 Sometime last month it was brought to our attention by our lead investor or to be lead investor that they could no longer invest in NavVis and it was due to legal technicality because they had invested in a cannabis testing lab before and there's a small fine print in most states regulations. It's kind of an idea of separation of church and state where if you are a financial interest holder or an owner in a testing lab you cannot actually own an operating company and I think that regulation was probably written in with good intentions but it was certainly disappointing to hear this at the 11th hour we had essentially told everyone that this was happening and to go back and tell them actually our lead who's been vouching for this round is pulling out please remain in the round. This is Startup and Storefront, the podcast where we inspire entrepreneurship through truth. Today's guest is June Lee, co-founder of the cannabis wholesale distribution company NavVis. To anyone even remotely paying attention it's clear that the public perception on weed is rapidly changing. To date weed is legal for recreational use in 18 states plus DC while another 13 states have decriminalized its use. The winds of change are blowing and they're headed towards legalization on a national level. The only question is how long it will be until we get there. For many though the race towards market domination began long ago. June saw a budding industry with loads of untapped potential back in 2017 when he founded NavVis. In just four short years he's taken the company from a single van making once a week shipping runs to serving over 100 cannabis brands and almost 100% of California's licensed weed retailers. So listen in as we cover everything from why he had to initially hide his career choice from his parents, why big shipping companies like FedEx haven't gotten into cannabis distribution and why there's no brand loyalty in the weed market. Now back to the episode. Alright welcome to the podcast on today's show we're talking to June, founder of NavVis. Thanks for joining. Tell everyone a little bit about what your company does. NavVis is one of the largest cannabis distributors based in California. We have presence in Oakland and LA and we essentially transport products from brands to dispensaries throughout the state. And what made you want to go down the road of getting into the cannabis industry? You know I was mostly accidental so I was a software engineer before I got into the cannabis industry and was running an enterprise SaaS company and by happen chance I had a friend who owned a pre-roll company. This was right before at the cusp of legalization who needed help moving his products around. Vince and I thought it was one of the cooler things we'd been offered to or asked to do. So we decided to drive up to Humboldt and pick up some products and drive it down to San Diego, Oakland, a couple different places. So literally like transporting the goods? Yeah, yeah it became kind of a hobby. We thought it was really cool, made us feel really cool and was completely on the side and I think both Vince and I knew that there was something big happening in the cannabis industry and that something was going to happen and I think naturally being software engineers we're always looking for kind of systems and distributed ways of doing things and transportation basically seemed like an area where the problem wasn't fully solved. And then what was your first step? So once you guys are doing it yourself you're seeing the problem. What was the first thing that you guys decided? Did you quit your jobs right away and just start working out in full time? So I was running my startup full time. Vince was consulting at the time and Vince my co-founder and at first it was just a drive once a week and then it became twice a week, three times a week. It got to a point where it wasn't sustainable so we hired a couple of our friends to drive for us and then customers kept coming back because we had this very simple value proposition that if you called us we'd show up on time and deliver your products on time and not steal anything from your bag or your cash. So it was D to C or was it to a business? Always B to B. So at the time we would move products from farms to either processors, manufacturers or a company like Ease for example. Okay and are you using trucks at the time or is it just like your car basically? Whatever can fit in the trunk. Back in 2017 it was just my SUV. Okay and then at some point when did you guys go all right we're too busy we're doing these runs all the time. Did you guys think about raising capital right from the jump or was that something real like let's get some more traction? We wanted to get more traction so we bootstrapped the company with $6,000 each from the co-founder so we had $12,000. We purchased with that a dinky old Mercedes Metris which we later used for larger runs because the bags stopped fitting in the back of our trunk and it felt to us very much too early on to kind of really pivot our career. I think some context is you know I come from a very Christian conservative Korean family Vince is Chinese-American and I think the idea of us kind of quitting our prestigious full-time tech jobs were very difficult at the time so we only decided to make that full-time transition after we received our full state license and I think at that time we had something like five to ten regular clients that were shipping products with us. How did you tell your parents? I didn't tell my parents for a long time they actually found out through a series of articles that came out about us. I think the first major public... Good articles I imagine. Yeah generally positive you know these two young kids are doing something cool in cannabis was usually a theme I think in the early days in 2018. Did that help at all? Did that help you? Yeah I mean I very much feared the idea of going to my parents and explaining it from ground up because I knew that they wouldn't fully listen to me or you know they would think that I'm doing something reckless but when they saw it on Forbes it certainly spoke a little bit of credibility and you know made them think maybe there's something June is doing here. When did you guys apply to Y Combinator? We applied to Y Combinator a bit late in terms of the stage of the company. Yeah. We were part of the 2019 Winter Batch which means we applied sometime in mid 2018. Okay and you got in. Did it change your life? Did you love it? What was your experience there? Yeah it was great. I don't know if I would necessarily call it life-changing but it certainly provided a framework of building a company with