2020 marked a true cannabis industry boom.
According to Leafly research, Americans spent $18.3 billion on cannabis products, 71-percent more than the $10.7 billion in sales the previous year.
But, if people couldn’t visit medical/recreational dispensaries and CBD shops last year, how did cannabis product sales skyrocket? With just two words: eCommerce migration.
As homebound living set the nation on an overstock frenzy, stressed-out Americans turned to their legal green dealers’ websites, spending 33-percent more per month on average than in 2019.
Not to mention, four states — Arizona, New Mexico, New Jersey, and Montana — legalized marijuana for recreational use, and multiple others passed laws that legalized hemp-sourced CBD.
In a nutshell, the cannabis industry’s shift to eCommerce was the true spark of growth it needed last year.
If you’re thinking about migrating your cannabis-related businesses, here are some things to consider to help ensure your shift to an eCommerce platform is seamless, relevant, and, most importantly, legal.
6 considerations for selling CBD products online
Understanding the two types of CBD
CBD can be sourced from two plants: cannabis and hemp.
Both cannabis and hemp-sourced CBD are popular across the world, but certain states still prohibit manufacturing and selling it.
Cannabis-based CBD is grown on the same plant as THC and is known for having higher levels of THC and lower levels of CBD when compared to hemp-based CBD.
With the passing of the 2018 farm bill, hemp was no longer classified as a Schedule I controlled substance. In fact, it actually legalized hemp as an agricultural commodity.
Ultimately, CBD is CBD, no matter where it comes from. The difference in plant sourcing has little impact on the end product’s potency or quality.
Now, there are strict laws in place regarding the manufacturing and sale of hemp products in the US.
Know the specific CBD laws and restrictions in each state
Learning how to sell CBD online doesn’t take a botany degree, but it does take time and patience.
Due to the ever-changing laws and regulations in individual states surrounding the sale and purchase of CBD products, a CBD brand could sell its products in Texas and Louisiana, but not Idaho or Nebraska. Yet, some sources of CBD are legal in California and Oregon, but not Texas, either.
As of 2021, the following states permit the consumption and distribution of almost every type of CBD:
- Alaska
- California
- Colorado
- District of Columbia
- Illinois
- Maine
- Massachusetts
- Michigan
- Nevada
- Oregon
- Vermont
- Washington
As of 2021, it is illegal to consume or distribute marijuana-sourced CBD products in:
- Indiana
- Kansas
- Kentucky
- Mississippi
- North Carolina
- South Carolina
- South Dakota
- Tennessee
- Texas
Only three states have restricted all types of CBD:
- Idaho
- Nebraska
- South Dakota
When it comes to percentage laws in the U.S. Hemp-based CBD cannot contain more than 0.3% THC. Cannabis plants with a higher concentration than 0.3% are automatically considered marijuana plants and would be subject to more scrutiny and higher fees.
While the sale of hemp-based CBD is legal in multiple states, many still don’t allow disclosure of pricing information or placing orders online or over the phone.
View more information on your state’s laws regarding CBD sales here.
Decide which platform you’re going to use and build your site
Deciding which platform to use is essential to a successful eCommerce migration – especially if you want customers to buy your products.
The platforms below were selected for various purposes – all depending on what your online CBD business is looking to accomplish.
- Squarespace: Perfect for a cannabis startup that has a limited budget. However, with limited budgets, comes limited plans and even more limits on visibility.
- WordPress: Best for medium-sized cannabis merchants who can afford to hire a developer to customize the webspace. Best to use when building a company around CBD products that will act as more a resource, news source, or media outlet.
- Shopify: Best for medium-to-large cannabis merchants who want a hosted experience. Until 2020, Shopify placed strong limitations on CBD and Hemp product-based stores. Their payment systems, which placed strict banking regulations on cannabis companies, would not accept payment. As the CBD industry exploded, Shopify partnered with various payment gateways to offer payment options that scaled with hemp-derived CBD businesses.
- Magento or WooCommerce: Best for larger cannabis and CBD merchants with budgets in place to nurture customers. These are both open-source platforms that allow sellers to choose their 3rd party tools and payment gateways.
Both offer multiple gateway options that specialize in working with high-risk products like CBD. This distinction makes these platforms the safest and most secure ways to pay.
You can hire a web developer to make sure it’s aesthetically pleasing, content-rich, easy to navigate, and mobile-friendly. This will encourage your customers and provide them with confidence when purchasing products from your business.
Lean into online ordering and pick-up trends
Moving dispensaries online allowed curious customers to order cannabis and CBD products in droves. According to Clearsale, the industry shift to eCommerce increased revenue by 130-percent from January to December 2020.
The cannabis and CBD industry transition to eCommerce has changed the way dispensaries conduct business. The new standard of business is now focused almost exclusively on providing in-store or curbside pickup options.
Many users are enjoying the benefits of skipping the line and feeling the healing effects of CBD, faster, and the chances for success are growing by the day.
Better yet – some companies like Eaze and Greenrush have introduced cannabis to the delivery service space in cities across the U.S.
Determine terms of payment and/or shipping
Due to strict banking regulations, cannabis and CBD have often been cash-only businesses. Depending on the state you live in, your eCommerce platform may or may not consider the following:
- eWallets
- Prepaid gift cards
- Pay in-person
- Credit/debit card
There are a number of banks and card companies that work with cannabis and CBD online businesses. However, banks consider these merchants high risk businesses, raising their processing fees and costing your business more in the long run.
Ensure complete transparency with products
Customers want to make informed decisions, especially when it comes to trying something like CBD for the first time.
Transparency is key when establishing your online CBD business. When selling your products online, be sure to list all information clearly. This includes USDA badges, batch numbers, production dates, and strain names.
Typically, they have multiple questions about how individual products – oils, tinctures, lotions, etc. – and are better served by an in-person associate.
But things are a bit different with an eCommerce-based CBD company. A key way to ensure quality and learn more about the various CBD products is to have a budtender available via chat or video call.
This personal touch can also be optimized to include filters on your website that showcase the percentage of CBD or THC in a given product.
When it comes to cannabis eCommerce websites that are doing that transparency thing right, Trulieve serves as an excellent example. Their website includes clear ways to look for the best strains, even including separate sections for CBD and THC-based products.
Build the CBD eCommerce site of your dreams
eCommerce and cannabis are some of the fastest-growing industries in North America.
Because each American State can determine its own cannabis-related laws, regulations of the sale and possession of any form of cannabis vary.
It’s best to trust an expert developer to help you build a site that stays compliant, content-rich, and accessible to customers.
Once you’ve decided on your products, associated inventory, and your company’s true needs, be sure to hire a team of well-equipped developers to help you achieve your eCommerce goals.