The cannabis industry is growing at an accelerated pace. One of the companies that could benefit from such a boom is Shopify. The technology company announced this month that its doors are open to sellers looking for online platforms to sell products containing hemp or marijuana seed in the United States.
Over the next four years, the U.S. market for products containing cannabidiol (CBD) is expected to grow to $30 billion. However, these products must be derived from hemp, since only the use of the seed was legalized in the U.S. at the end of last year.
CBD producers in the U.S. such as Veritas Farms Inc. (OTC: VFRMD) demonstrate the benefit of online sales platforms. This company, which was established in 2015, have grown very quickly thanks to an aggressive online sales push and is trying to expand to other states. Their 140-acre industrial hemp farm and manufacturing facility is based in Pueblo, Colorado and allows to sell eight categories of high quality full spectrum hemp oil products.
Veritas Farms generated more than $2.9 million in total revenue by Q2 this year and that is a 500% increase in comparison to the same period last year. Their gross profits went up by almost 800% to $1,523,413.
The authorization of hemp products has been considered as a small step prior to the federal legalization of medicinal and recreational cannabis in the U.S., so companies like Shopify also have in mind to enter that market. However, for now the e-commerce platform considered the easiest to use for entrepreneurs should be limited only to authorized hemp products and thus avoid jeopardizing its prestige as a company listed on the stock exchange.
Therefore, cannabis producers from states where cannabis is legal, like a Washington state leader, Cowlitz, will have to wait for this opportunity a bit longer. Cowlitz has achieved significant results considering their relatively short presence on the market. They regularly report $4 million in quarterly revenue, and last year recorded a revenue of over $14 million in just five years of operations.
Cowlitz owes their success to the support of GreenStar Biosciences Corp. (CSE: GSTR), an investment company from Canada that identifies local cannabis players and helps them build value for investors. GreenStar is building a portfolio of such companies, in a bid to become one of North American most dominant cannabis stocks. If regulations catch up cannabis focused companies could become a huge line of business for Shopify.
In Canada, Shopify is the platform that more and more cannabis entrepreneurs are choosing to develop their online store. In fact, last year, when the sale of marijuana to the Canadian adult market was legalized, the company registered 100 orders per minute to register stores. With its recent announcement in the U.S., the firm confirmed that it will offer the same design and management tools available to Canadian cannabis companies.
Some of the tools that Shopify could offer in more than 40 states across the country include assistance in marketing, collection, shipping and design of virtual stores. Precisely these qualities make Shopify an attractive platform for its simple use that makes it easy for any user to sell products online quickly and simply. This reduces the expense that a small business could spend on programmers to build e-commerce sites.
Companies like Charlotte’s Web already benefit from the opening of the hemp market and have their products in thousands of stores across the United States. That’s why firms like Shopify will also take advantage of the business opportunity.
The relationships that are being built with these new companies that develop hemp products could pave the way for the U.S. to speed up the opening and regulation of marijuana.
In the U.S., the legalization of recreational cannabis has already reached 13 states, while in Canada its medicinal and recreational legalization was granted since October 2018.