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spk01: And welcome to today's Leafly first quarter 2022 earnings call. My name is Bailey and I will be your moderator for today's call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you would like to ask a question, please press star followed by one on your telephone keypad. I would now like to pass the conference over to Keenan Zoff with the Blue Shirt Group. Keenan, please go ahead.
spk05: Good afternoon and welcome to Leafly's first quarter 2022 earnings call. We will be discussing results announced in our press release issued today. With me are Leafly CEO Yoko Miyashita and CFO Suresh Krishnaswamy. Today's call will contain forward-looking statements which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements regarding the services offered by Leafly, the markets in which Leafly operates, business strategies, performance metrics, industry environment, potential growth opportunities, and Leafly's projected future results and financial outlook, and can be identified by words such as expect, anticipate, intend, plan, believe, seek, or will. These statements reflect our views as of today only and should not be relied upon as representing our views at any subsequent date, and we do not undertake any duty to update these statements. Forward-looking statements by their nature address matters that are subject to risks and uncertainties that can cause actual results to differ maturely from expectations. For discussion of the material risk and other important factors that could affect our actual results, please refer to the risk discussed in today's press release, our annual report on Form 10-K filed with the SEC on March 31, 2022, and our other periodic filings with the SEC. During the call, we will also discuss non-GAAP financial measures, which are not prepared in accordance with generally accepted accounting principles. A reconciliation of the GAAP and non-GAAP results is included in our earnings press release, which has been filed with the SEC and is also available on our website, investor.leapley.com. With that, let me turn the call over to Yoga.
spk00: Thank you, Kenan. And hello to everyone who has joined today's call. It is a great time to be in cannabis. Before I get into sharing some of the exciting progress we've made over the last quarter, I want to recognize the momentum we are seeing in the industry and what it means for Leafly. Over the past several months across North America, we've seen a buildup to the opening of important recreational markets in New Jersey and New Mexico, with New York and Connecticut hinting at the potential to start rec sales in late 2022. We are still anticipating the expansion of recreational licenses in Illinois and Arizona. And in the heartland, work is gearing up for recreational youth ballot initiatives this fall from North Dakota to Missouri in a sign that legalization will continue to sweep the country. This is great for the industry, but also great for Leafly as we open new markets where we can easily scale our technology with few bespoke investments. And because of our content-driven marketplace, we already have a strong foothold across consumers in these markets and will continue to invest as they come online. Perhaps in the biggest nod to destigmatization I've seen, we also have the unique opportunity to ring the opening bell at NASDAQ on 420, the unofficial but widely celebrated cannabis holiday. In tandem with this industry momentum, Leafly had a solid start to 2022. Revenue for Q1 was $11.4 million, an increase of 21% year over year and in line with our expectations. This growth is a testament to our powerful name recognition and the growth we can drive with investment in the Leafly team and platform. and with our continued focus on building tools that provide outstanding ROI for our customers and a best-in-class shopping experience for consumers. We saw a 37% increase in the number of retail accounts in Q1 year-over-year, and our retail subscriber funnel remains strong. On a consecutive quarter basis, ending retail accounts grew 3%, reflecting elevated churn in challenging markets like Oklahoma and California and a higher-than-average number of out-of-business accounts. As we've fully transitioned our sales organization in Q1 to a regionalized model, our expanded sales capacity allows us to focus targeted efforts on reducing churn. Our top of funnel retailer acquisition remains strong and we are positioned well to quickly bring retailers onto our platform, especially in markets that are scaling and in existing markets where license numbers are poised to expand. The cannabis industry operates at a local market level, and our strategies and investments reflect this. When we look across the business, average revenue per retail account, or ARPA, varies from market to market. In some of our key and most highly penetrated markets, we are seeing steady ARPA growth. Newer markets with lower retail penetration on the Leafly platform provide significant opportunity to build up over time. As I mentioned last quarter, our strategy in these markets is to enter at lower price points, expand retail penetration, and drive higher spend from retailers over time. Given the mix of local markets across our platform and our strategic approach, we saw a slight and expected sequential decline in ARPA in Q1. Over time, as we invest in these markets, we are effective at increasing ARPA. We know that pricing power comes through our ability to bring as many retailers in a market onto our platform, and we'll continue to focus on improving penetration at the local level through our regional sales and CSM teams. Leafly's consumer strategy differentiates us from others in the market and