Post date: 2/11/2020

Written by Max Miller, CEO, Paybotic.

e-Commerce is changing the way people shop and pay. While the future of e-Commerce is far from certain, this much is clear: successfully navigating this sea change requires the ability to deliver shopping experiences that anticipate changing consumer needs and preferences.

One trend we’re anticipating is an increasing preference for online ordering of cannabis products.
Cannabis and e-Commerce may seem like a mismatch. Concerns about federal prohibitions on the sale and use of cannabis products, after all, have long forced cannabis dispensaries to only accept cash. But a wave of state initiatives legalizing cannabis for medicinal and/or adult recreational uses over the past decade has led to thriving sales, with progressive payment processing companies offering workarounds that support card payment.

Arcview Market Research estimates that total yearly North American spending on legal cannabis products will reach $47.3 billion by 2027, which represents better than a five-fold increase over 2017 when $9.2 billion was spent on legal weed. The recreational market is expected to account for about two-thirds of that total, with medical cannabis products making up the remainder of the market.
Cannabis products include marijuana flower and vape pens, which are generally smoked, as well as edibles and CBD products. CBD (or cannabidiol) is a non-psychoactive compound found in all cannabis plants that can be consumed as oils, creams, edibles or smokables, and can help to treat a variety of ailments.

The rise of e-Commerce

Ever since 1995, when Jeff Bezos, the founder of, made his first online book sales, e-Commerce has been growing exponentially. Americans spent an estimated $547.7 billion online last year, and online spending is expected to reach $750 billion by 2023.

The adoption arc for e-Commerce has a fairly short tail. Initially consumers use the Web primarily to shop around, comparing products and prices. Then, once they feel comfortable with the online experience, they tend to actually shop and pay for purchases online. Today we’re witnessing the beginning of this arc for cannabis, as enterprising dispensaries launch online stores where patients and customers can compare available strains and order products from the convenience of home. The one constraining factor is different state laws and regulations around cannabis sales. This is not the case in Canada, where cannabis was fully legalized in 2018, and where several financial technology startups have emerged to serve this burgeoning industry. In fact, Shopify has agreements with two provincial governments (Ontario and British Columbia) to support e-Commerce initiatives for cannabis dispensaries.

The ecommerce model in cannabis sales

Here in the U.S., e-Commerce platforms like Leafly and Weedmaps already allow consumers to find local cannabis dispensaries, check and compare menus and pricing, and where legal place online orders. As the legal landscape changes and the U.S. legal cannabis market continues to mature, financial technology will play a more pivotal role, paving the way for a full-scale ecommerce model to flourish.
Public support for cannabis legalization is strong – 59 percent of Americans favor legalization for medicinal and recreational uses, according to the Pew Research Center. And Congress has made strides toward removing the stigma around cannabis.

The Marijuana Opportunity Reinvestment and Expungement (MORE) Act, now before the U.S. House and Senate, would remove cannabis products from the federal list of prohibited controlled substances, and the SAFE Banking Act, which has passed in the House, would enable cannabis shops to open bank accounts and access the credit card networks.

e-Commerce platforms respond to consumer preferences for convenience and merchant desires for more efficient operations. Business owners, for example, can more easily monitor business, target customers and maintain appealing digital facades while minimizing the upkeep required for bricks and mortar. Plus, the platforms will support more informed customers’ buying decisions.

Cannabis comes in many strains – more than 800 strains have been named and recognized by the cannabis community, and there is an active pipeline of new strains. Each has unique concentrations of THC and CBD that address patient needs and recreational user preferences. Then there are the various forms – flower, concentrates, topics and edibles. Leveraging artificial intelligence and other tools, an ecommerce platform can help customers determine which strains and forms best suit their needs and desires.

Clearly, there are significant opportunities for improving the buyer experience through ecommerce platforms in cannabis, just as it has in other verticals. The question is not whether this model will dominate the cannabis market, but when. Consumers, already accustomed to the online experience for other buying activities (like groceries and dining) will come to expect the same when purchasing cannabis products.

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