An Unexplored Profitable Sector: Online CBD Marketplace

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.

Segregation of Cannabis and Cannabis Products

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:



Why Invest In a Cannabis Marketplace?

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:

  • The North America Cannabis market was valued at $13.21 billion in 2018 and is expected to reach $36.7 billion in 2025
  • 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
  • The global legal Marijuana market is expected to reach USD 146.4 billion by the end of 2025
  • In the Cannabis industry, women hold around 36% of executive positions as opposed to only 15% in other industries.
  • A regulated dispensary averages about $3 million per year in revenue.
  • 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
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Here are a few more reasons why investing in the Cannabis marketplace is a good idea:

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.

Competitive Landscape In Cannabis Marketplace


FAQs About Starting A Cannabis Marketplace

What are the qualifications required for the license?

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.

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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.

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