How to Build an eCommerce Marketplace for Selling CBD Online?
Last Updated: 16th March 2021
We never realized how CBD became an important ingredient in our everyday life. By now, all of us have probably come across a product that contains Cannabis. There was a time when even talking about Cannabis was considered immoral. But, all thanks to researchers and scientists who are dedicatedly working to find out more about the usage of Cannabis.
The history of this sacred plant is so old that the medical benefits associated with this plant are still being discovered. Its usage by humans dates back to at least the third millennium BC in written history, and possibly further back by archaeological evidence.
But why so much controversy for just a plan? Let’s get a quick dive and understand,
What is Cannabis & Why it Faced Decades of Shame?
Cannabis refers to a group of three plants with psychoactive properties, known as Cannabis sativa, Cannabis indica, and Cannabis ruderalis. It is also known as marijuana among other names and is used primarily for medical and recreational purposes. And CBD, short for cannabidiol, is a chemical compound from the Cannabid sativa plant
According to The Vedas, cannabis was one of five sacred plants. The Vedas call cannabis a source of happiness, joy-giver, liberator that was compassionately given to humans to help us attain delight and lose fear (Abel, 1980). It releases us from anxiety.
Then why was it banned in the first place? It is still surrounded by a lot of theories but I think the following blog has pretty much summarised it all — Why Was Hemp Made Illegal In 1937?
Why Sell Cannabis or CBD Products Online?
Online Cannabis is an unexplored yet highly profitable sector.
According to Forbes, “In the United States, sales for CBD are expected to reach an astounding $20 billion mark by 2024.
Despite the growth and opportunities available in the Cannabis industry, selling CBD can be complicated. You will need to understand various legal obstacles that differ from region to region. Creating a memorable brand is another challenge as Cannabis is still in the progress of transforming into a white-collar industry.
To successfully start an online Cannabis delivery marketplace or mobile app, all you need is a highly customizable eCommerce solution. And there are not just one or two but many good reasons to start an online cannabis or CBD delivery marketplace.
Let’s explore the main factors why the cannabis industry is a good niche to invest in 2021.
Legalization of Cannabis
Fortunately, many countries have legalized the use of Cannabis for medical as well as recreational purposes. Although Cannabis has been popular way before it became legal in many countries due to the “high” it produces. Many consumers do not wish to consume Cannabis due to its psychoactive effects but instead, want to consume it to experience the medical benefits.
Here are the countries where Cannabis is legalized and decriminalized:
Cannabis Legality in Canada: Canada has set an example for the rest of the world by legalizing Cannabis for recreational purposes as well. The legalization had opened the doors for numerous companies seeking to earn profits in a USD 24.6 billion industry. Demand in Canada is usually so high that suppliers even run out of stock. The most purchased Cannabis products include pre-rolled cannabis cigarettes and oil-based products high in CBD.
Here is an image of people celebrating the first anniversary of Cannabis Legalization in Canada
Many Cannabis companies in Canada are partnering with the alcohol, food, and tobacco industries to create a new niche in the segment. Deloitte estimates that the annual Canadian market for edibles and alternative cannabis products is worth C$2.7 billion.
Following is the image representing the current and likely users of Cannabis. Let’s understand what is the difference!
Cannabis is undoubtedly a booming industry as the numbers suggest. Take a look at the stats:
- Cannabis is predicted to generate $75 billion in gross annual sales by 2030.
- Medical marijuana emerged as the largest marijuana type segment in 2016 and is estimated to be valued at USD 100.03 billion by 2025.
- Most people spend an average of $25 to $50 per trip at a marijuana retailer.
- Revenue from the CBD category is forecasted to reach $1 billion per year.
People are still hesitant to get into this industry because of the legalities that Cannabis attracts. The demand is high and the audience is looking for an online solution. This is the right time to easily capture the market as the competition is low. Make sure to analyze the pain points clearly so that you can build the main USP of your business accordingly.
Here are some of the popular online cannabis websites:
4. Growing Usage: The researchers have dedicatedly worked to find out the medical benefits of Cannabis and they have also succeeded at a large extent. The best part is that countries like Canada have legalized Cannabis for recreational purposes as well. The consumers of Cannabis are increasing at large numbers; thus, the need for an online cannabis marketplace has risen.
How to Start Online Cannabis Delivery Marketplace & Mobile App?
Launching a cannabis website is not as simple as launching an eCommerce store for grocery or fashion apparel. There are must-haves that should be satisfied to acquire the license for selling CBD-based products. Let’s understand the process step-by-step:
Step 1 | Choosing The Right Location
Location is the most important factor to be considered if you are planning to sell CBD-based products online. This is because the laws and regulations differ from region to region.
The legality of Cannabis is classified into three segments — recreational, medical, and transportation. Some states allow medical marijuana, whereas other states allow usage of both recreational and medical purposes. So, make sure to choose a location that is best suited for your business.
Step 2 | Choosing The Right Business Model
If all the legalities are followed properly, the business model for an online cannabis business will be like any other eCommerce business. You can choose from the following options:
- Single-vendor Cannabis Store — Where the website owner is the vendor/seller and he is responsible for managing inventory, packing, delivery, etc.
- Multi-vendor Cannabis Marketplace — Where multiple buyers and sellers can indulge in trading using the website. A multi-vendor cannabis marketplace would function in the following manner:
- Local cannabis store owners can register on the platform.
- Customers will register on the platform via email address or social media.
- Customers will browse through various dispensaries and order their preferred Cannabis/ Cannabis Product.
- Delivery can be handled by the owner of the website or 3rd party transportation services.
Step 3 | Developing a Website/ Mobile App
The final step is to build a website/mobile app using a ready-made solution like Yo!Kart. Why a ready-made solution? Because building a website or mobile app from scratch will take a lot of your time, efforts and money.
Yo!Kart by FATbit Technologies is a feature-rich, scalable and fully customizable platform to launch an eCommerce multivendor platform. It is an award-winning eCommerce marketplace solution that enables aspiring entrepreneurs to start their own online marketplace in an easy, quick, and cost-effective manner.
Following are the advantages of choosing Yo!Kart for building your cannabis marketplace:
- Pay once, Own Forever
- Easy Payment Terms
- Free Technical Support
- High-load Optimization
- Feature Rich Solution
- Completely Customizable & Scalable