Monday , August 3, 2020

UPDATED: Shopify Targets Merchants in The Fast-Growing CBD Sector

CBD is all the rage these days as a newly available medicine that can alleviate everything from pain to insomnia, and now e-commerce platform provider Shopify Inc. is pitching its payment and other support services to U.S. CBD merchants.

Ottawa, Ontario-based Shopify, which serves 800,000 merchants globally and has major U.S. operations, on Tuesday announced new platform features to help U.S. merchants sell hemp and hemp-derived cannabidiol (CBD) products online or in brick-and-mortar retail locations where permitted by law. Shopify said its services include payment, shipping, marketing support, and access to more than 2,500 business-services apps.

“Shopify has unmatched expertise in emerging industries, along with the resources merchants need to be successful in the fast-growing market of hemp-derived CBD products in the U.S.,” Harley Finkelstein, Shopify’s chief operating officer, said in a news release. “Shopify’s reliable technology and extensive partner network means that businesses can ride the wave of demand for these products and give consumers more choice.”

The company said it is working with several payments and shipping providers. The payments providers are Visa Inc.’s, DigiPay, and eMerchant Brokers, a spokesperson tells Digital Transactions News. “These payment providers help merchants accept transactions, both online and in-person, where it’s legally permitted in the U.S.,” the spokesperson says by email, adding that the CBD services will be available in 40 states. 

CBD is a non-high-producing derivative of the cannabis plants marijuana and hemp in contrast to THC, the high-producing cannabis ingredient. The 2018 farm bill passed by Congress late last year removed hemp from the federal list of Schedule 1 drugs as long as it doesn’t contain more than 0.3% THC, according to a Brookings Institution report. That action opened the market for CBD despite various legal restrictions remaining in place. Marijuana with its THC remains illegal under federal law, though 33 states have legalized medicinal marijuana and 10 now permit recreational marijuana, according to Brookings.

Shopify identified two of its CBD-selling merchants: Josie Moran Cosmetics, whose skin-care products include “Skin Dope,” and Cannuka LLC, another skin-care merchant. Shopify doesn’t have a specific marketing campaign underway for CBD merchants, but the spokesperson says “we’re focused on providing as much clear information on how Shopify can support businesses can start and scale their CBD business on our platform. We’ve shared information via social and content marketing to educate merchants.” 

Shopify already provides e-commerce services to a number of cannabis merchants in Canada, where marijuana became legal nationwide in late 2018. Those merchants include The Ontario Cannabis Store and BC Cannabis Stores, and licensed sellers such as Hydropothecary, Aurora, and Canopy Growth, according to the spokesperson.

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