks, these ancillary companies are increasingly being recognized for their pivotal role in shaping the future of the cannabis industry.

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Best Online Ancillary Cannabis Stocks To Watch In 2024

  1. Leafly Holdings, Inc. (NASDAQ: LFLY)
  2. WM Technology, Inc. (NASDAQ: MAPS)

Leafly Holdings, Inc.

Leafly Holdings, Inc. is a well-known cannabis industry participant, well recognized for its comprehensive web platform and mobile app. The company, a Seattle, Washington-based company, offers useful information to cannabis industry companies as well as consumers. Their website helps consumers make educated decisions about their cannabis intake by providing a plethora of information on different cannabis strains, products, and shops.

Leafly, which is available in more than 20 states, has established itself as a trusted source for medical marijuana users and patients. The organization has established alliances with hundreds of delivery providers and dispensaries, facilitating clients’ access to their favorite items. Because of its easy-to-use layout, Leafly has been quite popular and is now a major player in the cannabis industry. Users can browse through various strains, read reviews, and even place orders online.

Third Quarter Financial Results

In the third quarter of 2023, Leafly Holdings, Inc. reported a total revenue of $10.6 million, a slight decrease compared to the same period in 2022 when it generated $11.8 million in revenue. However, there was a notable improvement in gross margin, which reached 89%, up from the 87% gross margin in Q3 2022. This indicates the company’s ability to maintain healthy profit margins.

Leafly demonstrated strong cost management in Q3 2023, with total operating expenses reduced to $10.9 million, marking a significant 33% reduction from the $16.3 million incurred in Q3 2022. Despite these efforts, the company reported a net loss of $2.2 million for the quarter, in contrast to a net income of $15.5 million in Q3 2022. It’s worth noting that the prior year’s net income included a $22.3 million non-cash benefit from a change in fair value derivative liabilities.

In terms of adjusted EBITDA, a non-GAAP measure used to assess operational performance, Leafly reported a loss of $0.2 million in Q3 2023, an improvement from the adjusted EBITDA loss of $5.2 million in the same quarter of the previous year. The company ended the quarter with $14.5 million in cash reserves, excluding restricted cash, which remained relatively stable compared to the previous quarter. These financial results suggest Leafly’s commitment to financial discipline and adaptability in a dynamic industry.

LFLY Stock Performance

LFLY stock closed on December 13th   at $5.43, down 16.85% in the past month of trading. Currently, the stock has a range of $4.68-$16.58 and is down 58.35% year to date.

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WM Technology, Inc.

Weedmaps, also known as WM Technology, Inc., is a well-known company in the cannabis sector. The company, which has its main office in Irvine, California, has a mobile app and web portal that provides a wealth of information to cannabis companies and consumers. Weedmaps offers a wealth of information, such as specifics on different cannabis strains, products, and local dispensaries.

Weedmaps has become a popular site for people looking for cannabis products and information, with a significant presence in more than 30 states across the United States. Through the platform, customers can easily access the cannabis products they want by connecting with a large network of shops and delivery services. Weedmaps also provides solutions to help companies in the sector run their operations and connect with more customers. As a result, the business has had a big impact on how the cannabis industry develops and how customers can get the goods and services they require.


Third Quarter 2023 Financial Highlights

In the third quarter of 2023, WM Technology, Inc. (Weedmaps) reported financial highlights that reflect its position in the cannabis industry. The company generated revenue of $47.7 million during the quarter, slightly down from the $50.5 million in the same period of the prior year. While the number of average monthly paying clients decreased from 5,576 in the prior year to 5,414, the average monthly revenue per paying client also saw a slight decline, going from $3,019 to $2,938.

Despite these changes, Weedmaps showcased strong financial discipline, reporting a net loss of $2.5 million for the quarter, a significant improvement compared to the net loss of $10.5 million in the same period of the previous year. Notably, the company achieved a positive adjusted EBITDA of $10.7 million in Q3 2023, in contrast to the negative adjusted EBITDA of $(9.6) million in the prior year period. Weedmaps also maintained a healthy cash position of $27.7 million as of September 30, 2023, with no debt, indicating a solid financial foundation. The company’s performance highlights its resilience and ability to adapt to the dynamic cannabis industry.

MAPS Stock Performance

MAPS stock closed at $0.8360 on December 13th, down 16.40% in the last month of trading. The stock has a 52-week price range of $0.596- $1.88 and is down 17.32% year to date. According to analysts at CNN Business, MAPS stock has a 12-month average price target of $2.61 per share. In essence, this would represent an upside of 226.25% from its last trading price of $0.8360.

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Watching Top Cannabis Stocks For 2024

The realm of ancillary marijuana stocks is dynamic and growing. These stocks focus on giving cannabis an online presence. They are becoming a significant part of the investment landscape. These companies work outside of direct cannabis cultivation and sales. They provide crucial support services and technologies. Their offerings range from e-commerce platforms to marketing tools and regulatory compliance solutions.

The legal landscape of cannabis is evolving globally. In this context, ancillary businesses are becoming more important. They capitalize on the growing acceptance and legalization of cannabis. They do this without being involved in its direct production or sale. Their role in online platforms is key. It improves the accessibility and distribution of cannabis products. It also contributes significantly to market expansion and consumer education.

Investors interested in the cannabis market should look at top ancillary marijuana stocks. These stocks are key in enhancing cannabis’s online presence. They offer a unique investment chance. They tap into the industry’s growth. At the same time, they reduce risks linked to direct cannabis production. The future is bright for companies skilled in digital solutions, online marketing, and e-commerce. These areas are crucial in shaping consumer experiences and preferences today.

The cannabis industry is maturing. With this, ancillary companies are becoming more important. They stand out for investors wanting to diversify in a growing market. These players offer attractive options in this evolving market.

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