eCommerce is the future of retail. Experts estimate that eCommerce will account for 15% of all retail sales worldwide this year. But thanks to stringent regulations and conflicting laws, it’s currently impossible for brands to sell cannabis products online to US buyers.
Canada, on the other hand, has taken a different approach. Since cannabis is legal at the federal level in Canada, brands are able to sell cannabis products online and deliver them to customers’ doorsteps—and businesses are making a killing. One Ontario cannabis store sold out of edibles just hours after opening its eCommerce shop. It’s clear that cannabis consumers want the convenience of online shopping, but current regulations in the US prevent that from happening.
Two issues, in particular, prevent dispensaries from selling cannabis products online: shipping laws and banking regulations.
Since postal services are backed by the federal government, which still classifies cannabis as a Schedule I drug, it’s currently illegal to put cannabis in the mail (even in states where it’s legal). And that doesn’t just apply to USPS: it’s illegal to mail cannabis through FedEx and UPS, too.
On the banking side of the equation, any FDIC-insured bank is prohibited from making loans or accepting deposits from cannabis companies. That means cannabis businesses have to secure banking with state-chartered banks, which can still be a challenge.
Even if businesses were allowed to ship cannabis through US mail, they would have no way to charge eCommerce customers for their purchase. Banks and payment processors currently refuse to service cannabis operations for fear of federal reprisal. Some businesses have tried to skirt the rules with Bitcoin and even pre-mailed checks, but the legal gray area holds more threats than promises.
There’s some promise on the horizon with the SAFE Banking Act, which would allow federal banks to do business with state-legal cannabis operations.
However, if federal prohibition ends in 2020, it could finally allow US-based cannabis operations to ship cannabis to customers through the mail.
eCommerce would bring so many opportunities to cannabis businesses. There would be no need for a storefront, which would keep costs low for operators. They could service more customers, especially those living in municipalities in legal states without dispensaries.
As it stands today, customers will still need to shop in-store to pick up their cannabis. But once legislators finally clean up the complex, tangled web of cannabis legalities, everyone stands to win: business owners, investors, and most importantly, consumers.
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