has led to making cannabis more mainstream. Over the years, we've educated consumers and increased visibility across the industry before anyone else was publishing about cannabis at scale. With the momentum in cannabis today, we see traditional media publishers introducing more coverage around cannabis, which has helped solidify cannabis' move into the mainstream. That's positive for cannabis, and it has had a direct impact on our SEO traffic, specifically around our top-of-funnel news and learn sections. As a result, we ended the quarter with approximately 7.7 million monthly active users, a drop over Q1 last year. Importantly, our revenue strategy is not dependent on this top of funnel traffic. We maintained and in some markets grew traffic to sections of the platform that generate the greatest value in consumer engagement for our retail and brand partners. Top-of-funnel traffic remains important to our business, but in the short term, we will continue to optimize our strategy for revenue-generating traffic and prioritize markets, and in the long term, continue to invest in growing top-of-funnel traffic with unique and elevated cannabis content and differentiated consumer experiences. As we discussed during our first earnings call following the closing of our business combination with Merida Merger Core, we continue to make meaningful investments that we expect will have future positive impacts as we take a purposeful and disciplined approach to drive both short-term and long-term growth. Leafly's growth and success will be driven by investments in a few key areas. One, increasing our subscriber base across retail and brand accounts. Two, improving our advertising platform. Three, reducing friction and enhancing our offerings to our B2B partners. And four, creating an incredible consumer shopping experience. I'll touch first on increasing our subscriber base. The number of our retail and brand subscribers continues to grow. These subscriptions represent recurring revenue streams and position us well to move customers up the ARCA curve as we introduce new ad products to these accounts in Q2 and Q3. One of the most exciting areas of growth is in our new offerings for brands. Brands are realizing the power of Leafly to obtain high-value and high-intent customers. In Q1, the number of brand advertisers on our platform increased by 135% year over year. Although we are in the early stages of building out this customer segment, we are already working with top brands across THC-infused, other cannabinoid providers, and ancillary products. We are pleased with our progress in acquiring new brand advertisers and see this segment as a tremendous growth opportunity with a large untapped TAM. We've added team members to aggressively go after this market, including hiring an account director for brand sales. And with our revamped brand subscription product, now have a strong product that delivers real value for our brand partners. Moving on to improving our advertising platform. Our advertising platform continues to mature. As the overall industry grows and becomes more established, retailers and brands are experiencing increased competition to reach customers. We are continuing to invest in new advertising products and services that put retailers and brands in the driver's seat. as they seek to get in front of consumers in an efficient way. And we are excited to announce releases in the second half of this year. We introduced more automated bidding tools earlier this year, creating efficiencies as we moved away from a manual, more labor-intensive process. We are early in the stages, but we have already seen steady and strong growth in ad revenue in markets where we have introduced bidding tools. We are focused on scaling bidding capabilities in Q2 and expect continued growth ahead. One of the keys to maintaining trust with our customers is providing transparency about the performance of ad units subject to bidding. We are providing this data to customers through the bidding process, empowering our best partners to make informed decisions about customer acquisition spend. And by opening up premium ad units to bidding, we've been able to give more partners greater access to high-value placements that they might not have had access to previously. Let's talk about reducing friction for our B2B partners. The cannabis industry remains an industry full of friction and fragmentation for retailers and brands, particularly in the technology enablement space. We are working on both reducing that friction in our own environment and reducing it through building tools and services for our B2B partners. Our strategy revolves around empowering retailers to run their best businesses by integrating with their existing systems rather than forcing them into a closed technology environment. This reduces the barrier of entry to working with weekly and helps drive a simpler client experience with greater ROI as licensed retailers and brands can more easily leverage our traffic, proprietary insights, and our technology for customer acquisition, e-commerce, and digital advertising solutions. Some of the features we launched in Q1 include a business dashboard which allows clients instant access to ROI metrics and best-in-class insights so they can regularly see the value they are getting from Leafly. We also introduced Smart Tools, a collection of best practices that retailers can use to improve their performance on our platform. We continue to invest in our deals engine, which drives increased consumer activation when retailers offer consumer deals and discounts. and will soon exceed over 50 menu and order integrations with POS providers that power two-thirds of the menus on Leafly today. We'll continue