California distributor Nabis is New York bound

Cannabis distributor Nabis is looking to apply the lessons and strategy that brought it success in its home state of California to a new market: New York.

The Oakland-based operator announced its entrance into the Empire State earlier this month, after expanding into Nevada earlier this year.

Nabis CEO Vince Ning sat down with Green Market Report recently to share his thoughts on how the company managed to survive the California market and why it sees opportunity in the up-and-coming New York cannabis industry. For starters, he sees a lot of parallels between the two.

“It definitely felt and looked like a lot like California, in that it resembles more of a free market than a limited license market in a lot of the medical states,” Ning said of New York’s recreational market structure, which has no specific statewide license caps. “That was a big plus.”

Not only that, Ning said, but it quickly became apparent a few years ago that the Big Apple is where a lot of the bigger-name cannabis brands wanted to establish a foothold, so it only made sense for Nabis to  also make the move in continue serving their same California customer base as they made their way into the East Coast market.

“We do a lot to talk to our brands and retailers around where they want to go next. And a lot of them said New York, so it was pretty simple to just follow what our customers wanted,” Ning said.

There’s also already plenty of business demand for distribution services across New York state, not only in New York City, he emphasized. He estimated that half of the actual cannabis demand from consumers is upstate.

“Most people, when they think about New York, they just think about New York City. But interestingly enough, half the volume of the state actually exists upstate, and there’s bigger retailers from a footprint perspective upstate right now than there are downstate. And they’re more profitable too, because real estate’s way cheaper,” Ning said.

One of the major hurdles of both coastal cannabis markets, Ning acknowledged, is they both have immense illicit sides to contend with, including thousands of unlicensed storefronts, delivery services and cultivators that all feed each other.

“If you have an illegal market that steps on the toes of the legal market, it definitely digs into our side of the pie,” Ning said, noting that in California, the size of the illicit market hasn’t changed much since the legal market launched in 2018.

However, Ning’s hopeful that won’t prove to be the same case in New York in another five years, and said he thinks using civil enforcement pressure against landlords in places like Manhattan will prove more effective than it has in places like Los Angeles.

But that’s still up to state officials to make it a reality, he said.

“New York’s market is just still pretty nascent,” Ning said. “There’s definitely some differences where I think New York has the opportunity to really make a better dent in the illicit market, but jury’s still out on whether that’s going to happen.”