E-commerce can bring many efficiencies to a retailer's operations, but in the legalized cannabis industry, payments must still be handled offline.
This places marketing automation provider Baker in the odd situation of launching a white-label e-commerce platform for marijuana dispensaries that will provide tools for pre-ordering, pickup and delivery — but not payments.
So what does the platform's "Buy Now" button actually do?
"Currently, the Buy Now button is a fast track to the shopping cart, allowing the customer to quickly add product to their basket and proceed to the last step of the order flow with one click or tap," said David Champion, Baker's co-founder and chief product officer. "The payment transaction, for now, still happens during pickup or drop-off."
Calling it the "Shopify for Cannabis," Denver, Colo.-based Baker developed the Shop platform to give marijuana retailers and dispensaries an e-commerce solution that can handle pricing by weight, medical ID verification, point-of-sale integration and state ordering and tax limitations.
More than 100 marijuana retailers across the country are already using Shop, and Baker also works with 250 dispensaries across Arizona, California, Colorado, Connecticut, Hawaii, Nevada, New Mexico, Massachusetts, Oregon, Washington and Ontario.
Lawmakers and legalized marijuana supporters alike have broached the topic of resolving the pot payment process, which is often handled by cash or by convoluted systems that avoid traditional card network rails. Today there are closed-loop card schemes through partnerships with state or local governments, establishing a tentative relationship between banks and marijuana sellers.
But because of the inconsistent legal standing that marijuana dispensaries face, Baker and other vendors have taken a cautious approach to handling payments in the medical and recreational marijuana businesses.
"There are no fully approved payment processing companies for retail cannabis products," Champion said. "There are several services operating in the gray area of the law and, in many cases, offering a service that is convenient to the customer."
Champion prefers that his company prioritize legality in all phases of its product decisions and thus is "willing to be patient until a fully authorized payment processing service becomes available," he said.
When that happens, Champion is confident his company will quickly integrate full payment functions for customers of marijuana retailers and dispensaries.
In the meantime, Champion has had a formidable task in simply setting up an e-commerce platform at Baker for the marijuana business.
"Almost all dispensaries operate offline only," Champion said. "The hurdles in setting up any kind of online retail have been extremely high."
Some of those obstacles center on medical vs. recreational pricing differences, and the frequency of product turnover. In making Shop a custom-built platform, Baker had to address all of these factors unique to retail marijuana.
Shop is available in all regulated states for both recreational and medical marijuana sales. It has been launched in 12 states and British Columbia and Ontario in Canada.
Because of various regulations in each state, Baker built a "business rules engine" for the Shop platform that allows separate configurations for each state, while assuring any dispensary in those territories adopts the proper adjustments.
Baker is careful not to make any sort of political stand as it relates to the legalization of marijuana, though Champion acknowledges "the medical benefits finally being proven through research can't be ignored, especially in a culture that has become reliant on potentially harmful pharmaceutical drugs."