The legal cannabis market is growing exponentially every single year. Experts estimate that the industry will be worth more than $73.6 billion by 2027. Despite its popularity, this swiftly growing sector is missing out on one of its biggest potential markets — e-commerce. Can you sell cannabis online? Let’s take a closer look at what it takes to sell cannabis online legally in the United States.
Shipping Troubles
Your average e-commerce transaction goes something like this — a shopper finds something they want and puts it in their virtual cart. From there, they enter their information, input their credit card number, and click the complete order button. In a couple days, the ordered item gets shipped straight to their door. E-commerce has become one of the easiest ways to get just about anything sent directly to you without the hassle of going to the store.
Unfortunately, shipping cannabis is not an option, even in states where it’s legal for medical or recreational use. According to the federal government, which still considers cannabis a dangerous Schedule I drug, shipping an order from a dispensary via USPS, UPS or FedEx constitutes drug trafficking, a costly felony charge.
This issue limits your ability to ship online orders to customers and makes e-commerce difficult for cannabis businesses. On the bright side, it also prevents people from placing an order from states where cannabis is still illegal.
A Solution: Courier Delivery
While sending a cannabis order through the mail might be illegal, that doesn’t mean dispensaries can’t deliver their customers’ online orders. Instead, many companies rely on couriers to deliver these packages in person.
This method has multiple benefits. In addition to allowing customers to have their purchases delivered, you’ve got a trained person on hand to verify IDs and collect payment.
Courier delivery is often limited to a small geographical area around the dispensary’s physical storefront. If online orders start becoming popular, it may be more cost-effective to expand your courier fleet to increase the size of that delivery zone.
However, this isn’t the only challenge legal cannabis companies face when trying to make their way into the e-commerce market.
A Cash-Only Business
Another challenge preventing the legal cannabis industry from entering the e-commerce realm is the fact that this is a cash-only business. Most online transactions require you to enter a credit or debit card, but once that’s complete, your order is shipped and on the way.
Credit or debit cards aren’t an option for dispensaries and legal cannabis companies. The current federal legality means banks and creditors don’t work with the industry, relegating any purchases — online or otherwise — to a cash-only payment model.
For online orders, cash payments can be challenging. People don’t carry cash as often as they used to and ATM fees can add up quickly. Some dispensaries choose to install an ATM on the property — at an additional cost — simply to make things more convenient for their customers. Unfortunately, this requires shoppers to come into the store, which negates the potential applications of online ordering.
A Solution: Payment Programs
Mobile payment apps often fall into the same categories as banks, banning any cannabis-related transactions. Things like PayPal, CashApp, and Venmo aren’t an option, but the industry is constantly developing innovations to make payments simpler. PayQwick is one of those options.
PayQwick is a mobile payment app that you load with money from your bank account, similar to PayPal or other mobile payment apps. The difference is that since banks and creditors don’t support it, customers can use it to make purchases at dispensaries. This app is even approved by state regulators and is licensed in the state of Washington as one of the state-approved money-sending apps for cannabis purchases.
This app is currently available in a limited number of cities on the West Coast, but it’s the perfect example of a solution for the cash-only problem.
Marketing Challenges
Marketing is the lifeblood of any online business. Word of mouth will only carry you so far. It gets challenging when cannabis-friendly websites like Weedmaps are overrun with unlicensed sellers, and major companies like Google change the rules so cannabis apps can no longer have an in-app shopping option. Social media, which is a valuable tool for any marketing division, is also out of reach for cannabis firms — at least when it comes to a paid advertisement.
It’s up to business owners to create a user-friendly website that allows potential customers to browse their wares quickly and easily. Many shoppers will stop using a website if it doesn’t display well on their device. Many dispensaries also have dozens or hundreds of different strains and products to list on their sites. Putting them all on a single page and expecting the customer to scroll through them will drive them away.
A Solution: Invest in Website Design
Having a great, eye-catching, engaging website that functions well is a necessity in today’s economy. We’ve become so wrapped up in e-commerce that without a strong online presence, any business will have trouble thriving. If you’re going to consider online orders, invest in a well-designed website.
If web design isn’t your forte, consider opting for a pre-built system like those common in restaurants. These online order systems are easy to set up and integrate seamlessly into existing inventory networks. It can also double as a point of sale in your dispensary or business, which keeps things streamlined.
Can You Sell Cannabis Online?
The answer is — it’s complicated. If you’re willing to jump through all the hoops — courier delivery, cash-only transactions, and an enhanced online presence — then yes, you can sell cannabis online. As the industry continues growing, banks and creditors may decide to start supporting it. The federal government may finally recant its decision to classify cannabis as a Schedule I drug. In an ideal world, cannabis legalization will happen on a national level.
While we wait for these milestones, selling cannabis online remains challenging, but it is possible if you try.
