Editors’ Note: This is the transcript version of the podcast. Please note that due to time and audio constraints, transcription may not be perfect. We encourage you to listen to the podcast, embedded below if you need any clarification. We hope you enjoy!
This week we are joined by Vince Ning CEO & Co-Founder of Nabis to discuss :
- How Nabis is providing liquidity to the cannabis market
- California Cannabis Challenges
- Nabis Amazon-like business model
Vince C. Ning, Co-CEO and Co-Founder, Nabis
Vince is Co-CEO and Co-Founder of Nabis, the leading licensed cannabis wholesale platform, supplying half a billion dollars worth of products per year by retail value for over 150 brands to thousands of retailers. With expertise forged at Microsoft and in his prior company later sold to Amazon, Vince is a world-class technologist and entrepreneur who has turned his focus to accelerating cannabis industry growth operationally and compliantly. Vince’s prowess in technology, finance and data analysis have made him an invaluable partner to top-tier cannabis brands across the state of California, where he has helped hundreds of businesses launch and scale. Through his leadership, Nabis, a Y Combinator-backed company, is poised to become the largest national cannabis B2B platform.
Vince, a 2021 Forbes 30 Under 30 executive, currently holds a position as a Board Director of the Cannabis Distribution Association (CDA) to help shape regulations for the betterment of the cannabis supply chain. He graduated from the University of Virginia with degrees in Computer Science, Economics and Statistics.
About Nabis
Nabis is the #1 licensed cannabis wholesaling platform in California, supporting over 150 exclusive brands and supplying the entire network of state-licensed dispensaries with top-tier products. Nabis offers clients lightning-fast fulfillment, warehousing, payment processing, financing, data analytics, sales and marketing services to enable more brands and retailers to innovate, launch and scale. Founded in 2018 by serial tech entrepreneurs Vince C. Ning and Jun S. Lee, Nabis is fueled by cutting-edge technology designed to support cannabis wholesaling between brands and retailers. Nabis works directly with its partners to streamline the regulated cannabis wholesaling process by leveraging actionable, industry-leading sales data and insights to help brands and retailers scale strategically. Learn more: nabis.com
- Website: www.nabis.com
- Nabis LinkedIn: https://www.linkedin.com/company/getnabis
- Nabis Instagram: https://www.instagram.com/nabis_hq/
- Vince’s LinkedIn: https://www.linkedin.com/in/vcning
At Eighth Revolution (8th Rev) we provide services from capital to cannabinoid and everything in between in the cannabinoid industry.
8th Revolution Cannabinoid Playbook is an Industry-leading report covering the entire cannabis supply chain
The Dime is a top 50 Cannabis Podcast
Contact us directly at [email protected] Bryan Fields: @bryanfields24 Kellan Finney: @Kellan_Finney
[00:00:00]Bryan Fields: What’s up guys. Welcome back to the episode of the dime I’m Brian Fields. And with me as always is Kellen Finney. And this week we’ve got a very special guests, Vince Ning, CEO, and founder of Navis. Vince. Thanks for taking the time. How are you doing?
[00:00:14]Vince Ning: Good. Thanks for having me, Brian. It’s been doing well.
[00:00:17] I can’t complain.
[00:00:18]Bryan Fields: Kellan, how are you doing?
[00:00:19]Kellan FInney: I’m doing well, looking forward to talking to Vance and enjoying another west coast conversation for our listeners, is that where you’re located pans
[00:00:26]Vince Ning: out on the west coast. I’m calling in from San Francisco today. I’m in New York. Okay.
[00:00:33]Bryan Fields: I think we’re going to get into it today, but I think that Navis has some aspirations for the east coast as well.
[00:00:38] It’s going to take us a little while to get us up to speed, but we can dive into that. So Vince, for our listeners, can you give us a little background about you and how you got in the candidate?
[00:00:47]Vince Ning: Yeah. I, my background professionally comes from tech and so that’s where, I was trained in college, studied computer science, economics stats pretty quantitatively driven and same with my co-founder actually.
[00:00:58] And when we first moved [00:01:00] out to the west coast, it was actually to join. Tech companies. And so from there, we actually, all, we started out in corporate work in Microsoft, Facebook, just big tech run of the mill. And then from there started doing startups enterprise software as a service companies.
[00:01:13] I sold my last company to Amazon from there, wanted to work on something that was a bit more interesting than just software cannabis was just coming out of the fold in terms of recreational legalization. 2017 or 2018 was when first legal sales happen. So I was looking into the space had a friend who had a cannabis brand and I was just picking his brain one day.
[00:01:36] And I just wanted to meet more and more people in the industry because it was so fascinating to see such a huge industry. Com transition from the illicit markets at the legal market. And of course both my co-founder and I are we smoke weed and we, we were actually best friends growing up.
