Exclusive news and research on the wine, spirits and beer business

Interview, Part 1: Vince Ning, Founder and Co-CEO of California Cannabis Distributor Nabis

September 27, 2022

San Francisco-based Nabis has emerged as one of the key players driving the cannabis business in the California market. Founded in 2018 by tech entrepreneurs Vince Ning and Jun Lee, the company distributes over 200 brands and ships $350 million in cannabis products annually to dispensaries across the Golden State. SNDC executive editor Daniel Marsteller recently spoke with Ning to hear more about the company and the state of cannabis distribution in California.

SNDC: What is the model and mission for Nabis?

Ning: We run the largest licensed wholesale platform in California, and today we distribute close to 20% of the California market. When I say distribute, I do want to clarify the nuance compared with traditional distributors. If you think about distribution as traditionally a sales function plus a logistics function, we’re mainly handling the logistics function. So in a lot of ways we’re set up more like a fulfillment by Amazon than a “boots on the ground” sales team that goes door to door selling a curated menu of brands and products. That allows us to charge a lot lower for our services because we’re not having to support a large sales staff, which then allows the brand to hire their own sales team, make their own direct customer relationships with retail buyers, and tell their own story without having to go through a third party. Second, it allows us to be fully brand agnostic, meaning we don’t take equity stakes in brands, we don’t sell brands, we don’t own brands. For the wide selection of brands in California, our value prop to them is we provide the market access from a logistical fulfillment perspective.

SNDC: If you don’t sell the portfolio directly, how do you facilitate sales for brand partners?

Ning: My background comes from the tech space and so we built a lot of technology tools to help brands be able to get to market effectively. We have a wholesale marketplace that helps brands generate sales orders and exposure. We have a short-term financing program on our platform as well to bridge cashflow during seasonalities in the market. And we have a lot of data.

And so by the end of the day, our unit level workflow and function that we offer to the market is fulfilling an order when an order comes in and picking up the cash or collecting the payment and processing it and remitting that back to the brand. We’re the largest distribution platform in California by a factor of probably six times the number of brands compared with the next largest distribution company, and we’re looking to expand this business nationally, with New York being a pretty focal target for us.

SNDC: Are you seeing more competitors come into the distribution space with similar models?

Ning: Yes, but we’ve been able to offer the lowest pricing and the fastest deliveries, similar to how Amazon builds their business with their flywheel of faster delivery. No one’s ever going to complain about faster delivery, more selection, or lower pricing. And as we build up more volume, we get more economies of scale, and we’re able to offer lower pricing and bring out more brands. It’s a virtuous cycle.

A lot of other competitive operators have swung the pendulum in the other direction and tried to curate the absolute best menu of 10 brands: one edible, one flower brand, one vape brand, and so on. That provides concentrated attention to those brands, but it doesn’t serve the broad, long tail of brands in the market. And it can be a disservice to consumers, because then you’re limiting the market in being able to innovate on new product categories, form factors, types, branding, and et cetera.

SND: How has Nabis’ approach fared in helping to build brands in the California market?

Ning: The brand goes and sells their own product as their own activation and brand ambassadorships. And that tends to work really well for our brands from a growth perspective, because for one, you’d have to basically be the number-one vape brand on a traditional distributor’s menu to even get the time and attention from their sales team. If you’re second or below in terms of brand notoriety, you’re just not getting the love that you deserve for your own brand if you’re outsourcing the sales function. Also, the sales team and the sales function works a lot better if it’s co-mingled with the actual visionaries behind the product and the brand. No one sells their brand better than themselves.

Subscribe to Shanken News Daily’s Email Newsletter, delivered to your inbox each morning. You will also receive the Cannabis edition as part of your subscription.

Tagged : ,

GET YOUR FIRST LOOK AT 2021 DATA AND 2022 PROJECTIONS FOR THE WINE AND SPIRITS INDUSTRIES. ORDER YOUR 2022 IMPACT DATABANK REPORTS. CLICK HERE.

Previous :  Next :