Selling in Regulated Markets on Shopify: The Operator’s Playbook

The brands that win in regulated markets aren’t the ones with the best products. They’re the ones who figured out the operational infrastructure first and built everything else on top of that foundation.

Let me be direct with you: if you’re operating in a regulated market on Shopify — cannabis, CBD, hemp-derived products, alcohol, or any other age-restricted category — you are playing a fundamentally different game than the average DTC brand.

The playbook that works for a supplement brand or a fashion label doesn’t apply here. Your payment processor will drop you without warning. Your Facebook ad account will get shut down. Your email service provider might flag your content. And if you’re not thinking about retention from day one, you’re bleeding customers you can’t affordably replace.

Here’s what I’ve learned from watching regulated-market operators scale on Shopify: the brands that win aren’t just the ones with the best products. They’re the ones who figured out the operational and marketing infrastructure first and built everything else on top of that foundation. This is that playbook.

Why Regulated Categories Require a Different Shopify Playbook

The US CBD market alone is projected to reach $4.23 billion in 2026. The broader regulated consumables space — including cannabis, hemp-derived products, and age-restricted categories — represents one of the fastest-growing segments in ecommerce. Whether you’re doing $10K months or pushing toward your first $1M, the opportunity is real. But so is the operational complexity that comes with it.

Here’s what most of the “how to start a Shopify store” content doesn’t tell you: regulated market operators face a specific combination of challenges that mainstream ecommerce brands never encounter. Payment processors that actively avoid your category. Shopify Payments does not support CBD or THC product sales — period. You need a third-party high-risk processor before you take your first order. Ad platforms that restrict or ban your content. Facebook, Google, and TikTok have strict policies around regulated products, which means you cannot rely on paid social the way other brands do. Marketing claim restrictions that fundamentally change how you write product descriptions, email copy, and content — you cannot make therapeutic or medicinal claims without FDA approval. Age-gating requirements that, depending on your state and product type, may be a legal requirement before allowing a purchase. And a state-by-state legal patchwork where what’s legal to ship in California may not be legal in Idaho, which means your fulfillment and shipping logic needs to account for this at the SKU level.

None of these challenges are insurmountable. But they require you to build your store infrastructure with compliance as the foundation — not an afterthought.

Payment Processing and Platform Risk: What to Have in Place Before You Scale

This is the one that catches operators off guard most often, and it’s the one that can stop your business cold overnight. Shopify Payments uses automated risk algorithms to protect against fraud and chargebacks. The problem is that these algorithms don’t always distinguish between actual fraud and a legitimate regulated-market business that happens to match a risk profile. Your store can be fully compliant and legal — and Shopify’s system can still freeze your funds, place your account in reserve, or suspend payments entirely. Often without warning. I’ve seen this happen to brands doing $50K+ per month. One day they’re processing normally, the next day their funds are frozen and they’re scrambling to find an alternative processor while their customers’ orders sit unfulfilled.

The fix is straightforward, but it has to happen before you scale.

Set Up a High-Risk Payment Processor First

Third-party processors that explicitly support regulated products on Shopify include Adaptiv Payments, Adamant Payments, DigiPay, and Bankful. Each has its own approval requirements and fee structure — expect higher processing fees than standard Shopify Payments, typically in the 3 to 5% range plus transaction fees. To apply, you’ll generally need your business license or incorporation documents, a valid government-issued ID, bank statements from the last 3 months, previous processing history if available, and Certificates of Analysis (COAs) confirming THC content at or below 0.3% for hemp-derived products.

Be honest about what you sell and how you sell it during the underwriting process. Processors who specialize in regulated markets understand your business — they’re not going to penalize you for operating in a high-risk category. They’re going to penalize you for hiding it. To learn more about how Shopify’s risk algorithms work and what product categories trigger them, read our deep dive on Shopify Payments risk profiles and what triggers a payment hold.

