Legal framework for the cannabis market is growing exponentially every single year. Experts believe that the industry will be worth more than $73.6 billion by 2027. Notwithstanding the popularity, this swiftly growing sector is missing one of its biggest potential markets — e-commerce. Can you sell cannabis online? Let us have a closer look at what it takes to sell cannabis online legally in the United States.
Shipping Woes
A typical e-commerce transaction goes something like this — a customer finds something they want and puts it in their virtual cart. From this point, they enter their information, input their credit card number, and click the complete order button. Within the next few days, the ordered item gets shipped straight to their door. E-commerce has turned into one of the easiest ways to get about anything sent directly to you without the hassle of going to the store.
Alas, shipping cannabis is not an option, even in states where it is legal for medical or recreational use. In accordance with the federal government, which still considers cannabis a dangerous Schedule I drug, sending an order from a dispensary via USPS, UPS or FedEx constitutes drug trafficking, a costly felony charge.
This is an issue that limits your ability to ship online orders to customers and makes e-commerce difficult for cannabis businesses. On the plus side, it also prevents people from placing an order from states where cannabis is still illegal.
One Solution: Courier Delivery?
While attempting to send a cannabis order through the mail might be illegal, that does not mean dispensaries cannot deliver their customers’ online orders. As an alternative, many companies rely on couriers to deliver these packages in person.
This approach has multiple benefits. In addition to enabling customers to have their purchases delivered, you already have a trained person on hand to verify IDs and collect payment.
Courier service is often limited to a small geographical area around the dispensary’s physical storefront. When online orders start becoming popular, it may be more cost-effective to expand your courier fleet to increase the size of that delivery zone.
Nevertheless, this is not the only challenge legal cannabis companies face when trying to make their way into the e-commerce market.
A Cash-Only Business
Next challenge preventing the legal cannabis industry from entering the e-commerce realm is the fact that this is a mostly cash-only business. Many online transactions require you to enter a credit or debit card, but once that is complete, your order is shipped and on the way.
Cell phone payment apps often fall into the same categories as banks, banning any cannabis-related transactions. Things like PayPal, CashApp, and Venmo are not an option, but the industry is constantly developing innovations to make payments simpler. Purple Pineapple has many of those options.
Credit or debit cards have not an been option for dispensaries and legal cannabis companies until recently. The present federal legality means most banks and creditors do not work with the industry, relegating any purchases — online or otherwise — to a cash-only payment model.
For the online orders, cash payments can be challenging. People do not 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: Cannabis Merchant Payments and Banking
Traversing dispensary payment processing is a challenging operational task, and we will be here to help your dispensary accept payments in the most seamless and cost-effective manner. We have several solutions available tailored to your dispensary processing and banking needs. Setup a Bank Account and Accept electronic payments with ease at little to no cost for your startup or established business.
PIN debit has been one of the most stable and cost-effective solutions for a marijuana dispensary to eliminate cash payments and increase security as less cash is funneled through your dispensary operations. Less cash handling to minimize accepting any cash from customers, Consumers spend 30% more per transaction, effectively increasing your sales & consumer experience. Digital signature captured at the terminal level for compliance, EMV/NFC contactless ready, most up-to-date PCI compliant technology and mobile hardware equipment.
With our e-Check secure gateway, create and process Electronic Checks, send Email Invoices, and even Accept Payments Online (or integrate into your current systems via API). Get SAME or NEXT DAY credit for your transactions at All Banks in the U.S.! So YES! You can sell cannabis online legally. What most of our dispensaries have done is adopted a “sample box of the month, week, whatever…”. Customer signs up once from home, enters ID and info for verification, enters banking info, and voila! Recurring subscription billing automatically pulled from their account into yours. Not to mention you can now market to them directly and they can purchase new items on the fly for next delivery. You do have to deliver to them with your guys but with mostly next day funding, what is not to like?
“That’s all great, but we can’t seem to even get a bank account or much less attorney for all the legal stuff.” Got you covered from A-Z. Our banking partners will handle everything on the legality and banking side so you can focus on your business. Complete control of your Cannabis Business with FDIC-Insured Business Banking
Marketing Challenges
Marketing has been the lifeblood of any online business. Rumor 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 will be up to business owners to create a user-friendly website that allows potential customers to browse their wares quickly and easily. Many consumers will stop using a website if it does not 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 with access to your own Branded Dispensary Delivery Platform
Having a great, eye-catching, engaging website that functions well is a necessity in today’s economy. We have become so wrapped up in e-commerce that without a strong online presence, any business will have trouble thriving. If you are going to consider online orders, invest in a well-designed website.
If web design is not 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. We can create a page attached to your own online marketplace and delivery, find out more here.
Can You Sell Cannabis Online?
The answer is — yes, somewhat. While the industry continues growing, banks and creditors may decide to start supporting it more so. The federal government may finally recant its decision to classify cannabis as a Schedule I drug. Ideally, cannabis legalization will happen on a national level.
