Legal cannabis is one of the fastest-growing industries on the market—and it’s not just about the product. With an expected expansion at a CAGR of 25.4% from 2023-2030, the global legal marijuana market offers stunning potential. As buyers connect with dispensaries, they highlight a ton of opportunities for business expansion: custom eCommerce development.
Marijuana apps are already popular with discerning clientele. The ability to properly research cannabis strains, connect with community, and trade product recommendations is invaluable. However, it’s time to expand beyond user experience. Software developers have a unique position in this growing landscape: the ability to streamline an entire industry end-to-end.
Merging business and organizational aspects with client data protection and HIPAA compliance—not to mention legal regulations—is vital. Dispensaries are looking for a “one-stop-shop” approach to business development. How can software teams fill the gaps in the industry and support symptom relief for millions of Americans?
To find the answer, let’s first talk a little bit about the industry itself.
The history of marijuana, also known as cannabis, includes fascinating insight into American legal structures and regulations.
Cannabis has been in North America since the 1500’s—likely brought over by Spanish colonists. However, the origins of cultivation date back thousands of years. Human uses span from medicinal to spiritual to recreational and everything in between.
The plant was exclusively called “cannabis” until the early 20th century. In the late 1920s, Prohibitionists started using the term “marijuana,” a form of the Spanish word for cannabis. The goal was to turn the public against both the plant and the growing Mexican-American population. This culminated in the 1937 Marijuana Tax Act, which effectively banned sale by imposing heavy taxes on growers and sellers.
Nixon’s 1970s-era “war on drugs” classified cannabis as a schedule 1 drug, alongside heroin, cocaine, LSD, and ecstacy. This decision ignored the president’s commissioned library study, which found low use risk and suggested lesser penalties for cannabis-related crimes.
1996 saw the introduction of the Compassionate Use Act. Through this Act, California became the first state to legalize medicinal cannabis use. The late 1990s and early 2000s saw widespread acceptance of legalized medical cannabis, with 16 states following suit by 2010.
In 2012, Washington and Vermont made headlines by legalizing recreational use.
2018 brought significant change: the Canadian company Tilray began trading on NASDAQ at $23/share. As of 2023, 24 states and Washington DC have legalized cannabis use, with another seven decriminalizing low-level possession. We’re entering an era of unprecedented access and commercial value surrounding cannabis, combined with incredible potential for industry improvement.
The high demand comes with challenges: how do dispensaries navigate changing legality and restrictions? What provisions need to be in place to support medical marijuana vs. recreational users? Where’s the line?
This is compounded by the variety of strains on the market and differing regulations for cannabis products. Cannabis contains two main compounds used for healing and recreation: CBD and THC. CBD is non-psychoactive and used primarily for relaxation. Its use is legal even in places where other cannabis products are not. THC, by contrast, is the psychoactive component, inducing drowsiness as well as mind and body highs. THC is a highly-regulated substance and the main source of controversy.
Dispensaries and consumers juggle different products, different ratios of CBD:THC, different strains, and different restrictions for all. How can innovative eCommerce app development advance the industry and support small businesses?
So, where do we go from here? Cannabis use is widely legal, but the buying and selling processes aren’t optimal for consumers. The solution is clear: software developers have full creative control over end-to-end process development that will revolutionize the industry.
Picture the ideal eCommerce platform. At the moment, most marijuana apps are limited to item descriptions and perhaps advance orders. A much better option would be a “one-stop-shop,” fully customizable for dispensaries and buyers alike. The platform should have user-friendly navigation, secure payment processing, inventory details, and integration with shipping carriers for efficient order fulfillment. No more waiting in hour-long lines!
Having a reliable inventory management system, especially, is crucial. It helps ensure that popular products are adequately stocked and that the company can manage its supply chain efficiently. When it comes to legal cannabis distribution, it goes even further. Keeping tight and demonstrable control over your inventory helps dispensaries avoid sticky legal situations.
The right software can help retailers and manufacturers effectively manage their inventory and abide by the law. Providing real-time tracking of stock levels, expiration dates, and product variations is essential in this market. Dispensaries need to balance stocking the right products with avoiding excessive inventory.
And it goes even deeper! A solid presence through easy-to-use eCommerce platforms can expand the reach of retailers and growers beyond their physical locations. It’s a great dispensary marketing tactic; consumers are always looking for the least complicated experience.
