Retailers selling cannabis accessories online claim Shopify is giving preferential treatment to actor Seth Rogen by allowing his smoking lifestyle brand to use its payments technology to process orders while blocking them from doing so.
Rogen’s firm, Houseplant, “makes nice things for people who love weed,” and sells ashtrays, grinders and rolling papers using Shopify Payments. Houseplant’s success was highlighted at a recent event in New York, where Shopify president Harley Finkelstein presented Rogen with an award for hitting 100,000 orders on the platform.
Talking Points
- The success of Seth Rogen’s cannabis accessory store has highlighted what some in the industry call a double standard, with Shopify giving the actor’s firm access to Shopify Payments while blocking others that sell similar products
- Shopify started to allow some cannabis businesses to use its platform in 2018, but has told some retailers that they are unable to process payments using its technology as a result of the products they sell
The event has caused consternation in the cannabis accessory industry, with some accusing Shopify of unevenly enforcing its terms of service. Justin Johnson, co-founder and CEO of Boulder, Colo.-based Chill Steel Pipes, said his firm is unable to sell products similar to Rogen’s through Shopify Payments and has to use a more expensive third-party order processing company as a result.
Neither Houseplant nor Shopify responded to a request for comment. Stripe, the payment processor for Shopify Payments, did not respond to a request for comment.
Shopify started allowing Canadian cannabis retailers to use its platform in 2018, expanding that to parts of the U.S. the following year. Stores selling cannabis-related products must follow specific rules, including an outright ban on using Shopify Payments to process sales of hemp, CBD and THC products. Prohibited products and services include those “that require regulatory approval or compliance, such as cannabis and related products,” according to Shopify Payment’s policies.
Related Articles
By
James Temperton and Murad Hemmadi
By
Aimée Look and Murad Hemmadi
Rogen’s store appears to operate in something of a grey area in Shopify Payment’s terms of service. As a result, other cannabis accessory retailers using the firm’s technology claim that they’re being asked to adhere to a different interpretation of Shopify’s rules.
Toronto-based cannabis accessory retailer Another Room is one of the companies barred from using Shopify Payments to process orders for its ashtrays, rolling trays, cones and jointlockers. As a result of being prevented from using Shopify Payments, the company pays a two per cent fee per transaction to Shopify, co-founder Chloe Popove wrote on LinkedIn, expressing “mixed emotions” about Houseplant’s ability to use Shopify Payments. Some in the industry jokingly call the extra fee a “sin tax.”
Johnson said when he asked Shopify why his business was seemingly being treated differently to Rogen’s, he was told he would be allowed to use Shopify Payments if he removed two products from the shop’s website: a jar and a dab tool set. Additionally, he was told his company must have “zero reference of cannabis” on its social media, he said.
Johnson is conflicted on what to do next. His firm doesn’t reference cannabis much on social media, he said, mainly because tech platforms limit the reach of drug-related posts. He pointed to examples of Houseplant promoting THC-infused drinks on social media. Posts on Houseplant’s Instagram include, for example, Rogen smoking and the word “weed” in a caption. Seemingly as a result of Shopify’s terms, the THC drinks are sold through a different Houseplant online store which does not use Shopify Payments to process orders.
Johnson said he might comply with Shopify’s request so he can start using Shopify Payments. The math makes sense. A million dollars in sales annually would cost him an extra US$20,000 in fees as a result of not being able to use Shopify Payments, he explained—and that doesn’t include the extra money he pays on higher fees to use another payment processor. “That’s like a part-time employee,” he said.
He’s grateful Shopify lets cannabis accessory retailers use its platform, but, like Another Room’s Popove, he’d like to see a level playing field. “It’s just about having a consistent standard across the board,” said Johnson. “I don’t want Houseplant to get reprimanded for this. I want other brands to have the same access that a celebrity brand gets.”
