Business plan

Leafly secures $30 million to fund multi-year business plan before going public via deal with Merida

Online Cannabis Discovery Marketplace Leafly Holdings Inc. and Merida Merger Corp. I (NASDAQ:MCMJ), a special purpose acquisition company sponsored by Merida Capital Holdings, announced on Wednesday that it has entered into a $30 million convertible note purchase agreement with new investors led by Cohanzick Management LLC and its affiliates, an investment management company.

The additional funding should close immediately prior to the completion of the proposed business combination between Leafly and Merida. The funding will support Leafly’s current multi-year business plan.

“This deal provides additional funding certainty as Leafly enters the next phase of our journey as a public company,” Yoko Miyashita, CEO of Leafly noted. “After accelerating our growth trajectory in 2021, we look forward to using this significant new capital to expand our leading cannabis market and further enhance our technology platform, delivering more personalized consumer shopping experiences and generating more value for our retail partners.

transaction details

Funding will be in the in the form of unsecured convertible senior notes maturing in 2025, bearing interest at the rate of 8% per annum, paid in cash semi-annually in arrears on July 31 and January 31 of each year.

The Notes will be convertible at the option of the holders at any time prior to maturity at $12.5 per share.

In addition, Merida and Leafly entered into a second amendment to the merger agreement indicating that the proceeds received from the note purchase agreement will be counted towards Merida meeting the minimum cash condition required by the agreement.

Merger details

Leafly announced its IPO through a business combination with Merida in August. Under the agreement, Merida agreed to take the name Leafly, with its common stock listing on NASDAQ under the symbol “LFLY”.

The combined entity should have a fully diluted result an enterprise value of approximately $385 million and a net worth of approximately $532 million, subject to any redemption by Merida shareholders. In addition, the transaction, approved by the Boards of Directors of Leafly and Merida, is expected generate revenues of up to $161.5 million.

Merida noted that a special meeting to vote on the proposed business combination, originally scheduled for Jan. 14, will be adjourned to a later date. to be announced in order to give Merida shareholders sufficient time to assess the terms of the financing and certain additional information.

MCMJ Price Action

from Merida shares traded up 18.89% at $9.98 per share at the time of writing, Wednesday morning.

Photo: Courtesy of Steve Johnson of Pexels

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