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Online cannabis advertising platform and marketplace Leafly Holdings Inc. (NASDAQ: LFLY) quietly reported last week that it may be delisted from the Nasdaq exchange.

The Seattle-based firm received a delisting notice from Nasdaq staff on Oct. 4, according to an Oct. 10  in an 8-K filing with the U.S. Securities and Exchange Commission.

The company failed to meet Nasdaq’s requirement of $500,000 in net income from continuing operations in the most recent fiscal year or in two of the last three years. Leafly posted a $500,000 net loss in the fourth quarter of 2023 alone.

Delisting typically results in reduced access to public markets, which could make it more difficult and expensive for the company to raise funds in an industry that is already capital-deprived. It could also lead to thinning liquidity for shareholders and reduced visibility in the investment community.

Leafly requested a hearing, which could result in up to a 180-day extension. Its stock will continue to trade on Nasdaq during an appeal.

CEO Yoko Miyashita confirmed during the company’s latest earnings call that Leafly submitted a proposed compliance plan to Nasdaq in late May.

However, the company “received a plan denial and delisting determination letter” from the exchange last week.

“We are continuing to work with them and provide them updates on our progress to regain compliance with the applicable listing standards,” Miyashita said on the August call.

But the company’s been struggling for the past few years now. As of late, revenue continues to slide and retail accounts have fallen 32% over the year.

Miyashita said that payment delinquencies remain the largest segment of canceled customers, accounting for nearly 40% of monthly recurring revenue lost last quarter.

“Inability to pay remains a symptom of our capital-deprived industry, and we have implemented stricter controls to keep customers current,” she said. “We expect this pressure to continue until macro conditions improve.”

Leafly isn’t alone in its exchange troubles. Colombia-based Clever Leaves Holdings voluntarily delisted from Nasdaq in April, citing high compliance costs. Bright Green Corp. of New Mexico had its Nasdaq shares suspended in September after canceling an appeal hearing.

Leafly shuttered its news division last year, pivoting away from journalism to focus on being a consumer-oriented, brand-and-strain search platform. Management also gutted the company’s staff by nearly half by the end of 2023.

The company has been undertaking debt recovery efforts and stricter financial controls, but it still has $29.4 million in convertible notes due in January 2025, which it said it was discussing with lenders. Leafly reported $13.6 million in cash at the end of the second quarter, down slightly from the first.

As more cannabis operators face listing issues, some may decide to opt to over-the-counter markets in Canada or go private.

Analysts had expected some incremental improved performance  for the industry at large this year, especially with prospects of federal marijuana rescheduling. However, Viridian Capital Advisors’ so far found found a 4.5% decline in 2024 EBITDA estimates across 16 public cannabis companies.