[00:01:50] Knowing him from high school, we would bond over and it just smoke a Wade. And so it was a kind of a fun passion project of ours to just do some [00:02:00] exploratory market research. New industry that just made a ton of sense. And we want it to just apply our tech skillset to the industry to see how we can help grow it.
[00:02:09] Just knowing how much the market was going to grow, how many operators there were going to be. We just felt there was going to be a lot of complexity and a lot of mess. And so what we wanted to do was get right in the middle of it, into the distribution side of the sector and try to streamline as much as possible.
[00:02:24] And so from that one friend who became our first customer as a brand through just word of mouth referrals, we just grew now to. Servicing over 150 exclusive brands on our platform. And we list them all on our B2B marketplace for retailers to be able to buy products from, vendors and suppliers that we work with.
[00:02:45] And some of our largest new, more notable brands include raw garden Amber valley plus ganja gold bloom. And one of the main values that we like to drive into the market is, of course, while we like to have, the big well-known brands on our platform, we also [00:03:00] really like to help the small operators as well.
[00:03:01] Major difference that you see. In our business versus in, another traditional distribute distributors businesses, we serve five times more brands than any other distribution platform. And it really, we have a strong motivation to helping out a lot of the smaller operators out there to help them be able to launch and scale and sustain.
[00:03:22]Bryan Fields: I’m fascinated by you and your co-founders background, especially with the big tech, right in Silicon valley. When you’re working for those big firms, you’re pushing innovation. And now in the cannabis industry, you’re chopping down the trees and really starting the path forward. So any hesitation to go from, let’s say, big Silicon valley tech to the cannabis.
[00:03:40]Vince Ning: Yeah. I In the beginning it was a lot of just I felt because cannabis, in every way in the back of everyone’s mind is just felt unsafe and insecure. That was definitely my initial, personal hesitation reservation coming into this space. When I, that’s why I started with just like a friend of mine who was in the space since I, we had trust and he [00:04:00] introduced me to more people and I trusted his introductions.
[00:04:02] And a lot of our business today as an infrastructure, as a service business is built on that customer trust. That lifeblood is. What else, what gives people more confidence to refer more customers to us? And that’s what makes this wheel spin. And apart from that, I we honestly thought it was a really cool space.
[00:04:16] The people in the industry were really genuine and real and authentic. The problems were very tangible. Coming from tech, you’re always staring at a screen. I can’t say I, I don’t always stare at a screen today. It w when you’re delivering products, like I started to doing the deliveries myself for better part of the first year of operations you get to touch and feel what your service is doing in the industry and how it’s actually helping.
[00:04:40] Move products from point a to point B safely and securely handling cash collections and processing that it’s a real business. Sometimes, I feel like software lives in the virtual realm and it’s hard to, it’s hard to I guess like it’s hard to touch and feel it.
[00:04:56] So that was something that was really fascinating to us just coming from. Yeah, that’s
[00:04:59]Kellan FInney:[00:05:00] super cool. I want to get into some of the nuances associated with taking the concept from inception, to actually like a fully functional platform. So in other Startup kind of software based industries.
[00:05:12] It’s, there’s not a ton of regulations. So how did you guys tackle all of the regulations and compliance and all of that associated with cannabis while designing the software platform to fit into that very complex environment, if
[00:05:26]Vince Ning: you will. Yeah. It’s almost the a, it’s almost the opposite, right?
[00:05:30] Like now tech is moving towards this whole web three trend where. It’s centralized and there’s no rules. And cannabis is the most regulated. I think fundamentally we came into the space and we honestly, there were people who said they were experts. We’re not experts because the regs had just come out.
[00:05:46] And everyone was on the same playing field. And we actually just had to read the regulations ourselves to interpret it. There were no, there was no court precedents or legal precedents or any rulings on how, various [00:06:00] phrases in the regulations were interpreted. And so we just had to go with our gut feeling understand that there were obviously risks and just be okay with it.
[00:06:08] A lot of that mentality back then, I think was just, we were small time. No one’s ever gonna really, turn the rock and try to get us out of the industry. Cause it’s not worth anyone’s time. But then as we got larger and larger we obviously had to get some lawyers involved and get a couple of additional opinions before we made decisions.
[00:06:25] I think though, when we still a lot of. Regulations and interpretations or and I guess, the decisions you make against those are judgment calls. And w when it comes down to it, it, for us we really just think about our main stakeholders. It’s what do our customers want?
[00:06:42] What makes sense? As, as a, from a business standpoint and then how does it affect, our team? How does it affect our shareholders, our own profitability? And then we just make a sound decision based on those main things, but it really comes down to, what the customer wants.
[00:06:55] Just because I think we. Th that’s like our golden compass in terms of how [00:07:00] how we prioritize decisions.
[00:07:02]Bryan Fields: It’s very smart. So let’s stay in like the early days, take us through what the business plan looked like, and then pitching those initial customers to get them on board with the service and then the iterations and the scaling process, because the complexity of what you’re doing is really challenging.
