Boom! Shopify Cannabis Stores see Big Volume on Canadian Marijuana Legalization

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Shopify

Something really interesting is happening in the e-commerce world – just a day after Canada’s government opened the floodgates to recreational marijuana sales, analysts are seeing quite a bit of activity online.

Lots of this activity is taking place over a network that’s a household name in e-commerce – reports today show that a collection of Canadian marijuana stores on Shopify are seeing over 100 orders per minute.

That’s translating into hundreds of thousands of orders per day, especially in Ontario where brick and mortar marijuana shops will be a long time coming.

Shopify has been a popular choice for low cost, relatively informal e-commerce shops for several years – but analysts are thinking there’s a big upside to the partnership between the Shopify platform and the massive group of vendors who can now sell marijuana legally in Canada, as well as in a few U.S. states. Is that making SHOP a buy?

All of the buzz is not translating to corresponding rises in Shopify’s stock price – at least not yet. It’s interesting to note that the stock is actually down today and yesterday from a peak at the opening of the market Wednesday morning. Right now, you wouldn’t say that SHOP stock is trending up – or even that it’s up month-to-month – but it is up year-over-year where Shopify started 2018 around $110, and is now squarely up above $130.

That’s nothing, according to some avid analysts who see considerable long-term upside.

“We’re just getting started,” tweeted Loren Padelford yesterday, looking at that tremendous order volume and welcoming the commentariat to cannabis legalization in Canada. As vice president and GM of Shopify Plus, Padelford hasn’t been shy about tooting his company’s horn over cannabis sales – he’s been using the same Twitter account in the run up to the big day, and then giving kudos to internal teams for handling the rollout so well.

Meanwhile, Motley Fool is making some comments on SHOP, including praising its relatively low volatility – in other words, if you’re frightened out of the marijuana stock market because of wild swings in those equity prices, Shopify stock could be a safer way to go, while still cashing in on the buzz around legalized pot.

There are now more than 600,000 merchants with Shopify-fueled online stores, and growth is booming,” wrote Rick Munnariz this morning. “Revenue soared 61.5% (over the past quarter) and that’s actually decelerating from the pace it was running at in previous quarters. It was targeting top-line growth to slow to a 48% to 50% clip for the third quarter that ended last month. It will be interesting to see how its fourth-quarter guidance plays out in light of Wednesday’s uptick in shopping activity in its home country.”

Set to share new quarterly numbers next week, Shopify could be off to a new start – so look for any rallies that might happen due to the big buy around new recreational herb in the Canadian north.

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