Incorporating eCommerce apps into the cannabis industry has another benefit that isn’t widely discussed: data security. In the future, integrated Point of Sale systems (POS) should not only streamline the checkout process, but also ensure legality. Advanced POS tech will be able to verify identity and age for regulated products and quantities. This paves the way for delivery services—an option that is not yet available.
In order to provide delivery, eCommerce POS systems would have to access and protect consumer data. This would have to be a subtle, yet complicated feature of any dispensary app. The challenge for software development teams is to create a two-database approach on a single platform.
The legal difference lies in the buyer’s intentions: are they a medicinal user or a recreational user? Recreational users are easy: they’re typical customers with typical data protection needs. Their personal and payment data must be safe and encrypted—but not to the extent needed by medicinal users.
Medicinal users have different (often higher) quantities available for purchase and sometimes a wider variety of strain choice. They’ve evaluated their medical needs with a doctor, who’s provided a prescription. For medicinal users, cannabis is a prescription drug that they happen to be able to acquire at a regular dispensary. This means that dispensary POS systems also have to abide by HIPAA regulations for these users, specifically.
HIPAA, the Health Insurance Portability and Accountability Act of 1996, lays provisions for the protection of PHI: Protected Health Information. PHI includes anything that can be used to identify a patient, including names, ID numbers, addresses, prescription details, etc. In order to be effective, a dispensary eCommerce app would have to operate with pharmacy-grade software and data encryption.
Regardless of whom it’s serving, all dispensary software needs a robust back-end security system for data protection. With different regulation needs for recreational and medicinal users, it makes sense from a cost perspective to keep separate databases. It would be significantly more expensive to hold all users and their data in the highest-security system. Having a separate, less “intense” database for recreational customers frees up more space for medicinal users and their needs.
Keeping customer data safe is arguably the most important aspect of an eCommerce app—but what about customer experience?
This is another world of opportunity for software developers looking to work with dispensaries. The options are limitless: branded apps with real-time customer feedback, VIP programs, rewards, and discussion forums are a few examples. These features enhance engagement and promote brand loyalty. A mobile dispensary app should ideally take care of not only the back end of the business but the clients too.
There are additional, practical reasons for making apps as user-friendly as possible. Monitoring the data collected from your users can provide valuable insights into customer behavior, trends, and product performance. This helps the company make data-driven decisions and refine their product offerings.
Analytics software can fully break down sales data, customer feedback, and market trends to help create a comprehensive retail strategy. Dispensaries can leverage this information to identify best-selling products, optimize pricing strategies, and make data-driven decisions to grow their business.
Customer Relationship Management (CRM) systems can’t be overlooked either. They support recreational consumers, their preferences, and their order history. This data can be used to personalize marketing efforts, improve customer support, and enhance buyer retention. Dispensaries can tailor their products and services to meet specific needs and improve customer satisfaction, quickly and easily.
It’s one of the most important tasks in any dispensary: keeping up with the ever-changing regulations at state and federal levels. In the health industry, especially with alternative health products like cannabis, regulatory compliance is essential. Software that assists in managing and monitoring compliance simplifies this process.
Product labeling, batch testing, recordkeeping, and packaging requirements are just four areas in which dispensaries must be compliant. Employee training is another crucial point. Everyone who works at the dispensary, from stock to sales to customer service, must comply with state and federal standards.
Software developers can come to the rescue again: creating systems to facilitate standardized training and track certifications. In order to build any solid business, dispensaries need this level of support. Incorporating tech into their everyday operations is a no-brainer.
The question is, “who’s going to do it?”
With so many opportunities for streamlining the industry, the future’s never been brighter for software teams with a goal. It’s not only about creating a solution; success lies in releasing a top quality product, done right the first time. To do this, you’ll need experts on your side.
Jobsity staff also operate in your time zone (or close to it), so they can work alongside your in-house team. This makes communication simple and effective—as though you were working with local hires. No more 3 AM meetings!
There’s never been a better time to develop your software, build your business, and change the industry. Book a call to get started today!
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Donna Kmetz is a business writer with a background in Healthcare, Education, and Linguistics. Her work has included SEO optimization for diverse industries, specialty course creation, and RFP/grant development. Donna is currently the Staff Writer at Jobsity, where she creates compelling content to educate readers and drive the company brand.