In an investment landscape filled with opportunities, one could argue that no other emerging industry is as potentially lucrative as cannabis. Medicinal and recreational marijuana in the United States has seen an explosive rise in support over the past decade. As thousands of start-ups scramble to take their share of an uncharted market, it can be difficult for investors to decipher which businesses are legitimately prepared to live up to their claims. Investors need to remain vigilant as the cannabis industry continues to be forced through the hoops of changing government regulations and legal gray areas. Despite this, public support for legalized cannabis continues to rise in the United States – and eventually, the markets for legal cannabis businesses in the U.S. will likely expand across the entire country.
Of course, this newly emerging industry has a lot to offer both business owners and investors alike. Anyone who is successfully able to take hold of the market this early is likely to see some sky-high returns. While many businesses in the cannabis industry are focused on working with the plant itself, innovative companies can provide valuable services to the cannabis industry while removing themselves from handling cannabis. One of these companies is Leafbuyer Technologies Inc., (OTCQB: LBUY), a technology platform for the cannabis industry that can capitalize on the growing marijuana industry, while avoiding the troublesome legal issues faced by many traditional cannabis businesses.
The Orbitz Of Cannabis
Rather than working with the manufacture or distribution of cannabis itself, Leafbuyer.com is an online database platform that provides solutions to help dispensaries target consumers. Leafbuyer, launched in 2013, allows website users to search for their desired product, cannabis strains, menu items or competitive deals in the area while linking them to nearby dispensaries which, fulfill their specific request. Leafbuyer also provides deals, discounts, and loyalty rewards to consumers resulting in a steady flow of revenue and increased exposure for the dispensary. Leafbuyer operates like travel industry giants Orbitz and Priceline – a proven business model that benefits both consumers and providers. Leafbuyer was created to address a challenging problem specific to the cannabis industry and the company is answering the call.
Although cannabis is legal for either medical or recreational use in 29 states, it remains federally illegal, and many of the limitations placed on states where use is authorized suffer from this stigma. For example, dispensaries that want to advertise their product face local restrictions on signage and traditional media. Others encounter outright restrictions not allowing cannabis-related advertisements in their publications. Targeting this niche within the industry, Leafbuyer aims to be the perfect solution for cannabis vendors to safely advertise and reach key consumers.
Better Technology A Better Story
Leafbuyer recognizes it is not enough to provide a space that allows their clients to advertise. Instead, the company plans to take full advantage of the situation by functioning as an all-in-one advertising platform giving dispensaries powerful tools to maximize their profits and exposure. From the moment they sign up, clients are granted a digital presence on Leafbuyer.com – and the website's growing user base provides critical and valuable exposure. The LBUY network includes some of the cannabis industry's most viewed sites and publications, including Grasscity and The Voice Media Group, where LBUY's local deals and dispensary information are prominently displayed.
Leafbuyer.com itself reaches 700,000 visits per month, and the Leafbuyer Network reaches an impressively rising number of 8 million users in total.
For dispensaries struggling to spread the word of their business through conventional means, having store locations and deals listed through Leafbuyer provides an immediate boost to their local exposure. Additionally, LBUY also provides a monthly report of trends and analytics custom tailored to each client, helping them to maximize revenue. Finally, Leafbuyer offers full-service marketing and advertising services that form an A-Z solution. For profit, Leafbuyer generates its revenue through a recurring subscription model, in which vendors choose to subscribe to a competitively priced, regular fee, which offers different tiers of the company's offerings. Web banners, dispensary tour videos, print advertising in national magazines are among the many opportunities LBUY will tailor to clients.
LBUY Is Blazing A New Trail
Not only is the LBUY unique business model advantageous concerning current regulatory issues, but its natural design allows the company to benefit and grow as the industry expands. Moreover, investors who are still not privy to the impressive revenues already being generated by legal cannabis owe it to themselves to understand the massive opportunity the future will bring. Today, Leafbuyer may target 8,000 dispensaries and product manufacturers nationally. However, significant revenue opportunity also avails itself as LBUY begins to focus on the enormous market of complementary business opportunities throughout legalized jurisdictions. Thus, while the LBUY client base is already robust, the likelihood for exponential growth to the company’s client list is likely to continue as additional states adopt laws to legalize the use of recreational or medical cannabis.
According to recent studies, legal cannabis sales in the United States amassed over $5.4 billion in revenues during 2015, and this number jumped to nearly $10 billion in 2017. As additional states continue to legalize, current trends indicate that the legal cannabis market could potentially generate a whopping $21.8 billion in 2020. At the same time, the overall public perception of cannabis continues to evolve.
While marijuana was viewed in a negative light by the majority of Americans, recent studies of its medicinal applications have entirely revolutionized the way many think about cannabis. The product has seen increased interest and usage patterns by Americans of all ages and demographics. This movement continues to expand as innovation within the industry should improve the product's accessibility while discovering new medicinal applications.
LBUY Has Credibility In An Emerging Industry
Investors who have followed the cannabis industry since its initial boom may still be skeptical of new ventures since they are still recovering from the letdown of promising start-ups that never lived up to expectations. Whenever an industry as potentially lucrative as cannabis becomes available, it is inevitable that business owners will line up in an attempt to become the next big name in the market. Colorado's recreational legalization in 2012 for example, where hundreds of cannabis start-ups saw some steep rises in their stock's prices – many of which soon faded into obscurity, due to the many difficulties surrounding the industry at the time. However, this does not mean that a team of industry veterans and a well-led company is unable to find remarkable success.
