The mammoth cannabis advertising platform Weedmaps hasn’t been spared from the corporate layoffs wave that seems to cut across different industries.WM Technology, the parent company of Weedmaps has announced a massive layoff of close to 175 employees home in a bid to trim operational costs. The operation that will run up to the first quarter of 2023 will cost the company about $10.7 million in severance payments and other employee benefits.
WM Technology posted a net loss of $10.5 million in the last quarter. In August this year, the company had laid off 10% of its staff. Going by these signs it’s apparent that the company is in the red. However, Weedmaps is not the only company in the cannabis industry that seems to have taken a financial nose dive. Canopy Growth (once the largest cannabis company globally), Curaleaf, Eaze, Akerna, and Dutchie, just to name a few, have taken a similar “cost reduction” path in the near past.
Is The Cannabis Industry on its Knees?
A recent survey conducted by the National Cannabis Industry Association revealed that only about 26% of cannabis operators are profitable. Several factors such as high taxation (section 280E) and unfair competition from the illicit market could be attributed to this. However,with 26% of cannabis businesses turning in a profit in this dire economic times, the industry is matching up to expectations. If anything, we have witnessed similar layoffs involving conglomerates such as Meta, Twitter, and Amazon, to name but a few.