Editor's note: As part of the Bay Area Inno Awards, the San Francisco Business Times and Silicon Valley Business Journal are honoring startups across the region's innovation space. Here's the honoree in the cannabis tech category.
When California legalized recreational cannabis seven years ago, Vince Ning saw an opportunity.
The cannabis industry still faced a lot of regulatory uncertainty, especially at the federal level, but Ning jumped into the fray and started learning everything he could about it.
During the day, he would drive around making deliveries for a friend’s operation out of Humboldt, and after hours, he began developing software products for cannabis businesses.
In 2018, he co-founded Nabis with Jun Lee. Ning studied computer science and economics at the University of Virginia and previously worked as a software engineer at Microsoft. Lee had previously worked as a software engineer at Meta after studying computational and applied mathematics at Harvard.
The company started with providing fulfillment services for dispensaries and now offers a full suite of products and services, including wholesale and distribution, data analytics, sales management, cash handling and other financial services.
“We really want to power all the customers we have, and ultimately get as much cannabis into the market, legally, as possible,” Ning said.
Nabis recently opened an 87,000-square-foot warehouse in Woodlake, a Central Valley community located around 240 miles southeast of San Francisco.
The Woodlake warehouse is Nabis’ third distribution center in California and now operates as the company’s central distribution hub. It also has a 55,000-square-foot warehouse in Commerce City and a 26,000-square-foot warehouse in Oakland.
Nabis says it has captured 22% of the state’s cannabis market and works with 300 brands and 1,300 retailers with operations in California. The company became profitable last year, Ning said, but they’re gearing up to invest heavily in expanding.
New York is next, Ning told me. He even moved to the Empire State last year to start preparing the company to expand there.
New York legalized recreational cannabis in 2021 for adults who are 21 and older, and the state started issuing business licenses and approved new regulations last year.
“We really want to stay focused on one state at a time,” Ning said. “It took us several years to get California up and running to a sustainable profitability state. I suspect New York, pending any regulatory frictions, should be faster just given we’ve learned so much from California. Our software is already built, and we understand how to operate a logistics business in the cannabis space and follow regulatory compliance.”
At the federal level, cannabis is still classified as an illegal Schedule I substance along with heroin, LSD, ecstasy and peyote. In October, President Joe Biden directed his administration to “review expeditiously” how marijuana is regulated under federal law, though he didn’t call for full legalization.
Schedule I is “meant for the most dangerous substances,” the president’s directive said. “This is the same schedule as for heroin and LSD, and even higher than the classification of fentanyl and methamphetamine — the drugs that are driving our overdose epidemic.”
Several bills have been introduced in the U.S. House and Senate in recent years that attempt to decriminalize cannabis, lower its federal classification or change banking rules, but proposed reforms at the national level face uphill battles.
“We typically plan five years out, and with this business in mind, we have two different plans based on regulatory outcomes,” Ning said, particularly at the federal level.
For now, Ning is planning Nabis’ next steps in New York and is eying Florida or Illinois as potential new markets to enter when the time is right.
Nabis has over 300 employees across its operations, primarily in California at the moment.
About Nabis
Location: San Francisco
Industries: Cannabis, logistics
Founders: Co-CEOs Vince Ning and Jun Lee
Founded: 2018
Funding: $50M
Major investors: Y Combinator, Babel Ventures, Soma Capital, Artemis Growth Partners, Delta Emerald Ventures and Canna Angels.
Why they were chosen: Nabis is serving a high-risk, highly regulated industry that is becoming more mainstream as local and state governments legalize recreational sales and consumption, despite continued federal uncertainty around its classification.