Configure Your Shopify Store Correctly

Once you have processor approval, go to Settings then Payments in your Shopify admin, disable Shopify Payments, add your approved processor under Alternative payment methods, and run a test transaction before going live. One more thing: for CBD and hemp-derived products, US merchants must complete Shopify’s Attestation for the Sale of Hemp and Hemp-Derived Products. This is a compliance requirement, not optional. Skipping it puts your store at risk of suspension regardless of which payment processor you use.

Age Verification and Compliance Without Killing Conversion

Age verification is one of those requirements that operators often implement poorly — either they skip it entirely, which is a compliance risk, or they implement it in a way that creates so much friction it tanks their conversion rate. Here’s the reality: depending on your state and product type, age verification may be legally required. For products like THC-infused gummies, state regulations in many jurisdictions prohibit sales to anyone under 21. Getting this wrong isn’t just a conversion problem — it’s a legal liability.

The good news is that modern age verification apps for Shopify have gotten significantly better at balancing compliance with conversion. Whether you’re just starting out or processing thousands of orders a month, the principles are the same.

Use a Dedicated Age Verification App

A pop-up age gate that asks visitors to confirm their birthdate before entering your store is the minimum viable approach. More robust solutions use ID verification technology that scans government-issued ID in real time — these are increasingly common for brands operating in states with strict enforcement. Look for apps that trigger on store entry rather than just at checkout, store verification data compliantly with GDPR and CCPA considerations in mind, integrate with your shipping logic to block orders to restricted states, and provide audit logs you can produce if regulators ask.

Don’t Let Age Verification Destroy Your Mobile Experience

The biggest conversion killer I see is age verification gates that are not mobile-optimized. If your gate requires someone to type their full birthdate on a mobile keyboard, you’re losing a meaningful percentage of visitors before they ever see your product. Test your gate on mobile. Make it frictionless. A simple “I am 21 or older” confirmation button with a clear visual design will outperform a complex form every time. For a deeper breakdown of why age verification matters operationally and what to look for in a compliant system, see our guide on why your Shopify business needs an age verification system.

Retention and Repeat Purchase Strategies When Paid Ads Are Off the Table

Here’s the question I want you to sit with: what’s your customer acquisition cost if you can’t run Facebook ads? For most regulated-market operators, the answer is much higher than they’d like. And that makes retention not just a nice-to-have — it makes retention the single most important lever in your business. Existing customers are 5x more likely to buy again than a new visitor is to convert. In a category where acquisition is expensive and ad channels are restricted, that number should fundamentally change how you allocate your marketing budget.

In regulated markets, retention isn’t a growth strategy. It’s a survival strategy. The brands that figure this out early are the ones still standing at $2M.

Build Your Email List Like Your Business Depends on It

Email is the primary compliant channel for regulated-market operators. Unlike SMS — which has carrier-level restrictions for certain product categories — email gives you a direct, owned line to your customers that no platform can take away. Important note for CBD merchants specifically: Shopify’s current policy supports email-only ordering and shipping notifications for CBD products. SMS messaging is not supported for CBD shops on Shopify. Build your retention infrastructure around email from the start. Capture email at every touchpoint — age gate entry, checkout, post-purchase, and loyalty program enrollment. Segment immediately: first-time buyers, repeat buyers, lapsed customers, and high-LTV customers need different messaging. Automate the post-purchase sequence — a 3-email post-purchase flow covering order confirmation, product education, and replenishment reminder can drive second purchases 12 to 18% more effectively than a single confirmation email.

For regulated categories, your email content strategy needs to walk the line between educational and promotional. You cannot make health claims. But you can educate customers on product formats, usage patterns, quality indicators, and sourcing — all of which build trust and drive repeat purchase without triggering compliance issues. See our full guide on using retention emails to drive repeat sales and our breakdown of ecommerce customer retention marketing strategies for deeper tactical guidance.

