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The subsidiary of LC Luxuries Limited is in advanced talks with the 'Yelp for pot' site
Disclaimer: The following article contains obnoxious pot puns.
WeedMaps may have a new backer. The pot-themed social network may soon be acquired by US Cannabis, a subsidiary of LC Luxuries Limited.
The company has entered into formal negotiations to acquire the WeedMaps.com domain name, as well as the current operating Web site, according to release. “Weedmaps.com is a perfect fit for our growth model. They have structured an exciting template which, we believe, will expand our internet presence in the cannabis industry," said Douglas Francis, CEO of LC Luxuries Limited and US Cannabis, in the release.
The announcement comes on the heels of Tim Draper’s (of Draper Fisher Jurvetson) decision not to invest in WeedMaps last week.
"We sought out Tim Draper because he is a self-proclaimed libertarian and his prominence in the investment world would have meant 'instant credibility,'" said WeedMaps co-founder Justin Hartfield via email. "However, we are more than ready to earn our credibility the old-fashioned American way: self-promotion, and being publicly owned is one way to do that."
With 43,000 users and 1,500 medical marijuana dispensaries, the California-based startup has grown rapidly since its July 2008 founding. it's already generated more than $1 million since kicking off monetization just six months ago. In March 2009, Hartfield claimed that the company was experiencing a 48% growth rate each month. The site saw a 35% surge in traffic when US Attorney General Eric Holder announced in spring 2009 that the federal government would no longer be raiding medical marijuana dispensaries.
The company’s business model operates by charging dispensaries to post their menu items on the Web site, and businesses pay between $195 and $395 per month to post their items on the site’s WeedMenu. The AJAX interface WeedMenu is currently tracking 15,703 items spread out among 630 dispensaries and categorized according to product type, including edibles and concentrates.
The site, which has been called a “Yelp for pot,” allows medical marijuana patients to connect with other patients in their area to review and discuss dispensaries, delivery services, and cannabis cooperatives. And like Yelp, it provides a map of the nearest marijuana dispensary locations. As it turns out, though, Yelp already offers reviews of local cannabis clubs, but WeedMaps has been looking into a buyer’s club that will feature discounts at certain dispensaries for a subscription fee.
When pot goes legit
With California looking more and more like it is going in the direction of legalizing marijuana for recreational use, the company expects continued growth. California’s Prop 19, which seeks to legalize marijuana, will be put to vote in November, and current polls show that voters in favor of prop 19 currently lead those opposed to it 47% to 43%. If Prop 19 is shot down, Hartfield is confident that a similar initiative will be proposed and passed in the next two years. Nevertheless, WeedMaps intends to introduce WeedVote.com on October 1st to support Prop 19.
"We are strong supporters of the complete legalization of marijuana and WeedMaps is an inherently political business, so being in a publically-owned company increases our chances of being heard," Hartfield told me.
While California remains its primary demographic, 25% of WeedMaps’ revenue comes from out of the state. In addition to California, WeedMaps serves Nevada, Michigan, Washington, Hawaii, Colorado, Alaska, New Mexico, Rhode Island, and Oregon. Nascent medical marijuana states Colorado and Nevada are providing most of the out-of-California revenue.
Details about the imminent merger have not been released. LC Luxuries Limited had been in the business of selling makeup, perfume, and other cosmetics, but after selling its makeup.com domain name, it is now said to be seeking other business opportunities.
With its massive growth rate and its established presence in the cannabis industry, WeedMaps and US Cannabis are poised to "smoke" the competition. Ha!
Image source: winbackyourlife.org
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