As Governments in different countries are legalizing medical and recreational Cannabis, increased opportunity and low competition have encouraged entrepreneurs to jump into the fray and start a CBD marketplace. While there are different niches for different types of consumers, the online CBD marketplace has fostered a completely new consumer category. It is a perfect opportunity for future-thinking businesses in the consumer packaged goods sector.
With almost one in four Canadians consuming or likely to consume Cannabis edibles and other alternative Cannabis products, legalizing these products should clearly create valuable new growth opportunities for Canada’s Cannabis sector. It will also help maintain Canada’s leadership position in an industry where the top Cannabis markets globally are, by Deloitte’s estimate, worth US$100 billion today— reaching US$194 billion by 2025.3 Stats Source:Deloitte
Recreational Cannabis sales enjoyed a 24 percent compound annual growth rate within the past four years.
Though the opportunity in this sector is high as there is less competition, and consumers are on the higher side, entrepreneurs also need to keep into account the legalities and rules that surround this niche.
Some Cannabis-related terms that you should know are:
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. Instead, they want to consume it to experience the reported therapeutic effects. Subsequently, the demand for Cannabidiol (CBD)-based products are also on the rise, both in North America and around the world.
CBD is a non-psychoactive component of Cannabis, which means that unlike tetrahydrocannabinol (THC), it is reported to deliver therapeutic effects without producing the highs.
The demand for this product is so high that out-of-stock rates of CBD-based products in Canada are much higher than any other post-legalization product.
Within the edible space, there is another sub-category: Cannabis-infused beverages. These beverages enjoyed a 61% boost in year-over-year sales growth between September 2017 and September 2018.
The market is diverse, and consumers drive growth in retail areas that are newly emerging as significant Cannabis categories. Vape pens, topicals, tinctures, and edibles had the highest year-over-year sales growth in U.S. states.
Cannabis-infused edible is still in the nascent stage but will quickly gain attention, especially for the consumers who prefer non-inhalable options. For even Cannabis, taste is the key for consumers, and people prefer cookies, chocolate, and drinks infused by Cannabis.
One more segment of this industry is the accessories needed for recreational Cannabis.
People who consume marijuana like to buy and collect different types of accessories. The online marketplaces for such categories are getting popular amongst Cannabis users.
Yo!Kart Testimonial given by the owner of Smoshe marketplace:
Source:Capterra
While the legalization of Cannabis for medical and recreational uses depends on the countries but the countries who have legalized it have also concurrently created regulations and policies laying down how and where Cannabis can be used.
Thanks to researchers and studies who found the science behind Cannabis, the medical benefits associated with this plant are still being discovered.
One country that set an example for the rest of the world is Canada, which legalized recreational Cannabis and opened doors for hundreds of companies seeking to earn profits in a $7 billion industry. Demand in Canada is so high that some suppliers are out of stock of products which consumers eagerly purchase like pre-rolled cannabis cigarettes and oil-based products high in CBD.
Many Canadian Cannabis companies are partnering with alcohol, food, and tobacco industries to create a new niche in the segment.
This map shows where cannabis is legalized around the world:
List of countries where Cannabis is decriminalized and legal:
For More information regarding the legality of cannabis country wise- Check Here
Though the content mentioned above will give you a clear understanding of why investing in a Cannabis marketplace is a good idea. Here we will give you some hard-hitting facts and stats regarding the online CBD marketplace business:
Opportunity due to less competition: The competition in the Cannabis sector, especially the online CBD marketplace, is not too much. Now is the time to realize the growth trajectory of the sector and invest in it. The audience looking for an online solution in the sector will be the easiest to capture since the competition is low.
Make sure you do a thorough analysis of the market and customer pain areas to understand the main USP of your business. The demand is high, and there are only a few online CBD marketplaces, understanding and capturing the market now. There is a whole untapped market out there.
This means that Marijuana-related companies will be gaining exposure very quickly as they provide a service that has not been on the market ever before.
Growing usage: Thanks to researchers and scientists who are dedicatedly working to find more benefits of Cannabis. People are increasingly using Cannabis for medical and recreational purposes. The consumers of Cannabis are increasing at large numbers; thus, the need for an online Cannabis marketplace has risen.
Those who are planning to enter this sector and start a CBD marketplace need to understand the current market scenario and launch a website that can handle high traffic. We can now safely say that people's attitude towards Cannabis is changing since countries are coming on-board to legalize it.
Another reason for increasing adoption of Cannabis is to treat an extensive range of diseases and illnesses, such as schizophrenia, Type 2 diabetes, post-traumatic stress disorder, and even some types of cancer.
Norms and regulations have eased : If we see some years back, Cannabis was illegal in all the countries, and there was a stigma attached to it because of the "high" effect it produced. As technology grew, people scientifically started researching the importance of this product for medical purposes. Thus governments have eased the norms and regulations that were surrounding this sector. Some countries have entirely allowed the use of Cannabis for medical and recreational purposes. Others have kept some laws to keep matters under control. (Refer to image 1 for brief information). The market for Cannabis is still unexplored, making way for businesses to tap this opportunity.
Every Government which has legalized Cannabis has defined some norms to get the license. It is clearly defined between "must-haves" (things that must be satisfied to obtain the license) and "Red Flags" (Things that disqualify an application). One of the foremost things to look out is that you must be a resident of the state where you plan to launch the cannabis marketplace. You must not have any criminal record in your name.