[00:07:15] And I think some people don’t understand how many variables are being handled at the same.
[00:07:20]Vince Ning: Yeah. The first customers, it, again, it comes back to just what the customer needs. And back then we didn’t have our, B2B marketplace. We didn’t build like a Navis capital solution.
[00:07:29] We didn’t build analytics tools. We just built a website to help people enter orders in that we would deliver and fulfill. And we’d collect payments for and that’s what people needed. Like they didn’t need some fancy software to tell them like, oh, these like cool analytics, they didn’t need AI. They just needed some way to deliver their products from point a to point B compliantly and get paid.
[00:07:51] And and we came in as those trustworthy guys. We’ll do all of that and not steal from them and deliver just a good quality of service for [00:08:00] fulfilling their products. That was the initial pitch. We would do the deliveries ourselves just to give that sort of high touch experience and build a relationship directly with the execs at these companies.
[00:08:10] And through that, one brand at a time, we just pieced this whole thing together. And, we were learning from them just as much as they were. They were using our service and that’s it, when, whenever we ran into snags, we would just, build features to cover the cover, all the, edge cases that came along and logistics.
[00:08:28] And over time. As these businesses and small, like startup upstarts on the brand side or on the retail side started. They started telling us, oh, we need financial solutions. We need analytics tools because my team’s getting too large. I don’t know how to, I don’t know what’s going on in my business anymore.
[00:08:46] And they just needed more more tools that help them at scale. And so that’s how we started to build out and flesh out the rest of our platform. And that’s what currently exists today. And, it makes sense when you look at other industries, I [00:09:00] would say the business that we have.
[00:09:02] Similar to the fulfillment by Amazon business. And that exists in a very mature market in CPG. And, as the cannabis industry evolves into a more mature market, that’s the solution that will likely apply here as well. I think we’re moving in the right direction in terms of how we’ve built that platform and how we started out piecemealing it to.
[00:09:24]Bryan Fields: Yeah, I think it’s so smart that you use customer feedback in order to build those additional features and tools because right, let the customer tell you what they need and then build it around the support them, because you’re right. The more you support your customer more, they’re going to come back and rely on you.
[00:09:36] And the more you’re an integral part of the value chain. So let’s talk about some of those tools. There’s gotta be some really incredible data insights you got on those tools. So what data insights can you share and what insights should operators be thinking more?
[00:09:50]Vince Ning: Yeah. I think especially in this day and age, I would say cashflow is everything.
[00:09:55] I think people have, more or less figured out and people are really smart about how they build their [00:10:00] products what categories they want to invest in. I think right now on the product trend side of things, people generally are on the same page that, infused pre-rolls are really popular.
[00:10:09] I think beverages are on the rise, obviously there’s still infrastructural challenges. And so there’s general trends that people are aware about. And, I think our data is definitely suggests that as well. I think the main thing that people really need to pay attention to right now is Getting paid on time because ultimately that’s the lifeblood of their business and ours too, for that matter.
[00:10:28] And a lot of the tools that we’re building that we’ve built recently and in the near future are targeted towards understanding credit worthiness of who. With suppliers are selling to on the retail side so that they can make the best call in terms of, how much to sell to that store or what terms to give to them.
[00:10:46] And whether or not to use Navis capital to help provide liquidity for them, for their business. And, A lot of that falls within the backdrop of, the capital market environment really shutting off, public markets are down, not even just within cannabis, [00:11:00] but just in the broader economy, tech stocks are down 30 to 50% and it’s really a, yeah, it’s a bloodbath out there and it’s hurting private markets too.
[00:11:09] So with a dearth of capital coming into this space businesses just really need to survive on their own. And for us it’s we don’t, we’re a platform, so we don’t own our brands, any brands, we don’t take equity, stakes and brands. We it is also our job beyond just fulfilling and the, the I guess like analytics and all that sort of stuff.
[00:11:25] Our job is also to help keep our customers alive too, because we’re nothing without the operators on both sides of our market. And those are, I think that’s the current trend in terms of our feature development, as well as what we like to share in terms of how we’d like to shape the market and their decision-making when they make sales from an analytics perspective, I want to stay
[00:11:44]Kellan FInney: on the capital service offering that you guys is put together.
[00:11:48] What was what was the biggest challenging challenge putting that whole kind of department together in your guys’ organization? Because. Hey, it’s not easy raising capital for any startup let [00:12:00] alone in cannabis, especially with all the risks associated with now. Now you’re pretending to be a bank almost in that
[00:12:07]Bryan Fields: same
[00:12:09]Kellan FInney: like gray area marketplace.
[00:12:11] What were the conversations with some of the backers and the entities providing that, that capital for liquidity in the marketplace? What were those conversations like?
