Washington, Colorado pot reforms spark Leafly's growth

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by RENAY SAN MIGUEL / KING5 News

NWCN.com

Posted on March 12, 2014 at 6:26 PM

Updated Wednesday, Mar 12 at 7:30 PM

Leafly's website first launched in 2010, when legal recreational marijuana was still a gleam in a pot smoker's bloodshot eyes.

Cy Scott and his co-founders wanted to offer an online resource for information on all the different strains of marijuana and their benefits for medical marijuana patients. Is Sour Diesel effective against migraines? Can Granddaddy Purple help arthritis patients? What's the impact on the body of an indica vs. a sativa?

Four years ago there were some competing websites, but "they kind of targeted the stereotypical cannabis consumer," Scott said, "so we wanted to do something a little more mainstream, a little bit of a broader audience target."

Leafly sought credibility by building a professional-looking database with some 60,000 user reviews of marijuana strains and the dispensaries that offer them. The company brought in revenue by charging dispensaries that wanted prime placement on the website.

The effort worked. Traffic doubled each year since the launch, and Leafly found itself having to hire more web designers/developers and content specialists. The company was acquired by Privateer Holdings, a Seattle-based venture capital firm focusing on cannabis-related entrepreneurial opportunities, and moved from California to the Emerald City.

Then recreational marijuana was legalized in Washington and Colorado, and suddenly events were threatening to get ahead of Leafly's business model.

"Washington and Colorado were a bit of a surprise for us," Scott admitted. "We had been previously mostly medical (marijuana). Since then we've had to pivot to support the recreational side as well."

A perfect "green" storm of sorts happened in January. Colorado started its retail sales.

 “We saw a pretty significant spike, three times the standard traffic," said Scott.

That was also the month that Leafly released a newer, better version of its mobile app with strain information that takes its design from the periodic table of chemical elements. The app quickly moved to the top of Apple's free medical app category, and Leafly is closing in on 750,000 downloads. Now the company averages more than a million unique visitors a month to both its website and mobile app.

The sky may be the limit for Leafly, but like other cannabis-related businesses, it still faces financial challenges thanks to the brave new world of marijuana regulation.

"We've lost a few banks over time, we've had to switch," Scott said. "We actually had an employee lose their bank at one point because of the industry we're in, so there's a bit of that stigma, that stereotype that we're still trying to get past."

But Scott believes that Washington's forthcoming retail sales - and the role of technology - will help Leafly put down some strong roots in the business world.

"I think technology's really helped us get where we're at right now with cannabis - the adoption rates, just the information that's available."
 

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