These requirements vary according to the country you are applying for a license. In British Columbia, any history with organized crime is considered a red flag. U.S. states like Washington require spousal background checks and deny an application if the spouse has a criminal history. So before writing a hefty check to cover non-refundable licensing fees, verify that you meet your target area's qualifications.
How do I start a business selling Cannabis?To start your cannabis business, the first thing is to register your business in accordance with the country, state, and local laws. You need a license or permit of the state that you are planning to locate your business in. The number of documents that you require is state licenses for selling cannabis products, permits for keeping products in specific locations, food license if you are planning to sell edibles. Before you pursue starting a business, make sure that you are fully compliant with the regulation and laws. Otherwise, you may face penalties. You will also need to build an eCommerce marketplace for the sellers and Yo!Kart is a perfect platform to sell Cannabis.
How do I market a Cannabis business?According to laws, you cannot market your business using Google Ads and Facebook ads. However, you can still market by creating pages on social media profiles and uploading regular updates on it. Devote time on improving the SEO of your website and invest efforts in other marketing activities like blogging. Though advertising on social media might be off-limits, some websites will still accept your display advertisement.
How can entrepreneurs learn cannabis laws?Beside researching thoroughly about the laws governing the cannabis industry, make sure that you invest in a reasonable attorney too. The attorney will educate you about the law applicable to your business. It is risky to enter the cannabis business without legal-guidance as the laws keep changing in this sector.
How do you start a cannabis transport or logistics business?If you plan to include transport and logistics in your cannabis business, then you need a cannabis transportation license. While some states have the rule that prohibits direct to consumer delivery, other states do not.
Select a Location: When you have made up your mind to start a CBD marketplace, one of the most important things to do is to select the location. As different laws govern the Cannabis industry, you have to be sure of the location where the business has to be set up.
In the United States, Cannabis is not legal at the federal level, but it is valid in various states, and you need to follow some rules. {Refer to Image: 1} The legality of Cannabis is segregated into various purposes like recreational, transportation, and medical. Some states allow medical Marijuana, whereas other states allow usage for both recreational and medical purposes.Before investing in a business, make sure that you know the state law of a particular city or area. When you are clear about the location, make sure you ask yourself these questions:
You should have a detailed answer for all these questions before you start a CBD marketplace as it will give clarity in your future goals.
When searching about the laws and rules governing the Cannabis industry in a particular location, also understand the trend that people search online when they want to buy Cannabis.
Search queries differ according to the location, so make sure that you do thorough research of the keywords to inculcate it in your marketing plan.
Business Model of a Cannabis Marketplace: The Cannabis marketplace will work just like Amazon. Following is a detailed explanation of the business model.
Registration: One way to make the customer journey seamless is by providing a quick registration process. The customers should be allowed to log in by email, social media, or phone number according to preference.
Smart Search: The number of products in the marketplace is a lot. Customers going through all the products to find the one which they need is a tedious task. To improve the user experience of the marketplace, make sure you have elastic search and filtering features.
Multiple payment gateways: When we talk about payment, customers usually are very sensitive as to which payment gateway they trust. A Cannabis marketplace should have various payment gateways.
Discount and offers: For every niche, a typical behavioral pattern is people visit those websites which offer discounts. To bring traffic to your business, make sure to offer discounts to the customers.
Reorder: Cannabis is an item that people would prefer to repeat. If the website from where a customer is ordering offers repeat orders quickly, it will attract the customer to the website more.
Dashboard: The seller wants to check the traffic and visits of the website to devise a strategy for future marketing. A Dashboard where all the information about sales, traffic, conversion, and revenue generated should be on the seller mobile app.
Manage customers: Managing customers and orders like checking customer's traffic, total sales per month, etc. through the seller mobile app should be easy
Manage Store: A Seller must be able to manage the store/shop page where a list of products that he is selling appear. Adding banner images or running advertisements on that page should be available for the seller.
Filter reviews: Check the review which has been added on the product and manage it accordingly. It is at the discretion of the seller if he wants to delete a particular comment.
Notifications : Sending push notifications to target buyers directly allows the sellers to market their product to the customers.
Inventory management: One of the most challenging aspects to handle is managing inventory across different channels. A seller lists their products on multiple channels, which is why it is challenging to check products in stock. Choose an eCommerce platform that allows your sellers to manage their inventory through a single dashboard.
Dashboard: a single place from where the admin can check different activities on the marketplace. The number of visitors, sales figures, and revenue generated are some of the aspects that the admin can check on the dashboard.
Manage payments: When an order is fulfilled, the payment is transferred to the admin for safekeeping in case of any refunds. After some time, the admin transfers the money to the seller after deducting the commission. To make the payment management easy, the admin can easily add money to the seller's digital wallet.
Multilingual and multi-currency : For the online CBD marketplace to cater to the global clients, it must be multilingual and multi-currency. The user experience of customers depends invariably on it, and the admin must consider an eCommerce platform that is multilingual and support multi-currency.
Blog integrations: As there are limited options for a cannabis business to market themselves, make the most of the available options. Make sure that you post regular blogs targeting the keywords and ranking on the search engine.
As researchers are finding out benefits associated with the use of Cannabis for medical purposes, governments of different countries are changing the rule to legalize Cannabis. This has opened an opportunity for business owners to explore into this new sector and start a CBD marketplace. As the industry is in its nascent stage, this is the time to strike with an innovative business idea. The information covered in this post will kick start the initial research before starting a business. For further queries, discuss with experts.