to emphasize putting cannabis retailers and brands in control of their businesses through access to data and practical tools and tips to attract consumers on our platform. Looking ahead, we expect our sales and customer success teams to drive increased adoption of the platform tools we offer, including order-enabled capabilities and advertising add-ons. All of what I just spoke about inherently leads to creating an unmatched consumer shopping experience. Leafly is the informed way to shop for weed. Users turn to us for our long history, unmatched strain and dispensary reviews, research, and trusted expertise. We can offer a more informed shopping experience from beginning to end by helping consumers understand what they should try and where to buy and connecting them easily with local dispensaries that offer the products they want. Our focus in 2022 is utilizing our unrivaled proprietary content and data from the past 12 years to provide a level of curation and personalization that increases the value proposition for consumers and ultimately produces greater ROI for retailers and brands. You can see this come to life in our recently launched strain quiz, which leverages the data underlying our strains database in a short quiz to match consumers to the strains that deliver the feelings and experience they are looking for, then connect consumers to the stores that offer products with those strains. There is no place where we have more control over our consumer experience than in native apps. Our native app opportunity changed fundamentally late last year when Apple allowed for ordering in the iOS app. Growing our account base through investment in our native app is a priority growth factor for us in 2022 and beyond. To continue this theme of end-to-end experience, in Q1, we introduced a new consumer-facing delivery experience to augment our existing strong pickup offering, giving consumers an additional way to shop for cannabis in the way they want. And we are already seeing good results, particularly in California. We are in the midst of hyper-local marketing efforts in Los Angeles, the largest legal cannabis market in North America, to drive increased adoption of our full suite of consumer-facing products, including our new and improved Delivery Gateway. We remain the trusted source for cannabis information and insights across a wide spectrum of audiences, from media and lawmakers to regulators and the general public. Bolstered by our own editorial content, we've appeared across dozens of mainstream media outlets over the past quarter and consistently lead on share of voice as we not only provide color and context to the topic of cannabis and legalization, but also work to destigmatize and normalize its use. This elevated brand recognition is earned at a very low cost and helps heighten awareness and affinity for the Leafly brand. I say it often, I am pleased with what our teams have been able to accomplish this quarter and excited by the prospects for Leafly ahead as we continue to invest in areas that will have real and positive impacts on our business. With that, I'll now turn it over to Suresh.
spk02: Thank you, Yoko, and welcome, everyone. Our first quarter results were in line with our expectations and set the foundation for the accelerated growth we expect to see in the second half of the year. As we detailed in our Q4 call in March, 2022 is a year of continued investment in the business. We've been expanding the sales team to allow us to execute our market by market strategy of building our customer base. In addition, we're growing our product and engineering team to make further improvements to our platform that enhance the consumer experience and provide a strong ROI for our retailer and plan customers. Now let me review the Q1 results. Revenue for the first quarter was $11.4 million. representing a year-over-year increase of 21%. Retail revenue of $9.2 million grew 17% year-over-year, while brands revenue of $2.2 million grew 35% over Q1 of 2021. The growth in overall revenue was driven by both increases in subscribers and ad products, which includes our new sponsored ad product, as well as continued success with our auction bidding product. We also grew new subscribers. The number of ending retail accounts grew 37% year-over-year to 5,422. On a consecutive quarter basis, our ending retail accounts grew 3%. As Yoko touched on earlier, we saw higher churn in markets like California and Oklahoma, which have regulatory and license challenges. With a newly organized sales team structured by regions, we're now more nimble to address market-specific dynamics at the local level. Our strategy to build out subscribers in under-penetrated markets contributed to a lower average revenue per account, or ARPA, of $576, a decline of 109 from Q1 of 21. Keep in mind, this is an aggregate across all markets with a very wide range between the low and high end. In markets with greater penetration, ARPA is significantly higher than our average. As Yoko mentioned, our strategy in new or under-penetrated markets is to build our market presence by offering competitively priced entry-level products. Over time, as these markets pass through their development phase, competition increases. When markets reach a higher level of demand from consumers and we achieve strong penetration, we can introduce ad bidding to retail and brand subscribers and drive ARPA higher. We view our bidding product and, more broadly, our ability to build advertising placements that allow for retailers and brands to compete for consumers on Leafly as a key driver for growth. We rolled out bidding for limited ad placements on Leafly in five states in Q1. And we've seen healthy increases in ad placement