On the contrary, as the cannabis industry has been allowed to expand over the years, many business leaders have gained invaluable experience and accrued the knowledge required to run a successful venture within an industry that is in transition. Leafbuyer is one of these companies equipped with an active management, possessing the business know how to direct the company to while becoming a market leader.
Leafbuyer is led by former Micron Technology Vice-President, Kurt Rossner, an entrepreneurial-success story who built and sold his start-up internet hosting business for over $15 million before focusing on LBUY. Leafbuyer's COO and Vice President of Business Development is Mark Breen, a former Sales Executive and Manager with CBS and NBC Networks won the Innovative Sales Award from CBS, as well as generated over $10 million in start-up business revenues. Mr. Breen oversees day to day operations, and in coordination with Mr. Rossner, Leafbuyer is prepared to make smart, quick, business decisions to develop their brand.
On the technical side of the business, CTO Mike Goerner runs the company's technology platform. After Mr. Goerner's experience as lead developer of the original MapQuest.com, he has since founded three highly successful Internet companies, with combined revenues reaching $125 million. Taking advantage of the decades-long experience of Goerner, LBUY’s online platform will encompass a technological framework that can adapt and evolve to whatever venture the evolving market requires.
LBUY's Client List Sparks Up
As of February 2018, LBUY has built an impressive user base exceeding 340 industry clients in Colorado, California, Washington, and Oregon. The company has currently has about 25% market penetration in Colorado and low single digits in other states – with plenty of room to grow. The growth in client base has contributed to a sharp rise in brand recognition and LBUY intends to leverage their growth in its most significant markets and aggressively push for a similar level of adoption in other states where and when use is permitted. Thanks to the scalable nature of the business model, Leafbuyer has detailed plans for future expansion. Currently, the company can generate approximately $400 monthly per location, earning these funds through dispensary listings and their texting-based customer loyalty program. However, Leafbuyer has several strategic business opportunities in the pipeline to expand the channels of revenue.
First, the company plans to roll out online ordering during the first half of 2018, a service that could differentiate Leafbuyer from its competition and secure considerable additional revenue. Second, the company is working to develop its product offerings through both acquisitions and partnerships. As the cannabis industry expands into more legal states, client growth will come naturally – and when combined with Leafbuyer's increase in product offerings, the company could see lucrative returns.
To take full advantage of the growing market, LBUY plans to allocate their budget toward aggressive sales expansion and marketing ventures. Should the current trends of LBUY growth continue to rise at the same pace, the company is looking at raising millions in 2018 and 2019 alone and because legalization will likely become a sweeping movement across the US, there is a good reason to believe that these numbers could soon skyrocket. In light of the trends, a prime area of interest for the company may get realized by rolling up smaller companies in the space and growing by acquisition in an industry that is getting fragmented with many small players.
Utilizing Blockchain To Create A Leafbuyer Advantage
Keeping the growth methodical and cutting-edge, LBUY has engaged Wunderkind LLC., to build a blockchain platform, integrating a secure peer-to-peer network or distributed ledger to verify and record transactions between individuals and Leafbuyer in real time. The implementation of blockchain technology is expected to enhance not only the offerings and efficiencies from LBUY, but will also serve to add protection and accountability for client transactions. Blockchain is going to be a vital tool in the company’s overall growth strategy and will become an integral part of the security and quality of transaction data on their network. As a value-added and differentiating competitive feature, the blockchain platform will likely become a significant driver of revenue by synchronizing the transaction loop for both the dispensary partners and the users of the Leafbuyer service. The known advantages from blockchain include having a secure and decentralized business environment where information and transaction data are verified and shared to a public ledger. These features keep transaction records safe, tamper-proof, while substantially decreasing the risk of fraud. The addition of this emerging platform may provide the critical competitive distinction for LBUY within the multi-billion cannabis industry that still faces strict regulatory scrutiny.
LBUY Offers A New Kind Of Service
For investors still skeptical about an online based cannabis listing service, take a look at Leafbuyer's similarly operating competitor, Weedmaps.
Founded in 2008, Weedmaps was one of the first businesses to enter the online dispensary listing space. Unlike Leafbuyer, the company instead functions similarly to Yelp, in which users can post reviews and information about local dispensaries. Having been an established business for more than a decade, Weedmaps is already enjoying annual revenues reaching $30 million, proving that the demand for online cannabis advertising and information websites are much needed. Leafbuyer's business model differs from Weedmaps in significant ways that make its platform original and strategically designed. Leafbuyer is working diligently to advance this originality and forward-thinking platform to become a top player in the industry.
LBUY: Lighting The Way For Exponential Growth
Overall, Leafbuyer is ideally positioned to capitalize on all aspects of the budding cannabis industry allowing users to find deals, jobs, and learn from information in a comprehensive and single platform. The company has a unique offering addressing a widespread marketing problem within the industry and LBUY expanding their offerings to meet the needs of an exponentially growing client base. Moreover, with rumors of large conglomerates sniffing around for opportunities in the sector, the timing for finding the right investment opportunities is more pressing than ever.
It may take a few years, but the cannabis market will only continue to develop and will provide significant business opportunities for growers and marketers alike. Unlike its competitors, Leafbuyer is building a broad platform of solutions for the cannabis industry that will not only drive significant value, but also take advantage of many industry opportunities that develop in time. With Leafbuyer currently trading at $1.83 a share, an investment now could potentially prove to be a wise early investment, earning a stake in a platform that may eventually become the premier online site for finding the best cannabis deals, comparisons, and distributors in the United States - and ultimately the world.
This article was originally featured on CNA Finance!
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.