[00:12:19]Vince Ning: Yeah, I think for creditors, for that business, Yeah, I, I think everyone see saw the opportunity because of the fact that banks can’t actually touch the space in broad a, from a broad, broader perspective.
[00:12:31] And so as a result, our business, because we do the fulfillment because we do. The payment collections on behalf of all of our vendors and suppliers, we had this any problem arbitrage, or rather like we had unique insights into how credit worthy or retailer was.
[00:12:46] And it was very constant feedback because of our day-to-day collections activities. Like we knew. How timely this payment was going to come from this particular retailer versus the next. And so that was something that, that’s where the data really helps [00:13:00] in terms of our underwriting and our ability to minimize credit risk.
[00:13:03] And beyond that, In cannabis, people are people really just need cash and they don’t necessarily want to take out a huge loan against their business since many businesses aren’t profitable. And so this was a way, so we have a, basically a factoring business and it’s a way for brands to be able to really get liquidity on a more granular basis.
[00:13:25] And when you call it
[00:13:26]Kellan FInney: micro, like almost like Microsoft.
[00:13:28]Vince Ning: Yeah, in a way, it is very like, each invoice average is about three to 4,000 bucks and that’s how small the little transactions are, but, and then brands can use it on a case by case basis. So they don’t necessarily have to encumber their entire balance sheet with a huge term loan and not be able to pay it back.
[00:13:45] Run the risk of losing ownership of their business. This is a way where they can also just use their existing fulfillment partner to also help with their financing too. Becoming more of this all-in-one platform for them made it easier to yeah, made it easier for them to just have basically just [00:14:00] work with one party to get all these things done.
[00:14:01] And launching the product was really just a, we thought about a lot of different ways to do it, but we just. Having it be done in line with the order and collections lifecycle. Like a unit level life cycle was just the best way because ultimately for it, it just streamlines the payment side for us rather than having to underwrite every single brand every single time.
[00:14:22] Invoice, regenerated, this is cookie cutter. We could generalize it. And we found like a scalable, repeatable way to do it. So yeah and, we basically just, I had a so some of our investors invested in other factoring businesses and, put me in touch with them. I got into calls with them, just gleaned some advice that they had and some of the initial infrastructural setup that was required and, basically just set the same thing up.
[00:14:43] And it took about a few months and we launched in market with a couple of customers. And before you knew it when people sign up for distribution, now they immediately turn on this financing service because at the end of the day it cost them nothing to have it on. It’s only if they decide to use it.
[00:14:57] So it’s always like a, it’s always an added. [00:15:00] Are most of the
[00:15:01]Kellan FInney: customers on the retail side? Sorry.
[00:15:03]Vince Ning: Currently not yet. Currently. Not yet. Each transaction, includes a brand and a retailer. But right now we basically we underwrite the retailer because they’re the ones really paying.
[00:15:14] Yeah. Yeah. But then the brands are the ones who pay the fee for the for the oh, okay. Yeah. That’s like both sides are going to get. Yeah, exactly. Yeah, because the brands are the one that’s getting immediate liquidity on
[00:15:28]Kellan FInney: and the retailer is taking the risk. Because now they have to pay back.
[00:15:31] So each
[00:15:32]Vince Ning: everyone’s got skin in the game. Yeah, exactly.
[00:15:36]Bryan Fields: It’s got to be such a challenging process. Can you lay out like a little more of a scenario for that for our listeners to try and understand like exactly how that works? Because I think it’s such an integral part, especially given like the cash capacities in this.
[00:15:47]Vince Ning: Yeah. So the sort of a example would be brand a, would sell, let’s say a hundred thousand dollars worth of products in an order to retailer a and their [00:16:00] outcomes, like an invoice. And that a hundred thousand dollars. Might be sold on, let’s say net 30 terms, which means the retailer has 30 days to pay it back.
[00:16:08] After they have the product, they get to sell through the product, they’ll probably have the cash to pay it back. The brand, oftentimes these are very small businesses who, a hundred thousand bucks might be all the money they have. And so they put it on the inventory, they shipped it off.
[00:16:22] They don’t have the money to go start producing their next batch of inventory. And so that’s not a good way to build a brand. And so for, because ultimately what would happen is after the 30 days, perhaps the retailers sold through ideally it has sold through the product that shelf space goes empty.
[00:16:38] But as a brand, you don’t want gaps in product availability on the stores of shelves. And they want to be able to start producing their next batch of inventory before that product sells through. And so what they’ll do is they can take that invoice. It’s an asset, it’s an account receivable.
[00:16:54] They can sell it to Navis. And that is we’ll underwrite and say, Hey, okay. As long as it’s retailer, we know we’ll pay on [00:17:00] time. We will basically buy this invoice and then give, and then basically pay the initial. In advance on behalf of the retailer first, but we would pay it out at a discount. And that, that’s where we make our money.
