On any given day, more than a million dollars worth of cannabis products are on the move at the Nabis warehouse in Oakland, California.
Products like cannabis-infused chocolate bars and berry-flavored vape cartridges sit on the shelves, waiting for pick-up and shipping to dispensaries across the state. This movement of goods – facilitated by the Nabis’s own e-commerce platform developed for its wholesale business-to-business model – is being fueled by a surge in cannabis use during the COVID-19 pandemic.
Vince Ning, co-founder and CEO of Nabis said BEFORE the pandemic the company shipped about half of what it ships now.
"As soon as the pandemic hit and stay at home orders went into effect, one of the major things that happened for the cannabis industry was the fact that the industry was deemed essential." Now industry tech entrepreneurs, like Ning, and investors are gearing up for even greater growth as legalization spreads and the economy reopens.
So far, 36 states and the District of Columbia have approved medical use of marijuana, according to the National Conference of State Legislatures. Of them,15 states and D.C. have approved recreational use of pot. As they operate in a legal gray zone at the federal level, cannabis entrepreneurs say they have to move quickly and build their brands before full U.S. legalization levels the playing field.
Currently, traditional e-commerce platforms, such as Shopify or delivery services, such as Uber, don't allow cannabis to be sold or delivered via their platforms in the U.S. since marijuana is still federally illegal.
Because of that, tech companies that operate in the states where it is legal, have sprouted up.
The tech companies include those providing delivery services that allow dispensaries to ship their orders or e-commerce platforms that enable them to sell online
The potential for growth in the cannabis industry has attracted investors -- including celebrities -- who have poured a lot of money into the industry.
In one of the biggest venture capital deals in the sector to date, Oregon-based e-commerce platform Dutchie announced Tuesday it raised $200 million in a funding round that values the company at $1.7 billion.
The company's online marketplace connects cannabis dispensaries with consumers, who can order home delivery. Its investors include former Starbucks CEO Howard Schultz and NBA star Kevin Durant.