How Weedmaps makes all of its money
Weedmaps has been with us since 2008 when it was founded by Keith Hoerling and Justin Hartfield. The company currently supports approximately 400 employees, and it made leaps and bounds long before legalization took hold, surfing the waves of cash that flowed through the black-market, but its revenue stream is rarely a topic of conversation.
For the longest time, Weedmaps tried to sweep the truth under the rug by keeping its contracts on the down-low, and that made sense. After all, most of its clientele were illicit vendors, but eventually, businesses and people reached out to expose the inner workings of how money was being made. Things are quite a bit different now, as Weedmaps has gone public, and in the transition, ditched all of its black-market connections. Still, some things remain the same, and one of them is how the company makes so much money.
No sales percentages
Many customers and loyal visitors think of Weedmaps as a sort of in-between platform that facilitates connections between individuals who are ready to do business in the green space. It’s got one of the largest dispensary databases in the world, and it offers a wide range of information, education, and entertainment, but it’s not a pay per purchase service like what you’ll find from Instacart or DoorDash, where a certain percentage of each sale made is taken off the top.
No, this company’s business model is entirely unique because it isn’t dependent on a specific number of sales. Of course, increasing traffic can lead to significant gains through avenues that we’ll get into in a minute, but the majority of the money brought in by Weedmaps comes from two distinct sources, which are advertising and listings.
Technically both streams of revenue could be considered advertising, but for the purposes of this conversation, we’re using it to describe those ads that pop up almost everywhere you go, be it on the app or the website. Some of them take up a whole tab of their own, while others sit obviously and yet neatly around the outer edges or between the writing as you browse. It’s impossible to get away from it, and some of them pay handsomely just for the pleasure of being there.
Now, some require a commitment or purchase for Weedmaps to get its kickbacks, but this company has a hardened approach that doesn’t leave much room for error, and the majority of its advertisers pay a lot of money to take up a small portion of the site because it has such a high number of daily visitors which translates to guaranteed exposure. Even if they don’t make a sale right there and then, they’ve burrowed their way into your mind, and that alone is worth a fair payout these days.
Advertisers tend to consist of a variety of different types of cannabis businesses, but listings are exclusive because they are only offered to retail stores. Dispensary listings are a hot commodity, especially with so few alternative opportunities to get the word out about these green businesses, and Weedmaps sells this luxury for a pretty penny.
Some reports have pegged dispensary listings as worth anywhere from $5,000 to $15,000 per month, depending on the ranking, with lower-paying shops showing up at the very bottom of the list. When you look at the global coverage of Weedmaps along with those prices and then multiply the figures by the thousands of dispensaries that pay for the privilege of showing up on an interactive map and hosting an online menu, it’s really no wonder the company has been so successful.
Will dropping the black market hurt?
Weedmaps has gone public, and to do it, the company needed to cut ties with the illicit industry for good, a move that cost millions in the beginning, but it also opened the door for new and exciting opportunities on the legal scene that would never have otherwise been possible. So, while yes, the adjustment period will be painful, this long-running cannabis business is going to come out on the other side of all this better and stronger than ever before.
In the future, anything is possible
Now that Weedmaps is a legitimate, verified company, it can do almost anything, branching out into any part of the cannabis sector. We aren’t sure what’s next for this online giant, as in the future, anything is possible, but one thing is certain, and it’s that Weedmaps is well on its way to earning trust from those who work within the legal cannabis industry. Bigger and better things are on the horizon, and Weedmaps advertising is likely only the beginning of what will be an epic journey towards greatness.