intent so I think right up until that point we were just kind of doing whatever that worked trying to experiment change our services in a way where you know with the objective of more customers coming to us and asking us things to do but I think Y Combinator really allowed us to look at kind of zoom out look at the company from a company level and understand what are metrics that we didn't even track back then things like ARR, our annual run rate, burn, headcount, things like that. I think it gave us a lot more structure. Do you have like any or do you have a memory of like you're the best piece of advice somebody may have given you while you were there or maybe even your favorite like advisor partner. But the one that's most memorable is it came from Michael Seibel I think. That's my guy. He's the best. Yeah Michael Seibel CEO of YC, he's also our group partner. Oh you got super lucky. Yeah that's awesome. And I might be miscoding him and it's something to the effect of investors don't actually care about what you do. You have to be able to explain it in a way that's easy to digest and to think that you can kind of distill this really really complex thing that you do full time in a two-minute in a selfless arrogance. And so you have to really build a narrative in the story that can be digestible that's the most important thing. I've seen him destroy startups. Oh yeah. Yeah. He's like this is you and then he'll draw a line going right down like plummeting and he's like this is you tomorrow. And I mean silence. Yeah. At that point I'm surprised they made it into the Y Combo that air program. Yeah. I mean a lot of people you know they pivot when they're inside of it and they realize I would say like a third of the ideas kind of drop off. Yeah. And another one I'd say is he talked a lot about kind of making analogy to flight and pilots and apparently there are certain orientation of the plane that if you're in doesn't matter if you're a thousand feet elevation or 10,000 feet elevation you're going to crash. So regardless of how much money you have in the bank account or you know what kind of hype you're generating in the investor space if the company is structured in a way where it's spending too much money or if it's set up incorrectly regardless of how high you are it's very very easy and almost deterministic that you would fall. Yeah. This is something a lot of to have a lot of friends and we talk about this that have started companies. There's a point in time in a company's journey where you it's usually not a happy time but you kind of understand the mistakes you made but the course has already been set. Yeah. And now you have to live with these consequences and it's awful usually because it's too late. Like it's way too late in the game to kind of move but it sounds like for you guys that things are moving the right way direction correctly moving the right way. This is also why I say directionally correct a lot. Yeah. Yeah. I guess to kind of illustrate some of that now we're 170 person company two offices. We have a built out engineering team very capable supply chain operations team as well. We supply about a hundred distinct brands to essentially every single dispensary in the state of California and about 10% of all legal cannabis consumed in California comes off the back of our trucks. So I think that's a huge percentage. Thank you. Yeah. Is there a big player or are you the biggest player? There are a couple of big players. We're definitely one of the biggest. So the distribution market in cannabis especially in California is still very fragmented and there are three major distributors that control about 30% of the market and more 35% of the market and we're one of them. When you guys first started raising was there any pushback or did you have to kind of to Michael's point did you have to really educate them on what it was that they were investing in on the industry where things were going? Yeah. I think thankfully our messaging was easier than perhaps some other companies in our batch. So if you're developing something like a very obscure developers tool or back in the API it requires definitely a much more difficult and creative explanation. But our pitch was that we ship weed from brands to dispensaries and I thought that was a pretty simple enough thing to sell and I think especially in 2019 when we were going through YC there was a lot of enthusiasm about the new space the changing regulations and a rapid desigmatization of the substance itself. I think even five years ago cannabis is mostly seen as a recreational drug and something that teens abuse to get higher, et cetera. And I think I felt that firsthand grown up in Virginia but just in the last five years public opinion has shifted quite drastically. Yeah. The devil's lettuce. Yeah. You look at the number of states who have now legalized it and the trend is certainly moving towards national level legalization. Exactly. How many brands would you guys say you work with today? A little over a hundred. And what do you do for them? I know you guys do a lot for them but you get to just kind of disclose. So there are a number of services that we provide but essentially one is distribution and fulfillment. What that means is we'll pick up their product from anywhere in California. We'll warehouse it out of our facility and essentially upon their direction we'll pick and pack and ship out the order to the dispensary. So it's very similar to kind of like a traditional dropshipping model but on the wholesale side. Now we've added a lot of ancillary services on top of that to create value. One is a product called Navis Marketplace which is retailer facing. So all of our suppliers and brands can list their products for sale on a marketplace and retailers can place orders. There are some other ancillary marketplaces out there like Leaflink but I think the big differentiation that we have is that we're kind of like eBay is to Amazon Prime. Since we control the dispatch itself we can deliver the products within 36 hours which has been a big differentiator. The other products there's one called Navis Capital. We provide essentially inventory financing for our suppliers. It's very difficult to gain access capital in cannabis because one banks don't give you traditional loans like a normal business and even equity capital is very limited and you have to be able to tell a very compelling story to get that expensive equity capital. So we kind of serve as this bridge as a financial institution given the fact that we're a little bit more established we have access to capital and it's a good way to stimulate the sale. That's amazing. So if I'm a brand in