[00:17:10] So we pay it out 97 cents on the dollar. The brand gets their their 97 cents. And they can start doing whatever they want with it, running their business, paying payroll started producing the next batch of inventory. And then we will wait the next 30 days to collect from the retailer and then we’ll make that spread that difference between the 97 cents and the whole dollar on that invoice.
[00:17:31] And so that’s, one life cycle of the transaction, but it helps provide a lot more like liquidity in the market, as well as improve the life cycle of the sort of like velocity of inventory through the supply chain. It’s such a
[00:17:45]Bryan Fields: critical piece of the puzzle. And I’m curious to know, I, obviously you can’t share from a business perspective, how much as a percentage wise of your business that’s become, but I’d assume that’s probably a really, that’s becoming bigger and bigger as we continue, because that has to be such a massive need on a day-to-day basis.
[00:17:59] Because [00:18:00] obviously what we’ve seen in California is challenges across the board and that just being one of them. So let’s stay on California. Can you describe some of the challenges that, that California operators or.
[00:18:10]Vince Ning: Yeah. There’s tons. And we feel it our customers feel it. I’ll say the, I think the biggest one, the biggest challenge right now is just incredibly high taxes.
[00:18:19] And and the problem is it’s actually starting. At the top of the supply chain with cultivators. So right now there’s, ever since the inception of the California market, the record recreational market, there’s been a cultivation tax and an excise tax and cultivation taxes were charged based upon the weight of flower that was produced.
[00:18:38] After last year there’s been this overproduction over supply of flower That’s coming into the world. The average price per pound has fallen significantly, but the weight is still the same, if not more. And so what ends up happening is the taxes don’t fall in line with the average price per pound.
[00:18:56] And because you’re still paying the same taxes, but making less money we’ve [00:19:00] heard cultivators that saying that they’re paying up to about 40% of what they have their revenue in cultivation tax alone, not to mention. All the labor costs and, the actual cost to produce this product.
[00:19:12] So you know the state, I get it, while they’re trying to make their cut of revenue from taxes from operators also can’t smother the economy and, kill the goose that laid back, and right now there’s been a huge coalition and lobbying effort to actually get the cultivation tax removed.
[00:19:28] And make adjustments to the excise tax portion as well when products are sold at retail so that, operators don’t get squeezed. And it’s, I think in the near term operators being squeezed is obviously a problem in the longterm, I think for the overall collective of the cannabis industry.
[00:19:43] The legal cannabis industry, it just, what operators will have to do is just increase pricing to make their ends meet and who ends up bearing the cost is actually the consumer. And so when the consumer goes and buys weed they will choose to buy from the illicit market because there’s no taxes being, being applied to their own and [00:20:00] costs.
[00:20:00] And it’s oftentimes, the same quality product. And at the end of the day, I think what the, what the government can do in the long run is just lower. Some of their taxes keep the business alive and grow, keep the supply chain alive and sustainable and growing, which will ultimately help combat the illicit market.
[00:20:14] And that, that’s the, I think that’s the biggest challenge right now in the California. I agree. And I think another
[00:20:20]Kellan FInney: thing too, we’ve some of our partners and clients we talked to out in California, they were like, we’re not even gonna, not even a harvest this year. I’m not even gonna cut my crop down because the moment they crop it, cut it down.
[00:20:31] Then it goes into that metric system where now it’s taxable. And they’re like, we’re not even, I’m not gonna make any money if I cut it down. So they’re just letting their plants, they just let their plants die in the soil because they literally were going to lose their business if they harvest it, which
[00:20:43]Vince Ning: is wild to me.
[00:20:46] Yeah, there’s tons of patients out there that need this plant. And to let it just go to waste because of taxes no government reform, it just it’s silly. And I think a lot of the problems like this didn’t really flare up or [00:21:00] till now, because there, there’s obviously the market forces of over supply of product.
[00:21:05] The other is just, there’s a lack of funding coming into the space. As mentioned earlier around, public market evaluations and investors being a little gun shy these days in terms of making writing those big checks. And so those big checks were the ones that were masking the problems before.
[00:21:18] Cause people were just running on profit businesses, but as long as they were getting money from investors, they could keep their business alive. But now that, that, pool of money is siphoned off. You really just have to run a sustainable business. And they’re seeing that this is, this is just a major cause of heartburn for a lot of lot of businesses.
[00:21:37] It turns
[00:21:37]Bryan Fields: out it’s really hard to run a profitable business on the government is just absolutely
[00:21:40]Vince Ning: destroying you with their taxes. Yeah. Yeah, no, it’s crazy. It’s crazy. And overregulation is just a, it’s not helping anyone.
[00:21:48]Bryan Fields: And I wonder too, right? Like when you have those conversations with them and you tell them, if you continue to taxes at this level, we’re going to let our products dine. You’re going to kill you in. There’s gotta be some thought in their mind where if we kill the industry, you’re not going to get paid [00:22:00] on those fronts. And then all that tax money goes away either way.
