Nabis Raises $5 Million To Take The Cannabis Industry To A New High

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The recent legalization of cannabis has created a profitable market opportunity within the United States. However, cannabis brands and vendors have struggled to take advantage of their great legal fortune due to self-distribution complexities. Without a streamlined, software-enabled solution, the U.S. cannabis market’s lucrative promise will go unrealized for both producers and consumers. Vincent Ning and Jun Lee noticed the distribution challenges within the cannabis industry and started Nabis to address them. Nabis is a software-enabled cannabis distributor connecting manufacturers and cultivators to brands and vendors. The San Francisco-based startup has raised $5M in a Series A round from Y Combinator, Stanley Tang, Paul Buchheit, Justin Kan, Babel Ventures, Liquid 2 Ventures, and Soma Capital.

Stanley Tang, cofounder of DoorDash, says, “My investment criteria is very simple: I look for great founders. Vince and Jun are two of the most mature founders I've ever met. They have the rare combination of grit, ambition and thoughtfulness that's needed to build an enduring company.” Justin Kan, cofounder of Twitch, adds, “I invested in Nabis because I loved Vince and Jun as founders. They have incredible drive and their mission to bring modern distribution tools to the legal cannabis market is inevitable.”

Nabis plans to pursue a three-pronged strategy to further grow its business with the Series A funding it has raised. The three facets are economic, social, and environmental. The absence of supply chain infrastructure specific to the cannabis market’s needs allows Nabis to fill in the void through software-enabled coordination of the cannabis distribution lifecycle from production to delivery. Socially, the legalization of marijuana in various contexts had left minority communities unable to cash in on the green gold rush, as they had been disproportionately jailed and sent to prison for violations of state law when cannabis was previously prohibited (cannabis is still illegal per federal law). Ning and Lee recognize how past legal disparities impact Black and Latino entrepreneurs from profiting in today’s cannabis market. The cofounders also understand that minimizing the industry’s overall environmental impact is a competitive advantage. As more consumers become concerned about their consumption’s effect on the environment, they become more loyal and trusting companies that minimize negative externalities related to the manufacture and sale of their product or service.

Ning says, “As young Asian-American founders working in an industry dominated by traditional supply chain professionals, we have placed a strong emphasis on diversity and social equity. As Founders in an industry built on the backs of minority groups, we acknowledge the atrocities that people of color continue to endure. Violence and prejudice have no place here, and Nabis is committed to supporting efforts to build a foundation of equality in the cannabis industry.”

The cannabis startup has positioned itself well to execute on the three facets of its strategy. Economically, Nabis handles distribution through its software, allowing brands and retailers to focus on their competitive advantage of producing the best cannabis relative to one another. Nabis customers don’t have to worry about investing labor and capital in building out their distribution infrastructure and processes to manage communication across crucial players in the market. On the social impact front, it has dedicated a portion of its revenue towards various efforts to support minority entrepreneurs seeking to grow their cannabis businesses. Not only does Nabis’s role as a centralized distributor has economic advantages, but also environmental ones. Brands and retailers that rely on Nabis for their distribution needs don’t have to spend money on their gas, electricity, and equipment to get started. This results in much lower carbon emissions in the production, sale, and consumption of Nabis-distributed cannabis products.

Lee adds, “Nabis has been financially supporting an equity-owned cannabis business in Oakland since the inception of our company, contributing monthly rent for their business operations to this day for the past three years. Also, we offer 20% discounts on standard distribution pricing for equity-owned brands across our customer base.”

Ning’s and Lee’s complementary skill sets enable them to conceive their business strategy and execute the necessary technical tactics. Ning is a former Microsoft software engineer and previously sold his first startup to Amazon. Lee worked at Facebook as a software engineer before starting Nabis with Ning. The two have been able to recruit a stellar team with backgrounds from “Microsoft, Facebook, Amazon, Deloitte, Carlyle, Coatue, Gartner, Centerview, Maple, Harvard, Princeton, Penn, and the London School of Economics (LSE).”

Ning and Lee state, “We are childhood best friends. We trust each other like brothers and know that we can’t just walk away from problems but face them head-on. Whenever we have conflicts, we try to come to a compromise, which typically works. Other times, we test both solutions, and we each take full accountability for both their successes and failures. In business, you have to take bets, so there’s nothing better than to have a bias for action.”

Want news on the hottest startups delivered to your inbox? Subscribe to my mailing list, Founder to Founder (F2F): f2f.substack.com. Check out my latest F2F stories: 

• Startup Spotlight #82: HYP
• Case Study: Learn How Fluent Understood User Emotions To Guide Their Product-Market Fit Journey