Subscriptions: The Retention Model Built for Regulated Categories

Here’s something I’ve noticed consistently with regulated-market operators who are winning at retention: they’ve moved a meaningful portion of their revenue to subscriptions. Regulated products — CBD oils, hemp supplements, functional gummies — are often consumables with a predictable replenishment cycle. A customer who buys a 30-day supply of a CBD tincture will need a refill in approximately 30 days. A subscription model captures that replenishment automatically, before the customer even thinks to look elsewhere. Beyond the revenue predictability, subscriptions solve a specific retention challenge in regulated categories: you can’t retarget lapsed customers with paid ads the way mainstream brands can. A subscriber who has opted into automatic replenishment doesn’t need to be retargeted — they’ve already made the commitment. Shopify has native subscription infrastructure, and apps like Recharge and Skio integrate directly with Shopify’s checkout to enable subscription management at scale. If you’re not already offering subscriptions, this is worth prioritizing.

AI-Powered Marketing in Regulated Markets: What’s Working Now

AI tools have opened up meaningful new capabilities for regulated-market operators — particularly in areas where traditional marketing channels are restricted. This is one of the most underutilized advantages available to brands in this space right now, regardless of whether you’re at $10K or $500K per month.

Content Creation at Scale, Within Compliance Guardrails

One of the most time-consuming challenges for regulated-market brands is producing compliant marketing content. Every product description, email, and blog post has to thread the needle between being compelling and avoiding therapeutic claims that could trigger FDA enforcement. AI writing tools — when properly prompted with your compliance requirements — can dramatically accelerate this process. Build your compliance guardrails into your prompts from the start: define what claims are off-limits, specify approved language frameworks focused on education and lifestyle rather than medical outcomes, and require citations to Certificates of Analysis or third-party testing data where relevant. The output still needs human review before publication, but AI can reduce the time from brief to first draft by 60 to 70%, which matters when your content team is producing compliant copy across product pages, email flows, and blog content simultaneously.

AI-Driven Personalization for Email Sequences

Personalization is where regulated-market operators have a real competitive advantage in email — because your competitors are often stuck sending generic broadcast emails to their entire list. AI-powered email platforms can analyze purchase history, browsing behavior, and engagement patterns to trigger highly personalized sequences. A customer who bought a CBD tincture and opened your product education email three times is a very different prospect than a customer who bought once and never engaged again. AI segmentation identifies those patterns at scale and routes each customer to the right sequence automatically. The result: email revenue that compounds over time, without requiring your team to manually manage segmentation logic.

SEO and AI Search Visibility

Here’s something most regulated-market operators haven’t thought about yet: AI search platforms like ChatGPT, Claude, and Perplexity are increasingly being used by consumers to research regulated products. Someone asking about the difference between CBD isolate and full-spectrum, or whether Delta-9 gummies are legal in their state, is a high-intent prospect. Brands that have built authoritative educational content — product guides, legal explainers, usage FAQs — are starting to show up in AI-generated answers to these questions. This is an emerging channel that most regulated-market operators haven’t invested in yet, which means the opportunity cost of waiting is increasing every month.

Building Customer Trust When You Can’t Make Health Claims

This is the creative challenge at the center of regulated-market marketing: how do you build a brand that people trust and return to when you can’t say the thing that most of your customers actually want to hear? The answer is that you build trust through everything else.

Transparency as a Brand Differentiator

In a category where product quality varies enormously and consumer skepticism is high, radical transparency is a genuine competitive advantage. Brands that publish their Certificates of Analysis, explain their sourcing and extraction processes, and provide clear information about THC content and testing protocols build trust that no ad campaign can replicate. Make your COAs accessible directly from product pages. Link to your testing lab. Explain what full-spectrum versus broad-spectrum versus isolate actually means for the customer’s experience. This is the kind of educational content that builds long-term brand equity — and it’s fully compliant.

