Cannabis and eCommerce

The Cannabis industry has been going through a lot of changes in the last decade. As more states legalize the use of both medicinal and recreational cannabis, the industry is growing at an incredible rate. This growth is fueled by the fact that states like Colorado have seen huge tax revenues from the sale of legal cannabis. Despite the fact that cannabis and eCommerce have had a rocky history, that trend is quickly changing as states see the benefits.

SELLING CANNABIS ONLINE
So far, the majority of US Cannabis sales have been through brick and mortar shops, mostly because the legal framework to sell cannabis online, much like the industry itself, is still in its infancy. As the CBD industry and recreational cannabis have grown, the legal landscape is changing to allow more cannabis businesses to develop online storefronts.

One of the biggest recent impacts on Cannabis and its emergence into eCommerce has been the COVID-19 lockdown. As soon as Cannabis businesses began to hit their stride, they had to deal with a huge decrease in brick and mortar sales. Luckily, due to the medical use of Cannabis, the industry has been deemed essential and many cannabis businesses have continued to operate to provide their customers with CBD and THC products.

In the wake of Cannabis being recognized as an essential industry, businesses have been seeing amazing results with their online presence. While brick and mortar sales accounted for 80+% of cannabis business before COVID-19, now the majority of those orders are coming in online. Sadly, cannabis with a high THC cannot be shipped using the US postal service, but online orders for pickup and local delivery are becoming more common.

LOOKING TOWARDS THE FUTURE
The ability to sell online is still a case by case situation for most businesses. It all depends on the laws in each state and city. Obviously the open online sale of cannabis has been limited to recreationally legal states, though some states with medical cannabis have online resources. Different states have different policies about how cannabis products can be sold and how payment can be accepted. Lawmakers are quickly making it easier for these businesses to function as cannabis continues to create huge tax revenues for states.

ax revenue is probably going to be the biggest driving force behind future cannabis legalization. While many states initially rejected the idea of recreational legalization, states that have a legal cannabis industry have enjoyed the finical gains that come from shifting cannabis sales off of the black market. When Colorado first legalized, the state found itself with a huge surplus due to their strategy of putting a 15% tax on Cannabis sales and a 15% excise tax on cannabis suppliers. Now states like Washington are imposing taxes as high as 37% on cannabis products and still seeing high sales.

The fact that these high tax rates are not effecting sales is catching the attention of other state legislatures. Even more conservative states like Texas are having to seriously consider legalizing for tax revenue. The COVID-19 lockdown is costing states huge portions of their annual sales tax revenues and cannabis is an easy way for states to get back in the black. As more and more states start legalizing in one form or another, legislation is making it easier for brands to sell their cannabis products online.

Another great sign for the cannabis industry is the formation of international relations. Recently the Canadian based Aurora Cannabis purchased the US-based Reliva CBD company. This is opening up future avenues for US cannabis companies to do business in Canada and vice versa. Because our neighbors to the north already have legalized recreational cannabis, but very few producers to meet the demand, this could be a huge boon for the future of US cannabis production.

MARKETING CANNABIS
Because of the rules put in place by many PPC advertisers, cannabis cannot be marketed using traditional paid ads. Instead, online cannabis brands have to rely on social media and search engine optimization services. Both of these marketing strategies are dedicated to helping brands increase their visibility amongst potential customers.

At 1Digital Agency, we are no strangers to cannabis SEO. We have worked with clients in the cannabis industry as well as businesses that sell accessories for using cannabis and hemp-based products. If you want your online cannabis store to attract more organic traffic, our team of writers and SEO strategists can help you see the results you’ve been looking for. To see exactly what our team can do for you, give us a call at 866-398-2033 and we’ll set up a meeting to discuss a free SEO audit of your website with one of our SEO experts.