In the last few years, a lot of people have developed an interest in using CBD for many purposes. There are CBD oil, CBD supplements, CBD tablets, and more. People add CBD in their body lotion, apply to their hair, use with their tea and much more. CBD, which stands for Cannabidiol, is the substance extracted from Indian hemp or marijuana. It is said to have medical benefits that can be found in cannabis but with less THC. THC is the component that creates the “high” people experience when they consume cannabis. Marijuana or Indian hemp can have up to 40% THC while CBD usually has 0.3% THC.
Due to the recent legalization of cannabis in different parts of the world, a lot more people now see it as an entrepreneurial opportunity. Hence, we now have online CBD sellers and more people looking to start selling CBD products online. As we all know, every business sector has its challenges, online CBD sellers are not left out. Since it’s a new sector that has just gained legality, it faces unique challenges that make it hard for start-ups to thrive.
Here are some of the challenges
The US Farm Bill of 2018 removed cannabis from the list of controlled substances, which now makes cannabis legalized in a way. However, not all US states agree with this, some states still see Cannabis and CBD as illegal substances. This poses a problem for online sellers, they have to find out what states they can practise in and sell to. In most cases, they also have to pay exorbitant taxes that may affect their profit. While it may seem like it is easy to navigate this by simply selling in a state where cannabis or CBD is legal, there are adverse effects of the conflicting laws.
Reluctant Financial Institutions
One of the adverse effects of the conflicting laws is reluctant financial institutions such as credit card companies, merchant service providers, payment gateways, and banks. Most of the popular names like PayPal, Stripe, and Square don’t support online CBD sellers. According to Acreage Holdings’ CEO, Kevin Murphy, only one out of thirty banks do business with online CBD sellers. This leads online CBD sellers to seek solutions in the hands companies such as T1 Payments, private financial consultants and foreign companies that charge cutthroat fees. Not to mention that most of these companies usually change their policies from time to time, leaving online CBD sellers stranded. Shopify that has always posed as a company that supports start-ups is also found wanting in this area. While you can establish your CBD store on Shopify, you will have to find a third-party payment solution and a logistics company that support online selling of CBD.
All these make it hard for start-ups in the new sector. Some believe that financial institutions are making it difficult for CBD start-ups so that giant companies can take over the industry.
Online Marketing is Hard
Giant companies such as Google and Facebook clearly show their lack of support for the CBD industry. Google, for one, does not allow CBD ads on its platform. Facebook doesn’t explicitly ban CBD ads, but it limits CBD adverts by prohibiting the use of terms like ”CBD” and ”ingestible hemp” in ads.
Keeping Up With Different Compliance Bodies
As mentioned above, cannabis has been legalised by the federal government but not by all state governments in the US. Cannabidiol as a product must follow the FDA policies, this means that online CBD sellers must comply with the FDA rules. They must get FDA approval before selling their products and this doesn’t come easy, especially for CBD products. Same applies for other compliance bodies that regulate CBD.
How Can You Scale The CBD Industry As An Online Seller?
A lot of online CBD sellers make use of foreign companies for their payment solutions and that works for them. However, the risk may be too much to bear for start-ups. Besides, these foreign companies often take too many cuts, therefore, we don’t recommend this option as the best.
Stay Current On CBD News And Updates
Whether your online CBD store is backed-up locally or you make use of foreign companies, we advise that you stay on top of news about CBD. The industry is new and still going through growth stages, so there are bound to be new policies coming up from time to time. This also means that some old policies will be discarded for better ones. On the other hand, new rules can be made suddenly and might affect you as an online CBD seller negatively if you don’t act quick. For example, Elavon, a payment solution company recently asked CBD sellers who use their services to find an alternative within 45 days. Ensure that you’re always informed on new trends and updates and use them to your advantage.
BigCommerce Provides All-in-one CBD Support For Online Sellers
Unlike most e-commerce big brands, BigCommerce does not shy away from the newly legalized industry. Also, unlike their counterparts, Shopify and Webflow, they offer thorough solutions. BigCommerce formed different partnerships with third-party e-commerce tools to help foster the CBD industry. In August, they launched a program known as BigCommerce For Hemp and CBD – a program that provides start-ups with all the necessary tools as a whole service. Under this program, online CBD sellers will get a secure online store, payment gateway, and shipping within the US. To put in simpler terms, BigCommerce is offering online CBD sellers as well as brick and mortar merchants everything it takes to legally sell their CBD products within the US.
BigCommerce offers the stability much needed for growth.
The CBD industry has been predicted to grow into a $1.8 billion industry by 2020, and we have no doubt about it. Although the awareness is still low, about 64 million Americans admit that they have tried to use CBD in the last two years. This is a huge success, and no matter the negative opinion people have about CBD, it is an industry waiting to explode.