‘To weed or not to weed’: Starting Online Marketplaces For Cannabis
With increasing legalization, the cannabis industry is hot at the moment. Many entrepreneurs already entering the online marketplaces for cannabis discovery, order, and delivery. Find out more about the opportunities in the cannabis industry and how online marketplaces for cannabis are offering ultimate customer delight.
It seems like only yesterday that the struggle for the legalization of Marijuana started rolling. Poof! And just like that, ‘Marijuana’ has taken the world by a storm. The world is at strange crossroads today; where a strand of the society believes in the positives of marijuana, while the other thinks marijuana is destroying the society; one bud at a time! There is just too much smoke around the topic. So, let’s try understanding what started the fire and what fuels it.
A lot of new states have been welcoming the legalization of cannabis. There is a strong push from the market to make cannabis legally available. The perspective is that legalization might help curb the crimes leading out of underground markets for cannabis. Chris Walsh presented his findings of the growth in Cannabis Industry at The Marijuana Business Conference and Expo earlier this month. In his speech, he said that the retail sales of medical and recreational marijuana are expected to hit $8 -10 billion in 2018. That’s a steep 50% increase from 2017.
The demand for Cannabis, if legalized could amass a whopping $52.5 billion, which is much greater than the demand for cigarettes in the country. In 2017, sales of cannabis were almost same as Netflix subscriptions and in 2018, it is forecasted to be equal to the sales of McDonald’s. To give this a perspective, cannabis industry could make $28-30 billion in 2018 which is greater than the GDP of Bolivia. That’s a huge market!
Today Medical Cannabis is legal in 30 states in the US and District of Columbia and 9 allow recreational use, but the drug is still illegal at federal level. This week, business owners and members of the National Cannabis Industry Association reached out to Capitol Hill to legalize marijuana, or at least certain banking and tax laws. Canada is capitalizing large due to this situation in the US. Canadian companies can export abroad to multiple continents, making them one of the first companies signing international cannabis trade deals.
Although the growth is slow in the US, the opportunities are plenty and many small and medium businesses are cropping up to capitalize on the growing market. The industry has been creating jobs and opportunities. The cannabis industry is currently creating 125,000-165,000 employees. Walsh said,” To put this into perspective there are potentially more full-time workers than there are librarians or kindergarten teachers throughout the country.”
Tapping Into Online Marketplaces
Majority of online marketplaces for cannabis are targeting customers with apps which let you browse from nearby dispensaries, order, make payments and have them delivered to your doorsteps as quickly as possible. The growing consumer demand, Geographic limitations, and quick order fulfillment have opened new avenues for a lot of hyperlocal marketplaces for cannabis. In a previous article, we also detailed a few simple steps to start your own online dispensary. Although the basic offering of most online marketplaces is order management and delivery, newer marketplaces are trying to offer something extra to target their audience. A few examples of online marketplaces for cannabis are
- greenRush: greenRush is considered to be one of the dominant players in cannabis delivery. It currently services California, Colorado, Nevada, and Oregon. With the recent rounds of funding, it plans to expand to several more states in 2018.
- Eaze: Eaze used to only deliver medical marijuana in San Francisco region but will take effect in California post-legalization.
- Meadow: Meadow differentiates itself from other online marketplaces for cannabis by developing tech solutions for the marijuana industry. It has an app called Meadow MD which connects patients and doctors for evaluations.
- Grassp: Like Hospitals and Medical centers, they focus largely on the security of medical marijuana patients and their records.
- Jane: The California based start-up focuses on personalization via data analytics and real-time updates on the dispensaries’ products.
- Say Hi: One of the latest entrants into space, Say Hi is a highly edited online marketplace. Here, consumers can find sophisticated, design-minded cannabis products that you can’t find at your local deli.
Exploring the B2B Space
The B2B side of marijuana is comparatively less explored but also more difficult to get into. Leaflink, a 2015 start-up from New York, calls itself the “industry standard whole management platform” for cannabis. An Online trading place for cannabis producers and retailers, Leaflink facilitates a business which has been running through brokers since the early 1930s. Another marketplace, Confident Cannabis, offers solutions for growers, sellers, and labs so that you know exactly what you are smoking. They are creating software for labs that tests and tracks potency of the cannabis.
The space, however is not very favorable due to a lot of obstacles. Existing brokers and other businesses rely on the offline network. This has led to the shutting down of a couple of large B2B marketplaces. Tradiv was started by a military vet who wanted to develop the “Amazon for Cannabis industry”. He said that the broker business is good for illegal markets but not so good for scaling businesses.
In its 2017 report, Cannabis Business Times called the cannabis industry, the fastest growing business in the US. And the data continues to show an increasing curve. With legalization picking pace, this is the right time to enter the industry and capitalize on the growing demands.
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Do you want to start a marketplace and cater to the ever-growing cannabis industry?
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Check out our Online Marketplaces for Cannabis and find the best solution to your cannabis order management issues. Now explore features like inventory management, private marketplace, secure payment gateway integration and much more to create a customized marketplace for users to browse and order from their local dispensaries.