With the progressive legalization of cannabis in the USA, eCommerce platforms are set to expand — offering opportunities for cannabis retailers. If at first, cannabis and eCommerce didn’t work in pair, the current demand for legal cannabis products (THC and CBD) have set a new dynamic for retailers. And despite a pandemic, the industry is set to create 340,000 jobs within the next 4 years.
With a market projected to reach $166 billion by 2025, there are plenty of opportunities for cannabis resellers to expand their products to new consumers. Today, retailers are starting to enjoy the benefits of eCommerce like any other business — and find new alleys for developing their brands to grow their revenues. Let’s understand how cannabis eCommerce has evolved recently from a legal perspective to the payment systems — and explore top eCommerce platforms for cannabis producers amid the pandemic.
The State of eCommerce in the Cannabis Industry
Even before COVID-19, eCommerce platforms for legal marijuana were already growing at a fast rate. In Canada, we saw the emergence of two licensed cannabis platforms, Tweed and CanniMed, selling their products over the leading merchant platform Shopify. Namaste, another giant name in legal cannabis selling premium TCH and CBD products, already had an established presence in Canada, the USA, the UK, and Australia.
In Canada and in the USA, Verda has set the ground for promoting legal cannabis products with a top delivery service. CanIDeal is another example of a platform that successfully made the most of cannabis eCommerce. Offering cannabis retailers the possibility to sell their products across the country, this platform provides all non-THC, and 0.3 CBD products are listed for sale throughout every state where recreational and medical marijuana is legal.
Eaze and Greenrush have been compared to Uber in their way of selling cannabis products to consumers. Working with local dispensaries, these two cannabis delivery services have helped retailers sell their products throughout the states, and consumers find the right products for them. With outstanding “weed-apps” and reliable customer and delivery services, Eaze and Greenrush have truly revolutionized eCommerce in the cannabis industry.
The Drivers and Obstacles for Cannabis eCommerce Retailers
As marijuana is legal in 33 states for recreational and medical use, this promising legal perspective has brought opportunities for cannabis retailers. As the Farm Bill legalized CBD extracted from the hemp plant, the entire CBD market has boomed, driven by high demand. Known its healing properties, CBD is the newest global wellness trend. From high-end luxury products to edibles, CBD is everywhere, as well as online.
Yet without the full legalization from a federal point of view, some challenges remain — for example, when dealing with bank and payment systems. As such, the legal cannabis industry has traditionally been cash-only since most banks operate on a federal level. Without the support of a bank, it’s hard for retailers to ask for a loan, claim a credit card, or manage a payroll to hire employees.
Plus, many online cannabis businesses require extra steps at checkout to secure each transaction and need confirmation of age and identity as well as phone verification for orders delivery. Today, new forms of cannabis payment solutions within the cannabis business slowly emerge, from cryptocurrency to eWallets and prepaid cards. PayPal was also seeking clearance for the federal state to approve the SAFE banking act as a decision to support the cannabis industry.
New Opportunities Arise in the Darkest Hour
COVID-19 has created significant opportunities for cannabis retailers, as stated by Steven d’Angelo, founder of Harborside, a top reseller in legal cannabis, based in California. Using the cannabis eCommerce platform Jane, the store reported a double in revenues straight after the burst of the pandemic, as well as a rise of online orders from 142% in just over a month. The demand for LeafLink has also progressed, with a 48% increase in orders.
Plus, as the WHO (World Health Organisation) believes COVID 19 can be spread over cash, new forms of payment for cannabis retailers start to be considered — since it’s recommended to handle payments through digital ways such as CB or mobile payments. CannaTrac is one promising eBanking solution for cannabis retailers to handle eCommerce transactions during the pandemic.
New chances arise for cannabis retailers with the pandemic as they can switch to an electronic payment form to handle deliveries or to complete online sales. The risk behind handling cash and the lack of proper banking solutions on a federal level create a new fertile ground for digital cannabis payments to arise — which will benefit eCommerce solutions in the cannabis industry.