this space would I exclusively work with you? Like I'm just thinking about I had a product company at one time and so it was like I have inventory here. I have some inventory on Amazon, right? And then so we had someone on the podcast created like basically a way to just connect all your inventory so it's all in one place. Is this the same problem in your space or no? A little bit different because it's regulated and there are certain requirements for how you need to handle the products. So in California there's Like a higher barrier to entry on that side of it. So you can't just ship cannabis with any provider. You can't FedEx your weed. So essentially there needs to be Why? What does FedEx not do that? Is it the legality of it? One is the legality of it and then there's kind of the justification for why it's set up that way. And there's a number of reasons. One is California really wanted to implement this thing called C2Sale. Essentially they wanted to be able to trace from the moment the cannabis plant was harvested to when it ended up in consumers hands. And when you have such strict supply chain procedures you need specialized groups that will kind of comply and disclose all those things and et cetera. And FedEx clearly isn't particularly specialized to do that. The second reason is there's concerns around cross-contamination. So people like weed now but they're still not really sure if it should be shipped next to baby products for example. That's fascinating. Yeah, yeah. I mean I think generally I think this will probably remain the case. The same way I think alcohol distribution for example is extremely specialized and not just regulated substances. If you're transporting hazardous materials like flammable gases there are certain procedures that you follow and licenses that you need. I was gonna ask if this is the same where alcohol, tobacco are also not allowed to be transported next to say baby products or if it's just pot. Yeah. Exactly, they specifically don't want to mix alcohol and cannabis because they're kind of concerned about the so-called cross-fatedness. I mean there's a big opportunity that obviously you're taking advantage of that. That's so fascinating. One of the things that I don't smoke pot but I do invest in pot stocks and the barrier for that and the problem with that has always been that at least when I started investing there was no brand recognition or brand loyalty in terms of consumers going like, let's say you go into a grocery store and you are a Coke drinker, you will always get Coke and there just doesn't exist something like that in the pot world. And so I was wondering since you deal directly with brands all the time, have you seen this start to shift is this a continuing problem in the industry and if so how do they overcome it? So brand loyalty is something I think is built over time and the industry is just simply too young for people to kind of have a Coke Pepsi parallel. I would say that strong brands in cannabis are certainly developing but compared to any other CPG it still remains extremely fragmented and sometimes we feel that we have found the brand for our category. So for example, for cannabis gummies there's plus gummies, cona, caminos, et cetera and they seem to be pretty stable as in they were in their place and then suddenly last year this organ brand called Wilde comes in and they took over the market, essentially took huge chunks of the gummy market from existing players and I think that really jolted people in thinking that no we haven't got to that stage on to that stage of customer loyalty that we thought we had. Is there anything that surprised you about the space that you would have never thought about or guessed? Yeah, I'm a consumer casually but I wouldn't by no means characterize myself as a power user. I think I was definitely surprised by the complexity of the products, the sheer diversity. So people talk about flour, pre-rolls, vape, concentrates, beverages like some of these larger categories but even within concentrates there are so many different variants and within it different types of extraction methods that people care actually very deeply about. Same with alcohol, I think you see these enthusiast wine drinkers or single malt whiskey seekers and there are very close parallels to that in cannabis but I'd say it's even more deep than alcohol is. For you personally, like are you still engineering are you still coding or have you moved on? I have, I still participate in our engineering meetings and I bought a roadmap but I have in myself coded in about two years. Nice, do you miss it or are you happy? You basically play like chief product officer kind of? Well, I mean my role is officially as president but I generally my primary duty is actually overseeing the business unit of our company. So our revenue, business development, new clients, structuring deals as well as running our operations which is consisting of 150 people, 50 trucks to warehouses so it's a lot of moving pieces and that in weird ways is very similar to what I learned as a software engineer managing distributed systems. Kind of it's like the art of doing a lot of things simultaneously at the same time. The levers, levers everywhere. And then the product side currently rolls up to my co-founder but we're very interchangeable and we have this kind of nice brain melt since we've known each other for such a long time we can kind of step into each other's shoes. Will you guys ever go like autonomous vehicle, like autonomous trucks? Is that sort of something that really makes the business pencil? Yeah, I mean we envision a lot of cool new things in the future. I think probably before autonomous vehicles we want to start experimenting with electrical vehicles, electric fans. And one of the things that we're doing there is currently electric fans are very useful for any deliveries within the range of up to 400 miles but after that it becomes very difficult to do. The problem with California is that it's quite large and there are places that are certainly more than 400 miles apart. So as our long-term strategy we're actually building our headquarters fulfillment center right now in Woodlakes which is kind of a 30 minutes south of Fresno. And that allows us to kind of sit right in between the five where we can access both LA and Oakland within 400 miles. So we're hopeful that's kind of these long-term infrastructural investments that we're making would enable us to do that. Autonomous vehicles I think that probably will come with how the auto industry evolves. Sure, when it comes to your warehouse are you using like any state-of-the-art technologies? Is it mostly machines? Is