Stifel: Weedmaps Best Positioned To Capitalize On Category Growth

In a recent first-quarter outlook report, analysts from Stifel, an American multinational independent investment bank and financial services company, had positive comments on Weedmaps, a tech company serving the cannabis industry, reported journalist Deborah Borchardt for Green Market Report.

What Happened: "We believe WM Technology is currently the best positioned public cannabis company to capitalize on category growth, with the ability to lead growth with unmatched capital efficiency, with the shares continuing to undervalue our robust growth outlook,” the analysts said.

“We estimate the 1Q22 North American regulated cannabis sales grew 10%. We estimate Cronos Group and WM Technology’s 1Q22 revenue growth will dramatically outperform the category (+86%, 35% respectfully).”

The analysts estimate that in 2022, U.S. state-licensed sales will grow to $27.2 billion.

“Our outlook suggests WM Technology will showcase a differentiated growth profile profitably capitalizing on cannabis category growth while utilizing its significant capital advantage to expand the platform’s reach and evolve its comprehensive SaaS offering for cannabis operators,” wrote analyst W. Andrew Carter, who kept a Buy rating on WM Technology, Inc. MAPS, and reduced the price target to $10 per share.

“We estimate 28% CAGR revenue growth (FY21-FY23E) predicated on increasing penetration, growing wallet share, and participating in the growth of six key U.S. markets we estimate will grow to over $13 billion in 2023,” added the analyst.

“We believe our outlook will prove conservative given the resources for advertising, product development, and M&A. We believe the current U.S. environment provides WM Technology the ability to enhance its platform and deepen its moat without competition from well-resourced technology companies, thereby enhancing the ability to capitalize on our $100 billion U.S. state-licensed category estimate,” Carter concluded.

What's New With Weedmaps? As reported during its first-quarter 2022 earnings call, WM Technology has completed the acquisition of cannabis-focused digital menu and ad company Enlighten. Thanks to the acquisition, Weedmaps will now be able to offer marketing options in dispensaries at the point of purchase.

While Weedmaps has led the online cannabis space, the tools Enlighten brings into the fold allow Weedmaps to offer omnichannel marketing throughout the buying journey regardless of whether the customer is shopping from their computer or at a physical storefront.

Image By Ilona Szentivanyi.