Shopify, the second largest e-commerce platform in the U.S., is getting into cannabis. The Canadian company announced it would begin to offer merchants the ability to sell hemp-derived CBD products in 40 states as it attempts to cash in on the explosive growth in legal cannabidiol products.
Loren Padelford, vice president and general manager for Shopify’s high-volume platform Shopify Plus, told Cheddar on Wednesday that it was an obvious move for the company given its proven record of being able to scale its e-commerce functionality across various retail niches, from fashion to beauty to mattresses.
“We didn’t really get into CBD,” Padelford said. “CBD got into retail.”
Shopify surpassed eBay this year to become the second-largest e-commerce platform behind Amazon in the U.S. It counts mom-and-pop merchants, growing startups, and multinational brands like Budweiser among its customers. Shares of Shopify ($SHOP) are up more than 140 percent this year and the company has been on an earnings winning streak, most recently raising its revenue outlook for 2019.
Padelford said Shopify’s “size, scale, and trustworthiness” make it the ideal platform for merchants looking to move into CBD, or those who already sell it in physical locations but want to spread online. He said his colleagues have studied the regulatory market and intend to continue keeping close tabs on how the environment changes, since hemp is still a new business in the U.S.
“Like any other retail market, there’s going to be a lot of experimentation,” he said. “But we’re doing it at a scale beyond anyone else in the market.”