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US-based CBD shops that used Shopify to support online sales are still dealing with the fallout weeks after the e-commerce platform suddenly removed sites it deemed non-compliant.
The move has left many businesses scrambling for alternatives. And some fear that will lead to a contraction in availability as smaller businesses struggle to adapt.
Even for those that managed the transition, the speed of change was surprising. “The front end was just gone. I woke up one day, and it was just gone,” said Ben Boyce of Fort Lauderdale, owner of several CBD businesses and Buy Delta 8 Online, which deals in hundreds of brands. “It literally crushed my business,” Boyce told CBD-Intel.
He said many other business owners were facing the same challenges. “They straight up shut it off. They’re shutting them down one by one,” he said.
Another CBD seller, Humankind Herban Farmacy in Austin, Texas placed a notice on its website saying its virtual business was closed due to Shopify’s crackdown.
“As the cannabis legislation landscape changes we’re sometimes caught in the crossfire, and we’ve recently taken a hit,” the website says. “Shopify has removed our online store without notice, even though we had been compliant with their requirements to sell products online. We’re working quickly to resolve this and get the HumanKind Herban Farmacy online storefront back up and running.”
Why Shopify said it closed account
The notice refers customers to the company’s bricks-and-mortar business.
Boyce shared an email from Shopify that said:
“Dear Account Owner,
It has come to our attention that you are using your Shopify account, reefcanna.myshopify.com, to sell Delta-8 tetrahydrocannabinol (THC) products containing more than 0.3% THC.
Unfortunately, due to applicable laws and regulations in the United States, Shopify’s policies do not currently permit merchants to offer for sale products containing more than 0.3% THC regardless of compound type (e.g., delta-8, delta-9, delta-10).
The below products have been removed and cannot be reposted (this may not be an exhaustive list):
https://reefcanna.com/collections/delta-8-products/products/delta-8-thc-vape
https://reefcanna.com/collections/delta-8-products/products/delta-8-diamond-sauce
https://reefcanna.com/collections/delta-10-products/products/delta-10-vape-cart
https://reefcanna.com/collections/delta-10-products/products/delta-10-thc-softgels
https://reefcanna.com/collections/thc-o-products/products/thc-o-vape
Please note that any further violation of Shopify’s Acceptable Use Policy (AUP), including the reposting of the content above, may result in the suspension or termination of your Shopify account.
We understand that the cannabis space is quickly evolving. In the future, if applicable federal and state laws and regulations in the United States change, we may be able to support these products on Shopify.
Please carefully review the rest of your shop to ensure it complies with Shopify’s AUP and Terms of Service.
More information about selling hemp-derived products can be found here.
Best regards,
Shopify”
When Boyce inquired about the removal he received an email in response that said Shopify was “not accepting calls at this time” and repeated its stance that his products exceeded the 0.3% THC limit.
Boyce said that claim was false and that Shopify was misinterpreting the law. CBD-Intel also believes that many products being made from hemp-derived cannabinoids, such as THC isomers and HHC, do not violate federal controlled substance law.
“I guess Shopify doesn’t want the liability, but it’s definitely not illegal. They just don’t want to monitor it,” Boyce added.
Waves of periodic crackdowns
Shopify’s regulations say that products must be limited to 0.3% THC for US sales, regardless of compound type, including delta-8, delta-9 and delta-10. For global sales, the THC limit is 0.2%. Shopify also requires sellers to sign an Attestation for the Sale of Hemp and Hemp-Derived Products that confirms products are within the THC limit, comply with federal, state and local laws, including the laws in the customers’ jurisdictions, and that sellers do not market their products as having any medicinal or therapeutic effects unless those claims have been approved by the US Food and Drug Administration (FDA).
Boyce said Canadian-based multinational Shopify was the gold standard among e-commerce platforms for hemp distributors, and that the move to a new platform had affected his business operations, with customers not receiving email confirmation of purchases, and customer emails being blocked.
However, purchases are still coming in despite the snarled services. “If your deals are good, people are still going to buy it, but it’s sure as hell not as easy as it was,” he said.
Monica Enriquez of Austin said credit card processing companies would periodically shut down transactions for her husband’s CBD business, and helping him to overcome those challenges led her to landing a job in the credit card processing field. The solution she found was Shopify.
In her decade of connection to the industry, she said she has seen trends of companies wavering in their willingness to work with CBD companies. She said she had seen waves of crackdowns as new products surface, which are often followed by new legislation.
“Everyone who would touch this industry would change their minds a couple years later,” she told CBD-Intel.
She became aware of Shopify’s closures of online CBD shops through Humankind Herban Farmacy’s notice, and called around to other clients who all confirmed that they too were facing shutdowns.
Mom-and-pop shops in trouble
Enriquez said that if Shopify was only closing sites based on compliance violations, she was not concerned about the impact on the industry as it was a trend she had seen before. “It’s not a concern if they are just rightfully finding concerns when they are doing their due diligence,” she said.
New laws, regulations, and products often act as a “disruptor” to the industry while companies determine how to navigate legal gray areas before finding a renewed balance, she added.
Boyce transferred his business to WordPress, which he said does not include plugins and other tools that made building an e-commerce site easy. He said he was fortunate because he has a team and years of experience in the industry that allowed him to continue his operations.
“The mom-and-pop shops are probably just going to throw their hands up,” he said.
He noted what he called inconsistencies in Shopify’s closures since his wife’s company, Kandy Girl, was still fully operational selling delta-9 gummies.
He maintains that his own products are fully legal and that Shopify did not give him evidence to support its claim that he was violating its regulations. He said he had the lab test results to prove he was not selling products that exceed THC limits.
His believes Shopify is simply unwilling to take on the liability currently associated with the industry. “Nobody wants to touch cannabis,” he said. “Yet again.”
Shopify has not responded to CBD-Intel’s request for information or comment.
– Alyssa Choiniere CBD-Intel contributing writer