it mostly human beings? Right now it's mostly human beings. And I would say that our warehouse technology itself probably lacks behind state-of-the-art consumer goods by something like 10 years. And the reason for that is because we're simply just not at a scale where investing in a million dollar robot makes sense. We do have best practices, industry best practices like location-based inventory tracking. So across our 100 brands we're managing something like 15,000 distinct SKUs. And we intake and outtake about 70,000 units of products every single day out of each hub. So it's important that we for example have an organization system, warehouse management system that keeps track of where everything is. We also do things like wave packing which is just kind of an issue-standard way of packing a lot of different things are. And we have tools like forklifts, gravity conveyor belts and so forth, but it's certainly not looking like Amazon full phones. When you think about the systems that are already in place do you look at them from a software engineering perspective and go, oh, this is like really clunky, this is really bad, or are there pretty good sophisticated companies in that space that are making beautiful products to make sort of the management much easier? Oh yeah, I mean there are so many people making just extremely impressive product both on the software side and the hardware side to enable logistics and warehousing in general. And I think with the rise of e-commerce the investment in that endeavor has only increased dramatically. I do think that at Navis at least we have a tendency to try to build things ourselves because we are engineers and the use case for cannabis can be a little specific enough that the standard out of the box software may not address the concerns. I forget the company, do you remember the company that Amazon acquired? It was for their warehouses. Basically it was the thing that would- Picks up the drafts. It was these two guys who worked at this company that started it and they were both engineers and they would basically just track the movements of humans. And so they just put dots where humans were and then they just watched the dots move around all day. And then they were like, I think we can probably engineer this in a better way. And so they started, I think they quit their jobs at some point but they started going down the road of creating these robots. They sold it for several hundred million dollars too. About 900 million, yeah, and to Amazon. I'll be honest, it sounds a bit dystopian to think of it like that, to think of it like human movements. It was all about efficiency, right? They were just trying to make it like, and at first the thought was not so much to replace the human. It was more of like, how do we make these movements much more efficient? Because Patty is in that corner and for some reason she needs to grab gloves over here. That makes no sense. And so as they're going down this road, they're like, we think we can make these robots. But it was like these guys were, I think in their late 40s when they started the company, really cool story. And they're like, yeah, now we're like, yeah, now they're set. Now you go to an Amazon fulfillment center and you just see these shelves flying across each other at extreme speeds. They have algorithms to prevent them from colliding from each other. It's pretty amazing. And so you just closed the big round. Congratulations. Max was just here telling us about it. Do you want to share your story on how this almost didn't happen? Raising money in cannabis is definitely challenging and it's a different beast because essentially what we have is a technology company that happens to own some infrastructure and the license to actually transport the goods. And a lot of people ask like, why don't you just decide to be a software company? It would be so much more investable, easier. The reason why we did both was because it was what we felt was best for the customer experience. When you order something you expect to get it in a certain amount of time. And in a immature industry, it's really important that you control that experience. So we made that kind of tough call to be both plant touching and technology early on. But we kind of are now running into this problem where kind of Silicon Valley tech investors can't invest into our company because we're still plant touching and they may have LPA restrictions. I say they can't invest in vices or federally legal goods or whatever services in cannabis. And then we also have kind of a class more traditional supply chain investors who fail to see that we really are a technology company. They try to assess us only on the trucking aspect. And Vince McGo founder leads a lot of these fundraising conversations but it's really that conveying that message correctly and finding that intersection of people who's first comfortable investing in cannabis but also see our potential of being something potentially really scalable. We started raising the round early this year and frankly it wasn't a terrible time to raise. There's certainly a lot of enthusiasm around cannabis with the Democratic Party taking super majority. There's a lot of kind of promise and hype around like will cannabis get furthered and from a regulatory perspective in the next couple of years. And that led to kind of a quick rise in the public markets. You mentioned that you invested in public cannabis stocks although that enthusiasm has somewhat qualified because it seems like the administration has other priorities for now. But regardless, we were able to kind of find the interest pretty quickly. By February we had determined a lead who essentially started the due diligence process by March and April. We had a term sheet. We had all the legal docs kind of final. And the last steps were just kind of doing the paperwork and corralling the rest of the investors in. But sometime last month it came to our attention or it was brought to our attention by our lead investor or to be lead investor that they could no longer invest in cannabis. And it was due to legal technicality because they had invested in a cannabis testing lab before. And there's a small fine print in most states regulations. It's kind of an idea of separation of church and state where if you are a financial interest holder or an owner in a testing lab you cannot actually own an operating company. And I think that regulation was probably written in with good intentions. But it was certainly disappointing to hear this at the 11th hour. We had essentially told everyone that this was happening to go back and tell them actually our lead who's been vouching