Updated: February 2022
On January 1, 2019, the 2018 Farm Bill removed restrictions on selling CBD online as long as it is derived from hemp plants.
CBD, or cannabidiol, sales are expected to reach nearly $80 billion by 2030. With that much money on the table, it’s no wonder Shopify CBD stores are popping up everywhere as everyone tries to get their share.
For the small business owner, branching into CBD-related sales in their Shopify store (or launching a new CBD store from scratch) seems like a natural choice--but there are a few things you should know first.
Shopify CBD Requirements
It should come as no surprise with a substance like CBD, but Shopify has to cover themselves on the legal side. The first thing you’ll need to do is fill out the “Attestation for the Sale of Hemp and Hemp-Derived Products.”
This form basically says that as a seller of CBD products, you will abide by all Federal, state, and local laws as they pertain to these sales. It also indemnifies Shopify, which is a fancy way of saying that if you run afoul of the law, you can’t turn around and blame Shopify for it.
It also means that it’s your responsibility to keep track of the CBD related laws relevant to your target sales areas.
Legislation like this is a moving target. It's entirely possible that states may backtrack and repeal the existing laws. If you're opening a CBD store on Shopify (or any other eCommerce platform), be sure to keep up with the rules.
Which States Allow CBD Sales Online?
As of February 2022, you can legally sell CBD products on Shopify in all 50 U.S. states, so long as the products are hemp-derived (as opposed to marijuana-derived) and contain less than 0.3% THC. Huzzah!
It's definitely worth noting, though, that there are some states with extra restrictions. (Every party needs a pooper and all that.)
Shopify expressly states that they are not responsible for informing CBD shop owners if there are any changes in the law. That responsibility lies with you.
Marketing CBD Online
CBD containing less than 0.3% THC became federally legal long before all the states caught on. What this means is that the Drug Enforcement Agency (DEA) gave up their control of the sale of these products. Instead, the handling has passed to the Food and Drug Administration.
The FDA has not approved CBD as a medicine (except for a single prescription drug, Epidiolex), or as a food additive or a dietary supplement. As a result, you’re technically not supposed to market CBD by making any health claims or add it to food or drink. That remains illegal at the Federal level.
That said, you can sell cannabidiol and hemp products as such and ship them to any customer within the United States.
The laws surrounding selling CBD online can be extremely confusing. Many sellers choose to retain a law firm that specializes in “cannabusiness” to keep themselves abreast of all of the laws and how they pertain to them.
Shopify CBD Payment Processors
The last major component of selling CBD products on Shopify is how you accept online payments. With cannabis-related products, several banking laws have strange effects on who can take payments and who can’t.
Federal law forbids banks from taking money involved in the marijuana industry. That law makes payment processors uneasy when it comes to handling funds as well. You can’t use Shopify’s in-house payment processing, Shopify Payments, either. (And in case you’re wondering, yep, PayPal put the kibosh on CBD payment processing as well.)
Finding a payment solution that will deal with online CBD sales can be challenging, but not impossible. You just have to go through an outside payment vendor that integrates with Shopify.
Shopify currently recommends two CBD payment processors - DigiPay and Sezzle.
But getting approval from these third party merchants isn’t as easy as signing up. For DigiPay, you must provide test results from an independent lab that demonstrate your CBD products don’t contain more than the 0.3% THC concentration as allowed by Federal Law. You’ll also need to submit photos of your product and inventory.
For our Shopify CBD merchants (and all merchants really!), we love to refer them to a third option: Sezzle, a convenient and CBD-supported payment solution. This innovative approach to sales growth allows customers to split up their total purchase into four interest-free payments--lowering the objection to purchasing.
Best of all, for Tako readers only, Sezzle is currently offering a FREE 30-day trial. Just enter code SZORNYO at checkout.
Click here to see how Sezzle can help you close more sales.
For CBD companies offering subscriptions, we recommend Pinwheel, which is the only payment processor that supports recurring billing for CBD products!
Selling CBD On Shopify: Is It Really Worth It?
Many ardent CBD proponents claim that it can prevent, diagnose, or even treat cancer, diabetes, Alzheimer’s, and even psychiatric disorders.
Officially, the FDA prohibits CBD sellers from making any claims about efficacy in treatment. Additionally, because CBD is now in an FDA-approved medication (Epidiolex, used to treat Lennox-Gastaut syndrome and Dravet syndrome), it can't be used as a food additive.
However, the fact that CBD has been approved as medication shows that it does have some definite and clinically proven effects.
In 2012, a research team published a study in the Journal of Experimental Medicine that showed cannabinoids are highly effective in treating neuropathic pain and inflammation.
It also notes that marijuana has been used to treat neuropathic pain for centuries, but the psychoactive components of THC make it a problematic solution for many. However, because CBD has low amounts of THC, it avoids those side effects.
Currently there is a boatload of studies examining the efficacy of CBD, particularly for insomnia and anxiety. One oft-cited study concluded that CBD was effective in treating anxiety and insomnia in a ten-year-old girl suffering from PTSD connected to a sexual assault. Earlier attempts with standard pharmacotherapy were only partially successful, while CBD was a fully effective treatment.
There is no doubt that CBD has many great benefits. However, because this is such new ground for regulatory agencies, knowing what you can and can’t legally say in marketing is tricky.
Congress is currently pushing the FDA to make changes in CBD regulations, in part because of public demand. The next few years should be interesting, as the Federal government takes a more firm position on the legal and marketing status of CBD as a supplement and food additive.
All The Toppings
As more states change their laws regarding the sale of marijuana-derived CBD products, the landscape for online CBD sales will continue to change as well. With many states having already legalized medical--or even recreational--marijuana and several more on the cusp of doing so, you can expect to see even more potential markets open up. As the banking industry catches on to the potential windfall that CBD-related money represents, their desire to stay on the sidelines will fade as well.
The biggest challenge for you as a Shopify merchant is staying abreast of these changes.
Setting up your Shopify CBD store and developing a marketing strategy that’ll separate your products from the ocean of other CBD-related goods can be an equally daunting challenge.
Contact us to see how we can help you get up and running faster.