[00:22:02]Kellan FInney: Other companies decided to leave California because of the taxes, to Texas or something like that. Okay.
[00:22:09]Vince Ning: Yeah. Yeah. It’s true. It’s true. Th the cost of running a business in California is probably the highest in any state in the us, just from a tax perspective, but also like labor costs cost of supplies. Yeah, it’s just, it’s it’s something for
[00:22:23]Bryan Fields: your personality to,
[00:22:24]Vince Ning: yeah, exactly.
[00:22:25] Constant living,
[00:22:27]Kellan FInney: probably the best access to talent though.
[00:22:28]Vince Ning: Enforced. That’s true and great weather.
[00:22:34]Kellan FInney: That’s right. There’s gotta be something good about California.
[00:22:38]Bryan Fields: No. So slightly switching gears. How does the distribution work and what type of paperwork goes in on the, on those distributions? Is there tons of paperwork for all the products?
[00:22:47] How does.
[00:22:49]Vince Ning: Yeah, there, there actually is. And that it’s actually like such a really annoyingly like a small but major, but like really impactful problem. For our fulfillment platform, what we [00:23:00] do is we’ll intake products from cultivators manufacturers to always final package products.
[00:23:05] Some most often. Cannabis like vapes, flour, edibles, whatever. And then, there’s also like batteries and like ancillary products to and merge. And so we will store and centralize all of that inventory in our warehouses, across the state. We have over 71,000 square feet. We’re actually launching a new 86,000 square foot facility.
[00:23:21] So we’re going to be able to service about 30 we’re right now we’re about 14% of the California market that we serve. And we’ll be able to serve about 30% with this new facility from a storage pass perspective. But what that will be able to do is after we, we’re, we hold more and more inventory.
[00:23:37] We, all those products are listed on our marketplace. Retailers can purchase from our brands directly and or, through our marketplace or by contacting a sales rep. And once that sales made. Pick pack, ship the products on a two day turnaround time to retailers across the state.
[00:23:53] So we really try to provide this, like two day shipping, Amazon prime type of experience for the cannabis industry. So that way [00:24:00] stores don’t have to store products for too long. Oftentimes they have small backrooms anyways. They can get fresh or product because products moving faster. And they sell through the product.
[00:24:09] They pay. We, you brands can choose to factor it or not. And on a weekly or bi-weekly basis, we’ll pay out the brand. And we’ll manage all the taxes, the packaging compliance, all that sort of stuff goes through rigorous checks in our system to make sure that when products get released from the wholesale market into the retail market.
[00:24:25] There’s utmost consumer safety and compliance with the regs so that, no one has any sort of legal issues with respect to their products that they produce. So that’s like the unit level life cycle of an order and cash getting paid out and we came up with this model as a result of just, we want it to just build a lot of efficiencies and economies of scale.
[00:24:43] Prior to us existing, pretty much brands were just doing their own distribution. And thinking about thousands of brands working with thousands of retailers that N squared problem people, if everyone delivered their own products, the number of deliveries that would occur in the state would be insane.
[00:24:59] And so we try to [00:25:00] bundle up. Yeah, orders and brands as possible into a single order. So it saves everyone time. That’s the fundamental value of our logistics business.
[00:25:09]Bryan Fields: Yeah. California doesn’t need any more traffic than
[00:25:11]Vince Ning: it already has. Yeah. Oh, I was going to mention that the small button knowing problem is the the fact that the compliance paperwork, you need everything from a shipping manifest that’s wet ink signed.
[00:25:20] And then you also need like the cos like the testing results oftentimes and I’d say those are probably the two main things, but those testing results are oftentimes dozens of pages. The manifests could be pretty long too. And we have to, we, our system integrates with metric, which is the state’s track and trace system.
[00:25:37] And we input all the order information to there before we make the transfer in the delivery, but the manifest has to be printed out in wet ink signed and the state ever audits you for those records, you have to scan it back in to send. And so it’s just, the amount of paperwork that gets printed and reprinted sign and rescanned in is just a hugely burdensome.
[00:25:59] I would say as a [00:26:00] business, we spend hundreds of thousands of dollars a year on just paper and printing. And so from an environmental perspective, or just a cost perspective in general, it’s that, that is something that I would love to change. There’s larger problems than that right now, which is the sad part, but that’s like an obvious low-hanging fruit, in my opinion, to just get, to just be allowed to do signatures and electronic paperwork for the compliance side of things is a metric working on a
[00:26:23]Kellan FInney: software platform that should be able, at DocuSign, right?
[00:26:26]Vince Ning: Yeah, exactly. It’s when ups and iPad, right? Yeah, exactly. Like when ups comes to your door, deliver a product, you sign on that little pen with their little stylist and their and their little tablet and cannabis.
