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Education
ChapterTitle

Ecommerce opportunities

abound in cannabis market

By Max Miller financial technology startups have emerged to serve this
Paybotic burgeoning industry. In fact, Shopify has agreements
with two provincial governments (Ontario and British
commerce is changing the way people shop Columbia) to support ecommerce initiatives for cannabis
and pay. While the future of ecommerce is far dispensaries.
from certain, this much is clear: successfully The ecommerce model in cannabis sales
E navigating this sea change requires the ability
to deliver shopping experiences that anticipate changing In the United States, ecommerce platforms like Leafly
consumer needs and preferences. and Weedmaps enable consumers to find local cannabis
dispensaries, check and compare menus and pricing and,
One emerging trend is an increasing preference for online where legal, place online orders. As the legal landscape
ordering of cannabis products. Cannabis and ecommerce changes and the legal cannabis market continues to mature,
may seem like a mismatch. Federal prohibitions on financial technology will play a pivotal role, paving the
the sale and use of cannabis products have long forced way for a full-scale ecommerce model to flourish.
cannabis dispensaries to accept cash only. But a wave of
state initiatives legalizing cannabis for medicinal and/ Fifty-nine percent of Americans favor legalization of
or adult recreational uses has led to thriving sales, with cannabis for medicinal and recreational uses, according
progressive payment processing companies offering to the Pew Research Center. And Congress has made
workarounds that support card payment. strides toward removing the stigma around cannabis. The
Marijuana Opportunity Reinvestment and Expungement
Arcview Market Research estimates total yearly North (MORE) Act, now before the U.S. House and Senate,
American spending on legal cannabis products will would remove cannabis products from the federal list of
reach $47.3 billion by 2027, which represents better than a prohibited controlled substances. The SAFE Banking Act,
fivefold increase over 2017, when $9.2 billion was spent on which has passed in the House, would enable cannabis
legal weed. The recreational market is expected to account shops to open bank accounts and access the credit card
for about two-thirds of that total, with medical cannabis networks. Ecommerce platforms respond to consumer
products making up the remainder. preferences for convenience and merchant desires for
efficient operations. Business owners, for example, can
Cannabis products include marijuana flower and vape more easily monitor transactions, target customers and
pens, which are generally smoked, as well as edibles and maintain appealing digital facades while minimizing the
CBD products. CBD (or cannabidiol) is a non-psychoactive upkeep required for brick-and-mortar locations. Plus, the
compound found in all cannabis plants that can be platforms will support more informed buying decisions
consumed as oils, creams, edibles or smokables, and can for consumers.
help treat a variety of ailments.
More than 800 strains of cannabis have been recognized
The rise of ecommerce by the cannabis community, and there is an active pipeline
Ever since 1995, when Amazon.com founder Jeff Bezos of new strains. Each has unique concentrations of THC
made his first online book sales, ecommerce has grown and CBD that address patient needs and recreational user
exponentially. Americans spent approximately $547.7 preferences. Then there are the various forms – flower,
billion online last year, and online spending is expected to concentrates, topics and edibles. Leveraging artificial
reach $750 billion by 2023. intelligence and other tools, an ecommerce platform can
help customers determine which strains and forms best
The adoption arc for ecommerce has a fairly short tail. suit their needs and desires. Significant opportunities
Initially, consumers use the web primarily to shop around, exist in cannabis for improving the buyer experience
comparing products and prices. Once they feel comfortable through ecommerce platforms. The question is not
with the online experience, they tend to shop and pay for whether this model will dominate the cannabis market,
purchases online. Today cannabis is experiencing the but when. Consumers, already accustomed to the online
beginning of this arc as enterprising dispensaries launch experience for other buying activities will expect the same
online stores where patients and customers can compare when purchasing cannabis products.
available strains and order products from home. The
constraining factor is divergent state laws and regulations Max Miller is founder and CEO of Paybotic, a payment processing com-
around cannabis sales. This isn't the case in Canada, pany specializing in high-risk businesses, such as cannabis dispensaries.
where cannabis was fully legalized in 2018, and several Contact him at max@paybotic.com.

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