revenue. For the balance of the year, we do expect overall ARPA to rise from current levels. And we're excited about our growth in brand subscribers, a growing recurring revenue stream from a new customer base. The number of brands advertising on our platform at the end of Q1 increased 135% year over year and 19% on a consecutive quarter basis. turning to gross margin. Leafly is asset light with a proven scaling business model and strong gross margins. Total gross margin in the first quarter was 87%, a decline of 100 basis points from Q1 of 2021, primarily driven by higher business platform and website infrastructure costs. The investments that we're making in the business now are putting pressure on gross margins over the next two quarters. As top-line revenue continues to grow, we expect margin improvement. Moving on to operating expenses. Starting in the second half of 2021 and continuing into 2022, we've been investing in the business for long-term growth. These investments are primarily focused on platform, product development, and sales and marketing. We continue to make investments in top talent in order to take our company's growth to the next levels. In December of 2021, we brought on our new SVP of sales, Rebecca Warner, a seasoned executive from Zillow. Since her arrival, we've restructured our sales teams to move to a more regionalized sales model. This new structure allows us to go after local markets in a highly intentional way. Our focus on local markets will help us remain highly relevant and competitive. In January, we added an SVP of engineering, Jeff Oberlander, formerly of Pipeline, a sales CRM software company. Under his leadership, we've moved to an org structure that operates with greater efficiency and allows us to develop and deploy product enhancements in a more streamlined fashion. Both sales and engineering are making progress in growing their teams. Year over year, we more than doubled the size of our sales and marketing org. We also added to our engineering and leadership teams. Additional expense related to headcount is the primary driver behind the increase in operating expenses. With the changes we're making internally to our engineering team, we expect increased throughput on upgrades and new product releases, which will scale, providing operating leverage over time. Total operating expenses in the first quarter were $17.4 million, an increase of 83% over $9.5 million in Q1 of 2021. G&A expenses were up $4.4 million in Q1, which includes $1.9 million of stock-based compensation expenses, as well as the increased costs of operating as a public company. Total operating loss for the first quarter was $7.4 million. Total adjusted EBITDA for the first quarter was negative $5.4 million. As we laid out on our Q4 call and our analyst day last October, 2022 is a year of investment for Leafly. With the completion of the D-SPAC process and capital available on our balance sheet, we'll be investing in both people and product to push Leafly to the next phase of growth. Now turning to the balance sheet. We ended the quarter with $35.4 million in cash. Our restricted cash balance at the end of Q1 was $37.2 million. Since the close of the quarter, we amended the forward share purchase agreements that we entered into prior to the merger closing. We modified both the pricing and expiration date of all four of those SPAs. More details are available in the 8K we filed on May 4th. It's important to note that these revised agreements have been extended to August 1st. In addition, some of the holders have sold a portion of the shares into the open market. As a result, approximately $7.3 million of cash in escrow has been or will be moved into our cash balance. Moving to our 2022 guidance. For the full year 2022, we are reiterating our guidance for revenue between 53 million and 58 million, representing 29% growth over 2021 at the midpoint. As a reminder, this guidance does not factor in any new markets that have not begun legalized sales. We expect adjusted EBITDA loss to be between 31 million and 26 million. As a reminder, our plan is to provide full-year guidance along with additional color and transparency throughout the year as to how we're tracking. Q2 is off to a good start, and we expect an acceleration of top-line year-over-year growth in the second half of 2022. In closing, we've started off this year as planned and are pleased with the investments we're making in the platform, product development, and sales and marketing. These investments will help us bring a best-in-class offering to our consumers, retailers and brands. With the first month of Q2 behind us, we see great opportunity for Leafly to accelerate growth in the second half of 2022. And with that, I'll turn the call over to our operator and open it up for questions. Thank you.
spk01: Thank you. If you would like to ask a question, please press star followed by one on your telephone keypad. If for any reason you would like to remove that question, please press star followed by two. As a reminder, if you are using a speakerphone, please remember to pick up your handset before asking your question. The first question today comes from Jason Hellstein from Oppenheimer. Jason, please go ahead. Your line is now open.
spk04: Hi, thanks. Steve here for Jason. So first question, just how are you guys thinking about retail accounts for the next few quarters? Just wanted to get a sense on that. And also, secondarily, kind of on the macro picture, just if you can give us a sense on your progress of getting licensed dispensaries from states like New York and New Jersey onto the platform. Just kind of what have you seen in terms of progress in that regard and anything you can give to us on that. Thank you.
