Marijuana e-commerce platform Leafly Holdings will transition to the over-the-counter market after being delisted from Nasdaq. The Nasdaq hearings panel determined Leafly failed to meet the required minimum of $500,000 in net income from operations. Leafly, which has a presence in Canada and Germany, announced its stock will stop trading on Nasdaq and begin trading on the OTC Pink Open Market under new ticker symbols.
According to an analysis from Stock Titan, the switch to the OTC Pink Market may result in less interest from institutional investors and make it more challenging for the company to raise capital. Leafly disclosed it had agreed to extend its debt’s maturity date from January 31 to July 1. The company plans to pay down 12.5% of the outstanding principal amount and accrued interest on the notes by January 21.
This is not the first time Leafly has faced issues with Nasdaq compliance. In January 2024, Leafly encountered a deficiency in its audit committee composition. In 2023, the company worked to address compliance regarding the Nasdaq requirement of a minimum bid price of $1 for listed equities.
Leafly shares traded 49% lower Thursday afternoon after the company announced it received the Nasdaq delisting notice.
Leafly transitions to OTC market
The delisting stems from the company’s failure to meet minimum financial requirements, including $500,000 in net income from continuing operations, as outlined in Nasdaq Listing Rule 5550(b).
Due to the delisting, trading of Leafly’s stock and warrants will be suspended starting January 17. The securities are expected to trade on the OTC Pink Open Market under the symbols “LFLY” and “LFLYW” on the same day. While this shift won’t impact the company’s operations, Leafly cautions that continued market trading of its securities is not guaranteed on over-the-counter markets or elsewhere.
Leafly (LFLY) has experienced a significant range in stock price over the past 52 weeks, with a high of $4.92 and a low of $0.70. On January 15, 2025, Leafly extended the maturity date of its 8.00% Convertible Senior Notes to July 1, 2025, while also introducing additional financial covenants. Leafly Holdings operates as a leading platform for cannabis consumers, offering tools to assist shoppers in making informed purchasing decisions.
The company also supports cannabis businesses with advertising and technology services. Leafly recently posted its Q3 results, indicating stabilization efforts amid the impending market transition. The company’s commitment to adjusting its financial strategies reflects a proactive approach to maintaining operational stability and investor confidence despite the challenges posed by the market shift.
The delisting marks a significant challenge for Leafly as it navigates the evolving landscape of the cannabis industry.
