Shopify (NYSE:SHOP)—America’s third largest e-shopping platform has opened its doors for CBD retailers. This is amidst reports that the CBD market is expected to be a multi-billion industry by 2022. CBD merchants can now join over 800,000 merchants that use the platform.
Shopify consented to the sale of hemp and its related CBD products on its platform. CBD is short for Cannabidiol, which is a chemical compound available in the hemp plant and is a key ingredient in making various health-related products.
According to Shopify, CBD sellers in the U.S. can now create a store on Shopify, utilize its marketing tools and other applications to handle inventory management and logistics. Merchants can also customize shipping for their customers in various states, as this will help them remain compliant. This move by Shopify comes just shortly after its competitor BigCommerce, launched various tools for CBD retailers. Shopify Plus General Manager Loren Padelford said:
“It wasn’t that we had to adjust Shopify….It was this industry adjusted itself where Shopify made the most sense.”
Shopify Payments Will Not Support Purchases
While CBD merchants will be able to create an online store on Shopify, buy Shopify’s retail kit, use Shopify’s marketing tools and many more, the retailers will not use Shopify payments to conduct purchases on the platform. Padelford stated that Shopify is committed to supporting all CBD businesses to seek legal advice so they can maintain compliance with FDA regulations while adhering to the company’s use of the platform.
Padelford stated that Shopify had been thinking about this development for a while. The company is based in Canada, which legalized cannabis way back in 2018. All the same, Padelford said that Shopify was evaluating the situation, even as the U.S. moved through motions in which it passed the Farm Bill in 2018. The U.S. also legalized hemp and its related CBD products for sale and consumption. Popular CBD brands currently available on Shopify include Cannuka and Josie Maran.
According to founder of Cannuka, Michael Bumgarner, Shopify’s decision to support the CBD industry will push the entire category. He reiterated that the move by Shopify to support CBD merchants is a huge step in the right direction.
“With Shopify and other large companies leading the way, saying ‘We’re for this; this is happening,’ I see things changing even more quickly in the near future,” Bumgarner said.
Padelford added that Shopify engaged with brands such as Cannuka, (which has been operational since 2017) to discover what the CBD-allied companies require in terms of building a store or marketing.
Shopify stock price (NYSE: SHOP) currently stands at $331.07 per share, $325.85 live price, and -0.90% Change PCT in the last 24 hours.
To conclude, Shopify manager Padelford is optimistic that with CBD retailers on board, the platform will help them create direct-to-consumer and highly personalized experiences, as Shopify delves into CBD market.