spk00: You bet. Trish, you want to take retail accounts? And I'm happy to speak to the macro.
spk02: Yeah, absolutely. So on retail accounts, we had good growth in Q4, and we're confident in our ability to continue to add retailers onto our platform. As Yoko mentioned, we had challenges in Q1, both in Oklahoma and California, related to licenses and regulation. We also saw a higher than expected number of accounts going out of business. You know, cannabis is dynamic. We do see turnover in licenses. And in many cases, we see the new licensees come back to the platform eventually. So with our new sales reorg in place, we're in a good position to focus on the value we're providing at the local level. And with our local market strategy, we're really focused on adding accounts and providing value within each local market that we serve.
spk00: Let me pick up on your macro point. East Coast markets opening up, super exciting. 421 New Jersey rec markets open. Let me take these state by state. New Jersey, as you know, gave priority to existing medical licensees for first recreational sales, and they've yet to issue new licenses for new recreational stores. So just some context on New Jersey. We are 91% penetrated across existing medical retailers today. So that's a market share that we've already captured as it pertains to current retail sales. Similar dynamic in New York, where we have over 90-plus percent penetration of existing medical dispensaries. And as you know, that market has made some announcements over the last quarter around how their retail stores will open up with initial priority given to social equity licensees. Those licenses have yet to be issued. But with our local market sales teams, we are at the ready when those new licenses are issued to bring those players on the platform.
spk04: Great. Thank you very much.
spk01: Thanks, Steve. Thank you. The next question today comes from Harrison Vivas from Cowan. Harrison, please go ahead.
spk05: Good. Thanks so much for taking the question. First off, can you maybe highlight some of the markets where you feel you're most underpenetrated in and kind of discuss the opportunity for account growth in those markets?
spk00: Yeah, I'll take the biggest one that presents a really fantastic opportunity for us, California. You know, we haven't reached full market penetration as where we'd like to be. And one of the things that we're super excited about as it relates to California, not only the fact that it's the largest cannabis market in the world, but our delivery gateway that we launched this in Q1 of this year actually really is additive to our existing strong pickup offering. Why is that important? Because California is such a delivery-driven marketplace. So to introduce this new consumer interface, and the UI is qualitatively different for delivery versus pickup, and bring that to a market where we know there's still a lot of demand. How do we know that? Because there are a lot of consumers from California coming to our site and searching strains, for example. We see that as, notwithstanding some market structural challenges, which we think will right themselves over time, a great opportunity for us to go after them.
spk05: Great, I appreciate that. And then you also talked about seeing ARPA growth in nation markets over time. So can you kind of quantify how you, the trajectory of that growth, kind of how much growth you can expect to see from nation markets and how that relates kind of to the overall pressure that you see in ARPA as you enter new markets? Thanks.
spk00: Can we take over? I think, let me just make sure I cover all of that. Trajectory of growth in nascent markets and sort of percentage growth. I can't give you percentage growth as it relates to specific markets. That's not something that we've gone deeper into in terms of disclosing. But let's talk about what drives this and what sets us up to be able to drive ARPA growth over time. Our flywheel starts with supplier penetration. So what you'll see us do and where you see, you know, we report ARPA at the aggregate level, is going into markets and focusing on that supplier penetration. And sometimes that means you're going in at lower ARPA rates. But what we see over time is that when you can get to that sweet spot of supplier penetration, and, you know, that's a 70% and 80% roughly, and that differs from market to market. But when you can reach those kinds of levels, You match that with the consumer demand. What we do see is, as Suresh's point, this steady growth over time. And I know that's hard to show in our numbers in the aggregate, but I would point to just key areas in the strategic decisions we make on how to achieve that supplier penetration to grow those markets. Illinois is a great example for us where we saw some challenges with getting suppliers on the platform about 18 months ago. And, you know, that was really because a lot of those retailers wanted menus that they were already powering using Jane to auto-populate onto Leafly. So what did we do? We did an integration with Jane, increased supplier penetration, have been able to drive healthy ARPA growth. And let's talk about that ARPA growth. Where does it start? You bring them on the platform with the subscriptions. And then when you can build that competitive dynamic that arises when you have sufficient suppliers on the platform, it's introducing bidding. And as Suresh mentioned in his commentary, we've seen healthy ARPA increases through bidding that we've launched in Q1. We'll continue to proliferate bidding across our platform in markets where the dynamics are right to do so.
