If you’ve been anywhere on the internet in the last year, you’ve heard of CBD. It’s a non-psychoactive extract derived from hemp that is purified into an oil, applied to the skin or consumed for health benefits. If you’ve heard about CBD, you’ve probably also heard the controversies about whether it is the miracle oil your health routine has been missing or just a profitable fad for the people who invested early. Or, a mixture of both.
CBD is both a fad and a lifestyle option, and like anything that gets popular on the internet seemingly overnight, it has had some huge ripples in the e-commerce world. Let’s take a look at what CBD is and how it is impacting ecommerce.
What is CBD?
CBD, or cannabidiol, is the non-psychoactive extract derived from either marijuana or hemp. Psychoactive properties that we traditionally associate with marijuana are found in THC, which is completely extracted from the oil in the process. CBD has become the darling of lifestyle enthusiasts, food junkies, and even the medical community itself. It’s getting mixed into coffee and alcoholic beverages. In medical research, it shows promise for treating everything from anxiety and generalized anxiety to the complications of diabetes.
The legality of CBD is a bit complicated, as it can still be illegal under United States federal law. While CBD made from hemp is legal under the farm act, there is still a lot of question about using it as a food additive or the marketing claims made by businesses. Some businesses get into trouble over the unvalidated health claims they’ll make about CBD. Additionally, the FDA hasn’t quite approved cannabidiol and has warned that it is, in fact, illegal to include the stuff in dietary supplements, food, or beauty products.
The bottom line: if CBD is derived from hemp, it is now federally legal to sell, but you might run into FDA backlash depending on how you market it or tell your consumers to use it.
CBD and Marketplaces
Amazon still lists CBD as a controlled substance and won’t allow you to sell it outright, or even things containing it. Which can get confusing, because you’ll return plenty of results for “hemp oil” when you search “CBD.” It isn’t quite the same thing, but Amazon is protecting itself from FDA and federal regulations.
Still, CBD isn’t illegal to sell. Plenty of independent retailers have jumped onto the e-commerce gold rush of CBD oil and are selling it from independent websites. You can find CBD branded for about any audience you can think of, from coffee lovers to workout junkies. The Amazon CBD market could eventually be a huge business, even though it is crowded with hemp oil substitutes currently.
If you’re currently an Amazon seller, setting up an additional website and CBD business could mean huge profits in the future. If you’re both an experienced Amazon seller and an experienced CBD seller, then if Amazon makes CBD acceptable on its marketplace, you’ll be at the perfect intersection to capitalize.
Can I Legally Ship CBD?
As with any e-commerce business that sells physical goods, you won’t be able to make much of a profit if you can’t get your product to your consumer. CBD gets a little trickier in this category. The United States Postal Service did say in a memo that shipping CBD might be fine in certain circumstances. They don’t address FDA forbidden products.
Private companies like UPS and FedEx usually don’t have any problems shipping CBD oil.
How Much CBD Sells?
CBD sales in 2019 are expected to top a billion dollars. California itself has seen a ton of additional CBD product sales, with younger generations and silicon valley startups driving some of that growth. This means that if even 10% of those sales occur over the internet, then the CBD ecommerce sector is worth 100 million dollars. A lot of different companies could take a cut of that change and run extremely profitable businesses.
Is It Legal to Sell CBD on the Internet?
It is legal to sell CBD on the internet, but you’ll have to be careful about how you market it. Most uses of CBD aren’t approved by the FDA, you can’t really make any claims about what it can do for people. Sure, there is a bunch of medical research that has early-stage suggestions that CBD can have a bunch of health benefits. But you won’t be able to sell CBD as a proven anti-depressant or anti-anxiety drug, or even hint that it might do that.
Does CBD Make a Good Ecommerce Business?
It really is hard to tell if CBD is just a passing phase or a health trend with staying power enough to float a company for years. It’s definitely an internet and e-commerce darling, existing at the perfect intersection of marijuana culture (without being marijuana itself) and lifestyle culture.
CBD has a really important factor in e-commerce. You can get customers to turn into repeat purchasers. CBD oil is a consumable substance, meaning if the transaction goes well and the customer is happy with the product, you could sell to them 5-6 times a year. There are already a bunch of CBD subscription boxes that have popped up in the e-commerce world.
CBD Ecommerce Best Practices
If you think that CBD might be the market for you, check out our guide to starting an ecommerce business from scratch. You’ll also need to find a CBD wholeseller (not too difficult) and obtain any requisite licensing.
One of the big opportunities for CBD e-commerce businesses is to capture new sectors of the CBD market. Because CBD is such a versatile substance, there are plenty of new market sectors that haven’t been tapped. Figure out how to reach a new audience with branding that differentiates, and you could become profitable instantly. You’ll have to do your research on the CBD angles that exist, figure out the search terms that are being left on the table, and build a site that tries to capture those audiences. The market is highly competitive, and you’ll need to improve visibility to cut through the search competition and win customers.
Branding will be the most difficult part of any CBD e-commerce business. It’s definitely an area you should seek to invest in some branding and design.
Search Engine Optimization
Run terms like “CBD” and “buy CBD” through any analytics system you have, and you’ll see that searches for those terms are high volume and high competition. In a competition for CBD e-commerce, you’ll need to have a team help you create a search engine strategy to gain visibility and win the market.
Keep it Legal
You’re definitely allowed to sell CBD oil online. You’re not allowed to make extravagant medical claims or even modest medical claims. You’re not allowed to make cosmetic claims either. You’ll need to separate your advertising and selling.
Remember that CBD already has a reputation, and remember to be honest with your customers. If you can’t say that it has health benefits, remind them that you can’t say that it has health benefits but also point them to some of the research out there. The National Institutes of Health (NIH) is a government site that has a ton of free research online, and much of it is CBD-positive.
Currently, you can’t advertise for CBD using Google ads. A lot of traditional advertising routes may be skeptical of the CBD approach, so you’ll need some creative lead generation ideas to really gain a market.