Community as a Retention Channel

The brands I’ve seen build the most durable customer bases in regulated categories have invested heavily in community — email newsletters with genuine educational value, private communities where customers can share experiences within compliance guidelines, and loyalty programs that reward engagement rather than just purchases. This is slower to build than a paid acquisition funnel. But in a category where paid acquisition is restricted and customer trust is hard-won, community is a moat that competitors can’t easily replicate.

Review Strategy Without the Shortcuts

Social proof is critical in regulated categories — customers are making purchase decisions about products they can’t easily evaluate before buying. But regulated-market brands need to be careful about how they collect and display reviews. Review content that makes therapeutic claims — even if written by customers, not the brand — can create compliance exposure. Your review collection process should include a moderation step that flags and removes claims that cross the line. This is not optional. It’s a documented compliance practice that protects your brand.

The Operational Infrastructure Checklist Before You Scale

If I were advising a regulated-market operator getting ready to scale on Shopify, here’s the minimum viable compliance and operational infrastructure I’d want to see in place before they started spending significantly on growth. This applies whether you’re at $10K per month or $200K — the foundation is the same.

This isn’t a list designed to scare you. Every single item on it is achievable — and most of them can be set up within a few weeks with the right apps and processes. The point is that regulated-market success on Shopify is an operational problem before it’s a marketing problem. Get the infrastructure right. Then scale.

Frequently Asked Questions

Can I use Shopify Payments if I sell CBD or hemp-derived products?

No — Shopify Payments does not support CBD or hemp-derived product sales, including products containing THC. You must integrate a third-party high-risk payment processor such as Adaptiv Payments, Adamant Payments, DigiPay, or Bankful before you can process transactions. Attempting to use Shopify Payments for regulated products risks account suspension and fund freezing, sometimes without warning. Apply for your high-risk processor before you start marketing, not after your first order comes in.

Is age verification legally required for selling CBD on Shopify?

It depends on your state and product type. Many states require age verification for hemp-derived products containing THC, with the minimum age set at 18 or 21 depending on jurisdiction. Even where it is not legally mandated, age verification is a strong compliance practice that protects your business from liability and demonstrates good-faith regulatory compliance. For any brand operating in multiple states, implementing age verification from day one is the only defensible approach.

What marketing claims can I legally make about CBD products?

You cannot make therapeutic, medicinal, or disease-related claims about CBD products without FDA approval. This includes claims that imply your product treats, cures, mitigates, or prevents any medical condition. Compliant marketing focuses on product quality, sourcing transparency, third-party testing results, lifestyle positioning, and educational content about the product itself. Build your content strategy around what the product is and how it’s made — not what it does to the body.

Can I run Facebook or Google ads for my regulated Shopify store?

Both platforms have strict restrictions on advertising regulated products including CBD, cannabis, and hemp-derived products. While policies evolve and some ad formats may be available in limited contexts with careful compliance, regulated-market operators generally cannot rely on paid social or search advertising the way mainstream brands can. Email marketing, organic SEO, content marketing, and community building are the primary scalable acquisition channels. Build these owned channels first — they’ll outlast any policy change.

Do I need a license to sell CBD products on Shopify?

No federal license is required to sell hemp-derived CBD products online in the US, provided your products contain less than 0.3% THC and comply with the 2018 Farm Bill. However, individual states may require a general business license or a specific hemp retailer license. US merchants must also complete Shopify’s Attestation for the Sale of Hemp and Hemp-Derived Products. Always consult with a legal advisor who is familiar with cannabis and hemp regulations in your specific operating jurisdiction before launching.

Why are subscriptions particularly effective for regulated-market brands?

Regulated consumables — CBD oils, hemp supplements, functional edibles — typically have predictable replenishment cycles, making them ideal subscription products. More importantly, subscriptions solve a core retention challenge specific to regulated brands: you cannot retarget lapsed customers with paid ads the way mainstream brands can. A subscriber has pre-committed to repeat purchase, eliminating the need for paid re-acquisition. Subscription revenue compounds over time and creates the kind of predictable monthly recurring revenue that supports sustainable scaling without dependence on ad platforms.