spk05: Great. I appreciate the comment. Thanks.
spk01: Thank you. As a reminder, if you would like to ask a question, please press star followed by one on your telephone keypad. The next question today comes from Eric Delorier from Craig Hallam Capital Group. Eric, please go ahead. Your line is now open.
spk03: Thank you for taking my questions. First one for me. You mentioned that you guys sort of prioritize high-revenue traffic channels, and thus MAU is not necessarily a leading driver of your results or anything like that. Could you just provide a bit more color on what you mean by sort of prioritizing high-revenue traffic channels and how you can focus on driving those versus others? Thanks.
spk00: Yeah. So I think, you know, let's talk about MAU and let's put it in context. Mount is a measure across the top funnel, but we're also looking at these other metrics and performance indicators. And traditionally, we looked at the top of funnel through our news and learn section in SEO. We did that because not a lot of publishers were publishing around Canvas at scale. What we're seeing now is that mainstream media is stepping in to do the work that we've had to do for the past decade. But what we're also focused on is, to your point, it's the efficiency of moving traffic on our platform through the funnel. and to deliver the greatest value to our B2B partners. How do we do that? That's making sure traffic gets to retailer menus. It's making sure it gets to our dispensary finder, as well as our pickup and delivery gateways. So when you're thinking about and what to look for from us, we're going to focus, we'll continue to focus on delivering that value to our B2B partners, emphasizing growth at top of funnel. And that includes through SEO investments, But really, it's this emphasis on differentiated content and consumer experiences to attract direct traffic. Let me just pull on that thread a little more. Those sticky consumer experiences reduce our reliance on SEO over time and are truly valuable to our retail and brand partners. What gives us confidence that this is the right strategy going forward is that even with the declines you're seeing in top of funnel now, we didn't see a one-to-one decline in orders in GMV over the quarter. So like long-term expect us, we'll still continue to invest in top of funnel, but we'll be purposeful and mindful on spend and how we drive that funnel.
spk03: Okay. That's very helpful. And then second one for me, I was wondering if you could just expand on your bidding initiatives here. I know that, you know, that, that was a manual process here and, I think you mentioned that you guys were sort of converting that to an automated process, but just wondering if you could expand on that a bit for me. And then I know that this is sort of, you know, that bidding is a, you know, sort of later stage tool that you guys use, you know, after penetration has really increased and whatnot, but any indication on sort of how to expect the pace of potentially automated bidding rollout would be great too. Thank you.
spk00: Yeah, I'm super excited about the progress our product and engineering team has enabled on the automation side. And what I'm happy to report is that interface between us and the retailers is fully automated now. What does that mean? They're getting alerts. They're popping in their bid. They're popping in their max bid. They're getting notifications when they've been outbid. And we see this flurry of activity on the platform right before the bidding period expires. So that part of it is now automated. And that's huge in terms of think about the human hours that are no longer on the phones taking calls as we're closing in on the last minute bids. And we're seeing great turnover in those spots. And we're seeing actually I was going to try to get through this without the coughing, so I apologize. So we're seeing the increased activation at the very last minute leveraging the automated tools. The last remaining piece of automation for that is to pull all of this through automation and billing. But, you know, that will be secondary because it's really focused on reducing that friction and making bidding easy for our B2B partners. You will continue to see this. As we said, this is market by market looking for optimal conditions both from supplier to and making sure there are sufficient retailers on platform and looking at sort of that general activity and consumer activity and interest in a particular market. But that's a continued focus throughout the year, and you'll see that built into our projections.
spk03: Okay, great. I appreciate that, Clara, as well. And then just last one for me here, just kind of clarifying, is bidding only for retail accounts or is that something brands can access as well? Just a quick clarification there, and that's it for me. Thank you.
spk00: Yeah, currently bidding is focused on retailers, and again, that's a function of aggregating sufficient retailers in a market onto our platform to drive that competitive dynamic. It's really early stages for us with brands, but we're very pleased with the progress to date. The technology will allow us to introduce that to brands when the time is right.
spk01: Thank you.
spk00: Thank you, Eric.
spk01: Thank you. There are no additional questions waiting at this time. So that concludes the Leafly First Quarter 2022 earnings call. Thank you for your participation. You may now disconnect your lines.
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