for this round is pulling out. Please remain in the round. And I think we really kind of pulled off this gymnastics. Thankfully one of our earlier investors rose up to the occasion and decided to take the lead instead. And the outcome at the end was favorable. So definitely grateful. That's amazing. So basically the growth rate for you is also tied to facilities, right? Somewhat, yeah. And so now you're in hyper growth entering this real estate world that operates at a snail space. And somehow you're just trying to get as much land and warehouse space as possible. And so what do your needs look like in the next year? So right now you have this 20,000 square foot place that you're doing. In Los Angeles we have a 26,000 square feet in Oakland. So all in all we have about 46,000. If the math is correct and our projections are correct and we continue to grow at the rate that we do by the end of next year we will need something like 150 to 200,000 square feet of warehouse space to handle the volume. And that would be to support about 20 to 25% of all cannabis in California. Now that's a big number. There's 40 million people in California and California is loved to smoke weed. And I see it as kind of a pretty large responsibility to enable the supply chain. So we're really racing on our end to procure the real estate, the licensure and the headcount. And it's not just the space. For going into a new city it's about talking to the government about the municipal taxes, letting them understand that we're bringing this new type of business to their city that we're gonna be hiring hundreds of people and actually hiring those people, training them and then getting it up and running really quickly. I definitely think that we've really trained our muscle in turning up a facility really, really quickly. So for example our Oakland warehouse which is 26,000 square feet opened in December of last year. And we started working on our LA facility after that opening. And we were operational in LA, moved in with licensure and approvals by April and that was certainly a gymnastics. In your experience, what's the reception been like when you approach a new town or city with like, hey, we're gonna bring this several thousand foot warehouse space in here. Are they generally receptive because of the taxes, the employment and everything or does it mirror the state of California's attitude towards weed overall? I think it depends widely. Generally it does mirror California's views in that there are more municipalities that are favorable to cannabis than not. But there are certainly also localities where they are absolutely and vehemently against any cannabis operation. So I think it's definitely a political matter. Assuming that they're okay with cannabis, I think generally we've been met with enthusiasm meeting with the city mostly because it means that we're bringing a lot of business and employment to the city and kind of so-called putting the city on a map in terms of their infrastructural significance in the California supply chain. So this problem is interesting because what's happening is there's a lot of smaller counties, smaller cities like the City of Ballard or Commerce as an example, and they're all like racing to change their legislation because there are actually are rules in place today that say they cannot be basically affiliated with cannabis of any kind. And even though I would call it like on the fringe of it to some extent, like you're not producing it, it's still unfortunately part of their bylaws. And so you have all of these cities changing it. What's interesting though, the opportunity, the way I think about it is there are some cities that control their own power grid like Pasadena and a bunch of others. And so what ends up happening is a company like yours can come in and really dictate terms because all of a sudden they're gonna get money, not only from the taxes, not only from the, let's say the jobs, but also just from the fact of you're using utilities at a way higher rate. And that's exciting. So you can almost get like the keys to the kingdom. And then if you latch on to like a political candidate, you know, it's payday because anybody that's savvy in the political game is go like, let's say a small town mayor is gonna say, oh, this is it. This is my ticket. I'm gonna ride the wave. And so, you know, they don't always think like that, but we play this game a lot in real estate development. And I think to my surprise, the regulatory bodies in California have been very supportive and favorable so far to emergence of companies like Nabis in cannabis. I think when Prop 64 was drafted and passed, they only had kind of a faint idea of how the supply chain was gonna actually play out. And for there to be an aggregating party like us, where, you know, we do funnel 10% of the market and hopefully more in the next couple of years through our system when we have built a system that's essentially auditable by the tax authorities to make sure that, you know, all the taxes are being paid. And, you know, it kind of creates a central point of responsibility that the state feels very comfortable managing. So unlike, I'd say, other industries that sometimes are inhabited by incumbents, it's been relatively easy to kind of get in front of the regulators and speak to them. But it comes to hiring. So Amazon was obviously at New York Times recently. All their practices, not very favorable. Big headline risk. When it comes to you guys, how do you view hiring for the warehouse space in general? Because it would seem like that's really not your world at all, right? Software engineers. Yeah, although I'd say, you know, now I've been doing this longer than, you know, I was a software engineer. So we're definitely kind of exercising that muscle. Hiring is really important to us because, I mean, ultimately the organization is nothing more than the sum of the people that are part of it. And we have this dual challenge of attracting really tier one talent. An engineering team that would be a good engineering team at Facebook or a finance team that would be a good finance team on Wall Street and bringing them over to cannabis is kind of one big lift that we do. And that's by just really convincing them and echoing this message that what we're trying to do here is truly something unique. It hasn't been done before. And this is a great way for people to really apply their talents in a new space. On the warehousing trucking side of things, it's certainly a new area, but I think that there's actually a huge overlap of people who are passionate about cannabis and people who work in the warehouse fulfillment side of things. So we