Software and the Cannabis Industry - A tool for competitive advantage

According to a Retail Dive report, the global cannabis market has reached $150 billion, and by 2025 legal cannabis will encompass 77% of the market, or $166 billion.

The cannabis industry is growing at an incredible pace. Led by states like Colorado and Washington, that voted to legalize recreational marihuana in 2012 and picking up a lot of steam when a giant like California passed Proposition 64 in 2016. Now the industry got a new impulse, In a clean sweep of all marijuana legalization ballot initiatives, voters in Arizona, New Jersey, Montana, and South Dakota approved recreational marijuana sales, and voters in South Dakota and Mississippi approved medical marijuana sales in the 2020 election.

Once the measures are implemented, 15 states will allow recreational marijuana sales, and 25 will allow marijuana to be sold to patients with certain medical conditions.

That means a third of Americans will live in states that allow recreational pot use, and almost three-quarters of Americans will live in states that allow either medical or recreational use.

Just a decade ago, no state in the US had a legal recreational use program in place, with just over 30% of U.S. adults believing cannabis should be made legal, according to a 2019 study by the Pew Research Center. Fast forward to 2020, nearly 70% of U.S. adults believing cannabis should be made legal.

With all these rapid changes in such a dynamic and 'new' industry, it's clear that there are great business opportunities in the near-term for those that get it right. As in any booming industry at its early stages, the possibilities are endless, but this also means that there will be winners and losers. Having this in mind, as is the case with just about every industry that is going through a digital transformation, software will be a key factor for success. The great thing about the cannabis industry is that there are no legacy platforms to worry about, no costly technological transitions, so cannabis executives can be as disruptive and bold in their implementation of software as they wish, and won’t have to break the bank to build great apps and sites around their offerings.

Let’s go over some of the areas where the correct implementation of software solutions is important to your success.

Cloud services

Are you in or looking to get into the medical marihuana field? HIPAA compliance is a must.

As we know, the medical cannabis industry must be diligent about abiding by federal law and so, relies on medical patient verification systems. These systems contain protected health information (PHI) such as medical record numbers, patient contact info, diagnosis codes, and other personal information used for a person's verification.

It’s important to understand that if you are in the medical marihuana field you MUST host all user data in a HIPAA compliant data center. Having your client’s personal data and medical records data on-site or in a typical, non-compliant server location is a BIG violation of HIPAA. If you are concerned or think your data storage solution is not in compliance, you should be aware that violating HIPAA data security regulations is a serious crime and can include fines for the violator. Understand the differences between standard web hosting vs. HIPAA compliant hosting to ensure that your data storage and cloud services provider is in compliance.

Payment processing

If you are in the cannabis business it’s important to understand some hurdles that might still exist at the time of processing credit card payments for your products and services. Medical Marihuana dispensaries are, as we know, obligated to comply with HIPAA regulations, this means you are required to keep confidential all of the PHI that is collected during a customer transaction. Of course, when accepting credit card payments completely restricting the transaction information is not possible. It’s important to understand that in recent years Mastercard, Visa, and every other credit card provider has restricted payments for cannabis via their payment network or have made the processing cost so expensive as to make it infeasible for you to accept credit cards. This is because although cannabis is legal in many states, it’s still not legal at a federal level.

A lot of dispensaries are taking the risk and accepting credit cards, but that comes at-your-own-risk. So what's the alternative?

You must leverage every other payment option and integrate them into your checkout process in the most fluid way possible.

These include:

- ACH or bank transfers - By leveraging services like CanPay you can accept ACH transfers, which are electronic and in real-time, so you can verify a payment on the spot. ACH or bank transfers are simple, secure, legal, and reliable.

- Prepaid/Debit cards - Debit card processing has emerged as the most stable middle-ground for cannabis businesses because it’s reliable, compliant, drives better business, satisfies customers, and has the benefit of being a touchless/cashless transaction.

- Cryptocurrencies - Well this option seems to go hand-in-hand with the industry right? The growing adoption of crypto is also a big reason to look into implementing them into your payment flow. Using crypto as a payment solution in your dispensary seems like a win: all-digital, anonymous, and seemingly secure.


Setting up an eCommerce solution for your cannabis business is not as easy as in other industries. Cannabis businesses require extra steps at checkout to ensure the legality of each transaction: creating a login for the website, confirming age and identity by providing a copy of photo ID, phone verification for delivery orders, etc. All of this while making sure you still offer a seamless shopping experience so that your clients don’t abandon their cart at the last minute.

So what are the alternatives? Self-hosted or SAAS?

Self-hosted (WordPress)

WooCommerce is one of the top e-commerce platforms designed specifically for WordPress. With plenty of customizability and a lot of different options, this can be a solid platform when it comes to setting up your e-commerce store. There are plenty of big e-commerce stores using WooCommerce. WordPress’s straightforward, simple interface and WooCommerce’s alternatives can make for a powerful combo.

However, without expert web designers, WordPress sites can become a little bit limited. Best practice when it comes to setting up a site can be a little bit complex and making sure that your site is as optimized and powerful as it should end up being a job best left to the experts.

SAAS (Shopify, BigCommerce)

The other major option is SaaS (Software as a Service). The two best SaaS platforms for CBD out there are Shopify and BigCommerce. These platforms boast some pretty huge e-commerce businesses among their users, powering some of the world’s most successful brands.

Designed for the less technically skilled to be able to create, customize and optimize their own e-commerce stores. The biggest risk when it comes to a service like BigCommerce or Shopify is simple. As you pay a monthly fee and don’t own the software, if they were to suddenly shut down their services because of regulations or compliance issues, you’d need to transfer your site over to another service.


Today we went over some areas that cannabis businesses need to be on top of. These are Cloud services and HIPAA compliance, Payment processing options to keep your competitive edge, and eCommerce alternatives to have a seamless and effective online presence. Getting things right in these areas can make all the difference and working with great tech solutions can differentiate the winners from the losers in the upcoming months and years.

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