This California hashish firm has $ 250 million value of merchandise yearly – New Hashish Ventures

Exclusive interview with Nabis co-founder and President Jun Lee

Nabis is a technology-based third-party cannabis distributor serving the California market. Co-Founder and CEO Vincent Ning spoke to New Cannabis Ventures in 2018, and Co-Founder and President Jun Lee gave an update. He spoke to New Cannabis Ventures about the Nabis network, which was expanding beyond California and developing a different distribution model. The audio of the entire conversation can be found at the end of this written summary.

The Nabis team

Lee has a technology background. He studied computer science in college and worked as a software engineer at Facebook after graduating. Lee and Ning, friends since their youth, had their first experiences in the cannabis room as delivery drivers. They were interested in the growth potential of the industry and started Nabis.

The Nabis team has grown since 2018. Notable additions include Brian Dewey, former Vice President of Sales at Kiva Brands, and Will Brophy. Dewey is now Head of Business Development for the company and Brophy is Head of Operations.

Nabis team members

California market reach

Nabis serves both brands and cannabis retailers. It currently represents more than 100 brands and ships to more than 1,000 retailers. Buddies, PLUS, Dosist, Nug and Sundae School are among the brand customers of Nabis.

Nabis works with many brands of cannabis, including PLUS.

According to Lee, nabis sells approximately 9 percent of all legal cannabis in California, an annualized retail value of approximately $ 250 million. The company has two warehouses (one 26,000 square feet and one 20,000 square feet) and a fleet of 55 trucks.

Serving brands and retailers

Nabis serves as an end-to-end solution for cannabis brands. It picks up products, stores and delivers to retail stories. In addition to delivery, the company takes care of collections and accounts receivable management. Retailers can use the company’s network to buy products from its branded portfolio. According to Lee, nabis serves as the connective tissue in the cannabis supply chain.

In one of the Nabis warehouses

In addition, the sales company offers Nabis Capital, a short-term loan service. The company buys supplier invoices at a discounted price so retailers can access funds sooner. This is an important intermediary role, according to Lee, especially when banking services are not readily available. The company is also experimenting with a freight service.

A differentiated business model

Nabis stands out from its competitors through a differentiated business model. For example, the two largest competitors have a traditional distribution model where they buy products at a discount and sell them to retailers. Nabis, on the other hand, tends to take a market-based approach that allows brands to compete on the platform it has built. The company wants customers to choose what to buy so it offers as much choice and access as possible, according to Lee.

When it comes to the California market, more than half of the cannabis products are self-sold. Lee expects that number to shift and more companies to work with distributors like Nabis.

While mergers and acquisitions that could help Nabis grow may be of interest, Lee and Ning are not building the company for an exit. You are in your late twenties, and Lee says you will likely be working building this company for the next 10 to 15 years.

financing

Nabis raised $ 4 million in the spring of 2019. To date, the company has raised around $ 14.5 million, according to Lee. So far, investors have been a combination of angels, family offices, and some limited institutional VCs.

Lee and Ning value the freedom that private funding offers. The co-founders still own the majority of the company, giving them freedom of choice. However, they are open to public funding when it becomes necessary to achieve their growth goals.

Manage growth

While California remains a major market in the cannabis industry, Lee recognizes that distribution is a large-scale business. Later this year, the Nabis team will investigate the regulations of other legal cannabis markets and consider possible expansion beyond California. Markets such as Nevada, Massachusetts, Illinois, New York, and New Jersey could be of interest.

As a software-controlled company, Nabis does not necessarily have to replicate its warehouse and truck infrastructure in every state it chooses. It has the option of creating a franchise model and licensing its software to partners.

As Nabis continues to grow, it takes a very data-driven approach. The team examines around 200 different metrics related to revenue, acceleration rate, and capacity. The north star metric is punctual and complete (OTIF). The company tracks this metric to measure its performance and find opportunities for improvement.

While the company’s unique model is a differentiator, Lee is not yet sure what form of distribution the cannabis industry will ultimately adopt. This remains a consideration, but Nabis continues to grow. The company is adding new talent and aiming to expand its market share in California.

Please visit the Nabis website for more information. Listen to the entire interview:

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Carrie Pallardy, a Chicago-based writer and editor, began her career in the healthcare industry writing, editing, and interviewing subject matter experts from a variety of industries. As a published author, Carrie continues to tell her network of readers compelling, undiscovered stories. Contact us for further information.

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