find that nice intersection. And they kind of naturally select because we review the candidates that we receive applications from. And it usually comes with the fact that they're open to cannabis. Cause, you know, if you're fundamentally against cannabis and the growth of it, then why would you come work out of cannabis? That makes sense. Yeah. And so it hasn't been that difficult. Training. Yeah, I think it's been doable. I mean, the thing that we struggle with now is, you know, when the companies, for example, grown about 50% from January of this year in terms of the total volume and revenue that we do. And we've grown about 180% since this time last year. And when you're a small company, when you have a team of 50 people, growing 10% means hiring five more people. But when, you know, at our current state, when we almost have 200 people, growing 10% means hiring 20 people. So really kind of building out that pipeline and, you know, being present at career events and, you know, approaching universities. And there's, there's some of the more scalable things that we're excited to do, especially with this round. That's awesome. What other things are you guys going to do with this round, do you think? I think about it, like, are you guys ever worried about, I don't know if Amazon would enter the space, but like a behemoth entering the space in a really meaningful way. Like that's got to be something that... It's something that really excites me because I just know that it would be far cheaper for them to buy someone like us than to build it themselves. Is that what your hope is, or do you... Yeah, that's kind of a good feeling. Well, I see that as a potential way this could play out. I think Vince and I both definitely build this company, not for an exit, but really focused on the fundamental value that we're creating. And I genuinely and personally believe that this is an opportunity and a problem set big enough that I could work on it for the next 10, 20 years. You know, if you think about how long it took after prohibition for alcohol to be as mainstream and widely distributed as it is today, you know, it took over 70 years. And I think with the advent of internet and these technologies, it might get accelerated, but I don't think it's going to be kind of played out in the next couple of years. For me, this is such a blessing because I've always wanted to work on infrastructure projects. And I felt that as a 20-something year old, there's always this huge barrier of entry, mostly around capital to play these sorts of, you know, infrastructure games. And I'm sure you feel that way in real estate, it's like, you know, you kind of have to work your way up to a certain point. And Navas kind of gave me this fast pass to running and orchestrating a trucking company at a young age. And I think I definitely want to make something of this opportunity. I love it. When it comes to like, so in my head, when I think about your distribution, everyone's wearing neighbor shirts. Is it like, what is it like if I walk into one of your centers? Yeah, so generally people will be wearing our shirts, our polos, but we don't enforce the strict dress code. I think compared to other warehouses that you might be in, we're more casual. And I would also say that our workforce is generally younger than an average workforce in other supply chain companies, because, you know, I think they're more young people that support and like cannabis than others. And people, young people coming out of college are really seeing cannabis as a career. They know that this is here right now and it's only going to grow for the next 10 years. So they're going to do something, maybe pick a box, you know, deliver a box at some point, but eventually go into really specialized fields like cannabis compliance law or, you know, tracking trace system and, you know, getting proficient with metric and these systems are something that people really want to do. So at some point, you also have a tremendous amount of data, right? You see these products moving. You see the market moving in certain directions. Is there any interesting data that you see taking off more than others, like our edibles moving at a pace that's like quickly outpacing? There's some interesting trends. I don't think as kind of broad as like edibles or things like that, but for example, we know that beverages are growing, is a rapidly growing segment of the market. And it's like CBD infused beverages or like THC? So we deal with THC infused only, cannabis derived. So there's, you know, hemp CBD business that we're actually legally bar from participating in because we hold a cannabis license. That's really fascinating. I want to touch on that a little bit later. Yeah, yeah, yeah. You know, it didn't start out as a big segment to begin with because essentially manufactured cannabis, I mean, when you want to make a beverage, you need a bottom line, you need a factory, you need a way to infuse liquid at scale. So it simply wasn't possible before legalization. And with the rise of kind of a sparkling water seltzers like Laquan, you know, White Claw and all these kind of segments, I think people are anticipating and pouring a lot of money into making the next cannabis seltzer. That would be the White Claw of cannabis. It's still a small segment. It's less than 1% of consumption in California, but it is something that we're definitely watching out for. For example, Nab is exclusively represents Papsu Ribbon and their seltzer line in cannabis. Paps has a seltzer line? A lot of the beer companies invested. That makes sense. I just didn't know Papsu Ribbon. Because it was the biggest market in terms of expansion versus beer. Right. And they're scared. They think that young people, young health conscious people aren't drinking enough beer and that they wanna pivot to zero calorie options in other forms of intoxication. That's certainly true. Yeah. Is it branded different than like the blue ribbon? They use the same logo. It's called Papsu Ribbon Cannabis Seltzer. So it's a very like blue collar marketing effort. That's a way I can see brand loyalty start to develop. Exactly. When recognizable brands come into the space, you've already gotten an affiliation with them. Exactly. Yeah. And then there are other categories that have been popping. Like in 2019, early 2020, we saw a rapid rise in the category called live resin. So essentially when vape pens first started coming out, they were all this lit chemically distilled product, almost like isolates of THC. And people started kind of developing some adversity towards something as artificial. So the whole concept of live resin is taking a fresh frozen