Marijuana.com sold for $4.20 million.
Cannnabis.com sold for $5.2 million.
Kush.com sold for $500,000 just months ago.
Today, the announcement of CBDOIl.com selling for a cool $500,240 to Joe Vargas of Las Vegas, who owns dispensaries and the website BuyLegalMeds.com was a stunner.
The war has started for online traffic for the words “cannabis”, “marijuana”, “cbd” and “cbd oil”. Actually, let me re-phrase that, the war for traffic has been going on for years in the cannabis space, but is it getting much fiercer, and expensive. Today’s announcement just adds fuel to the CBD craze as Joe Vargas, already experienced at selling CBD and cannabis, jumps into the online ranking game with one of the best URL’s you could ever own in the CBD space. In my opinion, behind CBD.com and CBD.net, this would be the 3rd most desirable CBD on the planet earth.
Why put it behind the .net you may ask?
Many people are just hearing about CBD now and some will have no idea that you can take it in oil form. The term oil could scare some new users away in the sense, how do I ingest oil? Either way, it is a close 3rd place and maybe a second-place term due to the .com ending.
For those that are new to the domain game and URL brokerage system, Google values “exact match domains” as part of their algorithmic ranking system. What is an exact match domain? An exact match domain is a domain that has the main keyword you are looking and then followed by the extension ending like .com, .net, org, etc. For example, cannabis.com and cannabis.net would be the two most valuable exact match domains for the word “cannabis”. The same can be applied to any field, not just cannabis, so “icetea.com and icetea.net”, “shoes.com and shoes.net”, etc.
Within the domain name game, the .com is generally still considered the most valuable, followed by .net and then .org. The other nice aspect of exact match domains is that they are very brandable and user friendly. Instead of telling someone to go to “cbd oil marketplace online dot com”, it is very easy and memorable to say, “go to CBD oil dot com”.
So exact match domains have multiple benefits from Google giving them an edge in ranking, if all other things were equal, as well as being very brandable and easy to remember.
What does Joe plan to do with the domain he just picked up for a cool $500,240? Joe says he will set up the “Amazon of CBD” and will combine it with educational articles about CBD. “We look at the domain as an authority to the entire industry and the CBD oil industry is worth billions. We think we got a great deal. This domain is worth a hell of a lot more to us and I didn’t want to lose the opportunity to someone else,” Vargas said.
The seller reached out to Joe’s social media team and eventually got through to Joe. Joe’s initial offer was $100,000. When the owner said no, he raised his offer to $300,000. The seller said he had a hard line of $500,000 so Joe ponied up the $500,000.
What does this mean for the battle for SEO ranking and traffic for CBD, as well as cannabis?
People and companies are making big bets now that the real story in the cannabis and CBD space will be about demand down the road, NOT supply. We have covered this in a few articles here on Cannabis.net, but in the end, the winners and losers in the industry will be determined by who can create orders for the plant, not the ones who can grow the plant. Remember, the cannabis plant can be grown in 10 to 12 weeks, 16 at most. There will be an endless supply of cannabis on the legal and black market as the entire world begins to grow cannabis legally at home and in large operational grows. Once the laws are changed and the market can become efficient (i.e. sent in the mail, cross a state line, etc.) the problem will never be supply, it will be getting orders.
For example, Oregon has a massive oversupply, but can't ship it to states like New York or Massachusetts due to the Federal laws surrounding a Schedule 1 drug, which cannabis is currently listed as at the Federal level. So, while prices plummet to $100 a pound in some southern Oregon locations, people are still paying $2.500 a pound in states like New York and Massachusetts. This is an inefficient market and temps many people to break the law in order to play the arbitrage game. Once the laws are rectified, the legal "moat" around cannabis will be gone and supply and demand will be efficient.
What do pizza shops worry about? Do they worry about not being able to get tomatoes sauce and mozzarella cheese? No, their biggest worry is how to sell more pizzas, and how to get more orders. Yes, there will be price fluctuations in tomatoes and cheese over time, but there will never be a point where they can’t get tomato sauce. The price may shoot up if there is a bad tomato season somewhere, but it will be temporary.
The Ghost Group that runs Weedmaps was well ahead of their time in scooping up Marijuana.com over 10 years ago when legalization like we see today was just a dream. They also bought Cannabis.net and marijuana.net to basically own “3 of the 4 crown jewels in the cannabis industry”. What they have done is created a “Google moat” on page #1 for cannabis and marijuana terms. Those domains are very powerful and rank well, and since there is no advertising allowed in the cannabis space yet, guess who all the dispensaries and brands have to go through to get traffic? It was a brilliant move and gives the Ghost Group 3 valuable assets in a future IPO or sale.
So, would you have done it if you had the money? Would you invest in an exact match or high-profile domain in the cannabis space, hoping that over time the domain becomes more and more valuable as countries around the world legalize the cannabis plant?
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