[00:26:37] Can’t do that. Because the regs say you have to print these things out and get weddings.
[00:26:43]Bryan Fields: Are there any limits when you’re picking up product from someone that like, is it total volume limit? Is it total number of limits? What, like what sort of constraints are there?
[00:26:50]Vince Ning: It’s really just a capacity in our vehicles on the wholesale side.
[00:26:53] There’s no limit to how much product you can have in your vehicle for delivery on the consumer delivery side. [00:27:00] However, I believe it’s right now, maybe like $3,000 that you can have in your car at any given time before you have to go back to the facility to pick up more product. But yeah, on the, for the whole, for wholesaling there’s no there’s no limit on orders.
[00:27:13]Bryan Fields: What happens if a police officer pulls over one of your wholesale vans? That’s gotta be just an all day incident of the paperwork. So how does that
[00:27:20]Vince Ning: work? Yeah, I think it’s happened in the past for us and. The paperwork definitely helps. They generally just let us go.
[00:27:27] They see that we’re professional. We have binders, we have iPads. We have, everything in the car, GPS, locator, security cameras. It’s not really, it doesn’t look like. Some cartel driving around products at all. And we w th the driver will call our dispatchers are in our team back at the warehouses and get further information verification as needed.
[00:27:49] But generally, as long as we show our Distribution license and we show the invoices and manifest or I’ll in order they, they usually just let us go your drivers
[00:27:58]Kellan FInney: aren’t just drive around with a safe, they don’t [00:28:00] have to go to, so they blow over and he’s I can’t open
[00:28:02]Bryan Fields: it.
[00:28:03]Vince Ning: Yeah. And that is exactly how to have safe, that are bolted into the floor.
[00:28:08] And it’s a, drop-in only safe. So once it’s in, can’t come back out until get back to our facility and. Only a couple of key folks at the facility know codes to exactly how it is. So even if people get robbed, drivers get robbed on the road, they actually can honestly say they cannot get into the safe.
[00:28:28]Bryan Fields: Yeah, it’s probably a very interesting interaction with the police officer. I can’t get into it and I’m just really sorry about. I don’t know the,
[00:28:34]Kellan FInney: and they’re like, ah, I don’t believe you.
[00:28:38]Bryan Fields: What is the biggest challenge setting up your business that most wouldn’t.
[00:28:42]Vince Ning: I would say a big part of it is recruiting cannabis while everyone sees it as a huge opportunity.
[00:28:49] And a lot of people smoke weed, but two thirds of all Americans support cannabis for them to kind of change gears on their career and work full-time at a cannabis [00:29:00] company. I think it would still raise eyebrows for a lot of people. And this industry amongst any new industry or amongst, any other new industry needs that good talent coming from other industries who have experience in logistics, supply chain in CPG, in product creation, branding.
[00:29:17] And a lot of those people just won’t join the cannabis industry because it’s still federally illegal. And whether it’s moral or not, or if it’s just a legal thing some people, America was built on the backs of immigrants as a melting pot here, and, immigrants are oftentimes afraid of.
[00:29:32] Being a part of cannabis because it hampers their ability to get a green card. It’s, there’s things like that really restrained good talent from coming into the space and we need always constantly our job is, and I think I’ve built companies before. This is the first time I think I’ve done.
[00:29:45] I well, not the first time, but I think I would say this is the company I’ve done the most, education about the product on in terms of not just our services, what we deliver. Just because I think it’s important that people who work at Navis and people who are thinking about even [00:30:00] investing in the space understand that this is a product that’s worth having around in society.
[00:30:04] And it’s it was wrongly put in a box. Back in the eighties,
[00:30:10]Bryan Fields: Amazon used their data inside trends to release products, any future roadmap, ideas of nevus releasing consumer facing.
[00:30:18]Vince Ning: No, not really. It’s always been a thought and people always ask us about it, the, one of the big things, one of the big reasons we’ve been able to scale our platforms, to the extent that we have today is because we’re grounded in the sick Gnosticism, where we have a balanced portfolio.
[00:30:33] We have competitive brands shipping on our platform, we don’t do the sale. For them. So we’re not picking sides. We don’t have our own brands. We don’t compete with it. We don’t create conflicts of interest amongst the customers we we fulfill for. That’s, for some other distributors who might do that they can pretty much just fill out a menu space of, one brand in each category and at each price point, and then you’re pretty much maxed out on your menu.
[00:30:55] And then you just have to basically keep pumping. Same 20 brands. For [00:31:00] us, we want it to help out that longer tail of the market. Cause we wanted to give everyone an equal opportunity to get to market because we also believe that given how early days it is in the industry and how much R and D still has yet to come for the cannabis plant.
[00:31:13] There’s so many more products that can be created and commercialized that why limit the market now in terms of consumer choice. And so we. Continue to have this open platform for small business operators to try their hand and experiment with new products,
[00:31:27]Bryan Fields: building out the technology stack, what was one concept or fact that surprisingly was overwhelmingly harder than you initially.