plant and squeezing it, sometimes with solvent, sometimes without it. But the idea is to kind of get closer to the flavor of the plant itself. And now that's evolved into kind of live rosin or what we call solventless extracts where they only use ice and water and pressure to extract the cannabinoids from the flower. So that way you're really taking in the raw form and then translating into a vape product. There's like research papers that came out on like cannabinoids in like the 90s. And to think about what you're doing today, that's basically my lifetime is so insane. Yeah, if you go back 30 years. And I realize I sound like an old person saying, but it's like we had beam on the podcast is they make a CBD product. And so for them, like that's why I was like going through the whole, okay, there's no barriers to entry in this space, everything is built on brand or at least they're approaching it to build a brand first. They're going after the mainstream athletes. They basically want to be like the Coca-Cola in the space. And they're doing that via investors with big names essentially. So like the celebrity route and they're doing a good job. But we were talking about these studies and they were like not that long ago, 20 years ago. There's when the studies are coming out and now all of a sudden we've accepted that cannabinoids can like help in a meaningful way. And going back to what you said about not being able to hold a license in CBD or hemp because you have a cannabis license. Do you see that changing in the future? Or is that something that there's actually a reason for outside of just what we just discussed where it's like old philosophies that have come and aged poorly and we're really like smear campaigns from back in the early days. So I'm certainly not an expert in the hemp side of things but what I know is that there's been a lot of ambiguities legally as to how each state and the US should regulate hemp and whether hemp is should be even considered a cannabinoid or a cannabis product. And I think in 2019, what was it the farm after? US basically the US federal government said that hemp is fine, you can put hemp in products and each state and municipality can regulate how hemp is distributed actually. And in that kind of like time of ambiguity, I think a lot of people saw that as a business opportunity started up their hemp operation but California specifically has been really conflicted in how to regulate hemp. Right now I believe that hemp products are not allowed to be sold in traditional retail and they're actually banned from licensed cannabis dispensaries. As a licensed cannabis distributor we're not allowed to touch any hemp products either. So for now we're just kind of following the rules there. And I think hemp also is a different beast in a different supply chain in that interstate commerce of hemp is now essentially legalized. So you can bring in hemp from China, you can bring hemp from Mexico and essentially turn it into a product here. So it lends itself to a very, very different supply chain than a closed loop system like cannabis. Are you saying that there's not much interest on your part in getting into that? Not for now and there's a couple of reasons for this. And one is because I think that just substance wise cannabis derived products are more interesting to me personally than hemp. I think hemp has a very kind of singular effect or CBD as the main cannabinoid. And I think there's some marketing that's challenging actually the minimum active dose of CBD is almost 50 milligram and you won't find 50 milligrams in most hemp products. So in order to actually feel the effect of CBD you would have to chug five bottles of hemp drink which I don't think is a very reasonable and palatable experience. Second thing is that I think we well said. Yeah. Second thing is that we built out this software ERP and the supply chain very specialized for cannabis. And I think I don't normally talk about this with investors too much because I can sound a little, it could sound lofty but I do think that eventually NABIS could branch out outside of cannabis but even beyond hemp there are a lot of regulated substances that require this disclosures and submissions. Things I mentioned, hazardous gases, alcohol, tobacco, medical supplies. I think those are areas that we could potentially get into. Would you ever close the loop with just having your own stores? As in verticalize and actually own the stores on the supply chain? Yeah. That's actually contrary to what most people are trying to do. They're trying to verticalize and be a vertical company and to improve their margins. But I think ultimately we believe that a more exciting future for the cannabis industry is where products and brands compete. There's product churn and innovation and customers get to decide what products they want. And I think when you walk into a liquor store in Arizona, you could find great goose on their premium vodka cabinet and you can walk into a liquor store in Vermont and find the same thing. And you ask yourself, like, why is that the case? And it's not because customers like great goose. It's because someone decided that that was the premium vodka of America. And I think that is a very limiting view of how the market should evolve. And I think that when you verticalize there are a lot of temptations and just forces that make you want to remain still in favor of innovation. Well, listen, where can people find you? Whether they're looking for a job, whether they're obviously just closed around. So you definitely need to hire immediately. No, for sure. So our website is nabis.com, n-a-b-i-s.com. So you can read all about us and slash careers, all of our job postings, our mission, our value as a company is listed there. You can also reach out to me directly. My email is June, J-U-N, at nabis.com. Look, you've definitely, this has probably been the quietest we've ever been on a podcast. Yeah. Only because I know nothing about your space and I just find it so fascinating, but it's for sure very abundantly clear that it's the future. This was an information session for us. Yeah, yeah, yeah. So thank you for talking most of the time. No, of course. Was that enough content? Was there anything else that I could elaborate on? No, no, that was, that was wonderful. Unless you would touch on anything, uh-huh. Every industry, I feel like, has something where, for you guys now that, like you said, the democratic leadership feels a very different way than the Trump leadership did. I'm sure it has kind of eased a little bit more, like when Jeff Sessions was the AG. Yeah, yeah. Where people like, so we tried to build a Jeff, jet