As more consumers begin to use marijuana products, e-commerce is becoming a more viable option for the cannabis industry. In recent decades, the retail sector has changed dramatically.
However, the transition to a digital business is not as simple as it seems for certain sectors. Specifically, the cannabis industry has faced numerous legal barriers. Which has prevented it from expanding into the digital market.
For example, because of concerns about the legality of marijuana companies in sectors such as finance, marketing, and advertising have moved away. However, as more regions continue to move towards legalization. Several industries have a huge interest in entering into agreements and partnerships with cannabis companies.
In particular, the US approved the Farm Bill in 2018. Which legalized CBD products derived from hemp. Initially, many companies explicitly noted that they would not participate in the marijuana sector for legal reasons. However, after the agricultural bill passed, large companies began to market and advertise CBD products.
The cannabis industry continues to expand. Technology plays a key role in the development of the industry. Paving the way for the development of e-commerce in cannabis. While traditional dispensaries are still popular in legal regions. Digital platforms in general designed to accelerate sales even further.
According to data compiled by Ameri Research, the global legal marijuana market valued at $14.3 billion in 2016. By 2024, global legal marijuana sales by 2024 have a project to reach $63.5 billion. While exhibiting a CAGR of 21.1% from 2017 to 2024.
In the future, industry experts believe that marijuana will continue to integrate into conventional retail. This is as the next legalization waves take hold. For example, Canada’s second legalization, due in late 2019, focuses on food and beverages.
In addition, the third wave of legalization should focus primarily on a variety of products. Products as shampoos, lotions, and others. In particular, the third wave expects to be strongly integrated with traditional retail operations.
The US is primarily limited to the CBD industry. Since other aspects of cannabis are still federally illegal. On the other hand, Canada has zero restrictions. Because it completely legalized cannabis in late 2018. Joining Uruguay as the only two nations in the world to do so. The legislation has allowed the legal adult-use of both medical and recreational cannabis.
Notably, during the first day of legalization, many dispensaries and online platforms experienced shortages throughout the country. Due to the massive number of consumers looking to purchase cannabis products. In efforts to provide consumers with convenience and comfort. Some businesses launched delivery options. Where consumers can order online and then have cannabis products delivered right to their doors.
E-Commerce as a Viable Platform for the Cannabis Industry
Over the past several decades, the retail industry has drastically changed. Due to the development and propagation of e-commerce. Today, many consumers tend to prefer purchasing products online. Because they can simply browse stores anywhere in the palm of their hands.
However, transitioning towards a digital business is not as simple as it seems for certain industries. Specifically, the cannabis industry has faced countless legal barriers that have hindered its expansion into the digital marketplace.
For instance, because of cannabis’ legality concern, companies in industries like finance, marketing, and advertising have steered clear. However, as more regions continue to move towards legalization. Various industries have become interested in locking into agreements and partnerships with cannabis companies. In particular, the U.S. passed the Farm Bill in 2018, which legalized hemp-derived CBD products.
(Featured image by Square)
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