[00:31:37]Vince Ning: Ooh. I would say it’s definitely the inventory management side because it has to abide by compliance standards and there’s, unique skews and batches and COIs, and there’s different ways, depending on the product category you could have. Various different it’s to define one unit, it actually requires so much metadata to actually to to describe.
[00:31:58] And so that part, I think [00:32:00] we built our inventory, rebuilt our inventory management system, like three different times just because the regs kept changing and we needed to add more and more fields to our database. But I think we’re in a good place now with our location-based inventory system and there was very little inventory fidelity issues.
[00:32:16]Bryan Fields: Since you’ve been in the cannabinoid industry, what has been the
[00:32:18]Vince Ning: biggest misconception? I would honestly say it’s just a, how harmful the product is. It’s I think so many people in other generations, even my parents will still question whether this thing is legitimate or not, and whether it’s harmful to your body.
[00:32:32] Studies have shown. Just so much better than what people drink day, eat everyday, like alcohol. And yeah, I think people just don’t believe that it’s still,
[00:32:41]Bryan Fields: before we do predictions, we ask all of our guests, if you can sum up your experience in a main takeaway or lesson learned to pass onto the next generation, what would.
[00:32:51]Vince Ning: I would honestly say despite what kind of business you’re building relationships are key. They spout getting out there, meeting people in the industry, [00:33:00] hearing what they’re about how they view the industry and how they want to shape it. And if that sort of informs you on how to.
[00:33:05] Bro and build your business to, to serve them as potential customers as well. And that’s definitely, always served me well, even as a tech guy who, you know who I guess for all intents purposes, likes to just build a website and hope the customers will come. I think it’s important to actually learn from them in person.
[00:33:20] And see what their goals are. So that’s been invaluable as an entrepreneur, I think just to still continue to do. That’s all
[00:33:28]Bryan Fields: set. All right. Prediction time. Vince will the cannabis industry follow the same distribution model as the alcohol industry? And if so, when?
[00:33:36]Vince Ning: I think it will be different.
[00:33:37] Mainly because, when the alcohol industry started. That was before the invention of this thing called the internet. And I think with modern tools and technologies, you can actually build a much more sophisticated and efficient supply chain especially for distribution. And so while the regulations might shake out to be similar yeah.
[00:33:56] There’s obviously, I think there’s ways in which those regulations [00:34:00] can be adapted today. That with people who are making those regs, their thinking has the, modern technology baked in mind. I think it’s, it’ll be a much more efficient and cost-effective supply chain.
[00:34:10] I think then the alcohol Carolyn.
[00:34:14]Kellan FInney: Oh, that’s a good question. Pardon me, says it pro it might not follow the alcohol industry distribution standpoint based on what the United States postal service is like technically allowing, right? They’re actively involved in like these hemp shows and stuff for shipping like hemp.
[00:34:32] And so they just say, put a COA in it and you can shift your hand. And so if the us postal service is allowing you to ship your own hemp, flower, cannabis flower with a COA in it, that’s significantly different than the alcohol industry. Because if I go to the postal service with a bottle of liquid.
[00:34:48] They tell me to go kick rocks because it’s illegal for me to send like a bottle of whiskey to my dad in a different state, like completely illegal for me to do that on my own. So I think that it could potentially [00:35:00] be handled significantly or it will be handled before. And I also think that goes with my prediction, that Amazon will be involved in the industry as well.
[00:35:09] So I think that, yeah,
[00:35:12]Vince Ning: cause there’s
[00:35:12]Kellan FInney: delivery services for I can get cannabis delivered to my house and that’s not as robust in the alcohol space. Yeah.
[00:35:20]Bryan Fields: What do you think? Obviously Amazon’s coming, right? Like they’ve made pretty, pretty aggressive ways. And from a logistics standpoint, they’re as good as anyone.
[00:35:28] So I don’t know. I think it all depends on what ends up happening, right? What’s the easiest to regulate and what’s the most profitable for the government and what’s the least amount of effort in order to get started. It’s really hard to even make those sort of assumptions on that. So I’ll go ahead and say, yes, just to be different.
[00:35:46] so Vince for our listeners, they want to get in touch. They want to learn more about you and your company. Where can they get.
[00:35:52]Vince Ning: Yeah. So go to navis.com and ABI s.com. You can find out all about our services, what we do, what we’re all about there, and then know, if you [00:36:00] look at whether you’re looking for a job or you’re looking to use us as a platform the other is we have an Instagram Navis underscore HQ and you can see in real time what our team’s up to all the time.
[00:36:10] Cool. Yeah. We’ll link those
[00:36:11]Bryan Fields: up in the show notes. Thanks so much for taking the
[00:36:12]Vince Ning: time. Yeah. Thanks so much. It’s been fun.
