The CBD industry is booming in the United States!
Sold in pill form, oils, tinctures, CBD infused edibles, creams, lotions, and even in bottled water, coffee, beer, and cosmetics, CBD is already in hundreds of products on the market. And that could soon rise sharply, in part because of recent changes in federal law that allow U.S. farmers to grow hemp legally.
At the same time, more states are legalizing marijuana itself for medical use and, increasingly, for adult recreational use.
A recent survey says 85% of the people are aware of CBD, and one of the five surveyed have tried or are currently using CBD products. Surprisingly, 60% of consumers are okay with paying more for a CBD infused or a specialty product.
The growing awareness amidst people and the legalization has changed the fortune of companies as CBD sales are expected to rocket to $20B by 2024.
CBD Online Payment Processor Challenges
Despite its growing popularity, selling CBD online is still surprisingly difficult.
While the stats seem sweet, the challenges associated with running a CBD Online Store don’t say the same.
Especially, the problem with setting up a payment gateway for a CBD online store comes with a few complications, as some popular portals don’t agree to the terms. Cash on delivery, however, does not look like a popular option for this business currently.
Top payment gateways are still in a crouching position when it comes to the CBD Industry.
PayPal, a leading service provider says, “PayPal currently does not permit the use of our payments platform for the sales of products containing Cannabidiol (CBD).”
Stripe does not directly say CBD, but it is implied in their statement. “Cannabis dispensaries and related businesses,” “products and services with varying legal status on a state-by-state basis,” and “products that make health claims that have not been approved or verified by the applicable local and/or national regulatory body.”
Square, another company which provides PoS and credit card processing, also majorly restricts CBD products, as they said in January 2019: “CBD and Hemp products are still not supported on Square’s platform due to the obligations we have with card networks, and other financial institutions.”
However, in May 2019, Square started to work with a few CBD Merchants to come up with an optimal solution, and all one can expect is more legal clarity so that many more payment gateways join the fray in scaling up the CBD economy.
Not just the ones mentioned above, but other leading payment gateways too have apprehensions when it comes to CBD products.
What Can CBD Companies Do
While top payment gateways have closed their doors to restrict CBD companies from using their platforms to transactions, another study says by 2022 as much as 41% of US hemp-based CBD sales will be made via the Internet or other direct means.
Federal restrictions on cannabis make it tricky to collect payment for CBD products, due to the fact that cannabis banking services are not yet available.
Not just payment gateways, but even leading eCommerce platform providers take a step back when it comes to building online stores on their platforms. Things are progressing slowly, which is indeed a good sign.
The market can move up slowly, but companies cannot wait until the time is ripe. In this rapidly changing competitive space, CBD companies must make crucial decisions and act quickly to make their presence felt in the industry.
Irrespective of all the legal tussles and confusions, sales have started to soar. Similarly, a few eCommerce agencies are equipped enough to build online CBD stores in compliance with all the legal formalities by setting right the Online Age Verification process for CBD products, and yes – Online Payment as well.
DCKAP has rich experience in building top-class CBD online stores and has also successfully set up Online Age Verification and integrated Payment Gateways for CBD Online Stores with the help of third-party apps. The results have been phenomenal.
A CBD payment processor can provide the perfect tailored solution for your business, while eliminating the hassles associated with administrative tasks, accounting and business upkeep.
Advantages of having an Online CBD Store
Just like brick and mortar stores, an online store has its share of benefits. Take a look at the perks of what would be the most probable solution to increase CBD sales – by setting up an online CBD store.
- Break the physical barriers
- Keep newer customers coming in
- New sales options like dropshipping, fulfillment, etc.
- Lower the costs of operations
- Give personalized customer experience
- Minimum investment, maximum ROI
The list is endless, and just like any other industry, the day is not so far off before CBD companies conquer the tech space by making their products available online. This is the right time for CBD Companies to venture into the online space. Explore more about our CBD services, and get in touch with us to get your payment integration done, and all the things you need to uplift your CBD Online Store.