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Online cannabis sales: Open source vs. SaaS
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Mike Hubbard. Posted in Digital Commerce , Drupal. January 7, On October 17, , Canada took a progressive step forward as the sale of recreational cannabis became legal for the entire country. It was the end of a prohibition, sparking a wave of new business opportunities. We thought it would be a good opportunity to show some of the benefits of open source vs. SaaS solutions for online cannabis. We do, however, have solid information for a couple of smaller provinces that we can start with. Then we can expand with speculation after that. The online retail outlet uses the open source platform Drupal. The online retail outlet uses the SaaS platform Shopify. All ecommerce cannabis outlets in Canada, government or private, are going to have the same features. They need to block access to minors, sell products based on weight, and restrict the maximum amount of cannabis an individual can purchase at one time. All other functionality required is standard ecommerce. Where it gets interesting, and where the Yukon Government is in a great position to succeed, is commerce architecture and service fees. These are a couple of big reasons why open source is really catching fire in the ecommerce marketplace. Yukon Cannabis is built on the Drupal platform. Development can be done in-house or with any 3rd party development agency familiar with the underlying code, mainly PHP. An advantage to using a platform like Drupal is that it can integrate and talk to other services your operation may use for accounting, marketing, inventory, customer management, etc. Integrations and automation eliminate swivel chair processes that restrict business growth. PEI Cannabis, on the other hand, is somewhat vendor-locked using the Shopify platform. That usually means high cost. When a sale is made using a SaaS platform, a certain percentage of the sale is lost to taxes and additional platform-specific transaction fees. With SaaS ecommerce platforms like Shopify, year after year the cost of ownership increases. Aside from the standard payment gateway fees and hosting fees, Yukon Cannabis pays no additional monthly or yearly licensing fee to use their ecommerce platform. Furthermore, provincial government cannabis retailers are essentially public companies. A large portion of the profit made is to be distributed at the provincial and federal levels to support various public services and initiatives. By utilizing open source technology and therefore avoiding platform-specific fees, the Yukon government will have more capital available for their public services and initiatives. Yukon constituents should be quite happy about that! This is all speculation of course, but it still shows realistic ecommerce sales numbers and how service fees accumulate based on them. If that ends up being true, the numbers below would actually be grossly underestimated! The biggest advantage that SaaS such as Shopify has over open source is the speed at which you can get your product to market and the simplicity of use. The website management interface is clean and easy to use, and most people can do what they need to do with little to no training. Watching a new industry unfold in Canada has been fun. Try our Digital Commerce Assessment Tool to uncover problematic areas within your digital commerce operations. All Right Reserved. Skip to main content. Posted in Digital Commerce , Drupal January 7, More articles. Online cannabis sales: Open source vs. SaaS What we can learn from day one of Canada's legal online cannabis sales. Functionality is the same All ecommerce cannabis outlets in Canada, government or private, are going to have the same features. Where open source has the advantage Where it gets interesting, and where the Yukon Government is in a great position to succeed, is commerce architecture and service fees. Commerce architecture Yukon Cannabis is built on the Drupal platform. Service fees When a sale is made using a SaaS platform, a certain percentage of the sale is lost to taxes and additional platform-specific transaction fees. Shopify Plus Monthly including transaction fee calculator.
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Investors Should Sign up for Weedmaps – Cannabis SaaS Platform Smokes the Competition
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Investors Should Sign up for Weedmaps – Cannabis SaaS Platform Smokes the Competition
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