fuel refinery. This is like 20, not 20s. Jet fuel refiner. Jet fuel refiner, green jet fuel specifically. And so what we wanted to do is we wanted to build a plant in Everett. So Everett's like right by Boston, and then you can just put it on a train and then put it in a tugboat, and then boom, you're just tugging it to Logan, which is like the most efficient way of doing it. Cause right now, so Logan, any fuel that arrives at Logan Airport, 90% of it's from war-torn countries. Oh, I see. And so we just wanted to basically make it local. In doing that, our pro forma was Mitt Romney versus Obama at the time. Barack Obama went very public around basically saying, yes, biofuels are the future. Mitt Romney said nothing. And this completely changed the landscape of our raising capital. And it just destroyed it. It was like in one setting that economics worked and the other setting, it really didn't. When it came to the election for you guys, was there any similarity where investors were like, let's see how this plays out? Cannabis stocks certainly performed very well after the Democratic supermajority. I think people are certainly a little disappointed at the speed at which cannabis legalizations being considered or prioritized. Essentially, Kamala Harris and Joe Biden said they have some more important issues such as COVID vaccination. And you know, some may argue justifiably so that take precedent over legalization cannabis. I think that, I mean, ultimately, we're not in a big hurry per se because one thing we know for a fact is that product market fit of cannabis does not need to be proven. People like smoking weed, they spend money on weed and they will continue to do so as long as kind of, you know, this generation lives. That's an interesting way of putting it. I mean, you're right, you're right. But it's like a fascinating, there's not many industries with that in excess. Right, so it's not like, you know, in the example of jet fuel or green jet fuel, it might be a case where the actual cost of production or efficiency might be slightly higher than traditional methods, but for moral purposes, it's something politically we should decide. Cannabis has a very opposite effect where like it is proven that people want this. So it's more the politics is controlling the speed at which it is being released as opposed to enabling something that wouldn't normally happen. Welcome to real estate development. Yeah, really, god damn. I'm always waiting on politicians even right now and it's infuriating because you have like real dollars, there's holding costs, right? And we're just waiting for someone to just go to the office. But we also want to make sure it doesn't happen too fast. That's true. I mean, there's something to, yeah. We want it to happen in our terms. And I mean, I kind of mentioned in my, in the company video, but we do see that the only viable path of, you know, scalable cost effective distribution is a national distributor that facilitates the movement across state borders. And that's just the inevitable future because it's an economies of scale business. What will you go after California? What's that? What state will you focus on next? Partly actually to answer your previous question around our raise, about half of it is going to be dedicated towards out of state expansion. We're looking at a couple of different states. New York, Jersey is particularly interesting to us right now. We also have to make sure that the municipality or the state that we're going into is favorable towards a model like ourselves. You know, do they allow consignment distribution? Do they allow, you know, what distributors to hold inventory for long periods of time? Like there are all these kind of factors that make our service more valuable or less in a certain state. But I think most likely New York, we'd love to kind of enter that market when it opens up a screen field opportunity. There's a big warehouse space in Sunnyside, New York that Brooks Brothers used to work out of. Oh. It's massive. Yeah. Massive. There was like seamstresses the whole bit. Oh well. Full of fabric. Yeah. No longer the case. Unfortunately you can't move cannabis across state borders. Even if we were to open up in New York, we could bring the software, the brand IPs, and the brands could be there, but the cannabis will have to have grown in New York. And same thing for New Jersey too. So like you couldn't even know that they're bordering states, you couldn't just transport it across. Yes. Because interstate commerce makes it a federal matter. Yeah, it's inferior. Yeah, you're in real estate development. That's what you mean. I mean, it's massive inefficiency. Like Oregon, for example, had an overproduction issue where essentially a pound of weed was like just as valuable as pound of corn at some point because there was an excess of products and there are all these other states where there's a shortage and they can't do anything. Do investors know this? Like when you speak to them, they're aware of this basically your growth rate, not to some extent, but at least the national expansion is literally tied to the legislation. They know that? Yeah, yeah. I think generally, well, I mean, some of them do. Some of them I have to explain, but I think it's something that definitely comes as a surprise when I say like everything you buy and the dispensary in Massachusetts has been grown in Massachusetts. Right. Because that's how they built it. You don't see that in any other supply chain. Yeah, Massachusetts was early and they basically built it in that way on purpose. And it's not energy efficient to grow cannabis in Massachusetts. It's just cold there. And you have to build these massive indoor grows or greenhouses that has a lot of energy consumption. There's some studies that show that indoor cannabis consumes about three orders of magnitude more energy than sungrown cannabis. So like, why are we really doing it? Sure, there's demand for design or weed and people really like that indoor field because it's expensive. But I think eventually that will kind of phase out as cultivation techniques and outdoor definitely kind of matures and evolves. What are the coolest products that you've seen that someone uses cannabis with like that I would never think of? That you would never think of. Or haven't. Like I'm not, I would barely put myself in the recreational user. Yeah. So there's a really interesting company called Vertosa and they're not a brand. They manufacture these fast acting cannabis extracts that have been coated with some sort of polymer so that it binds to your body faster than standard cannabinoids do. And they go into a lot of beverages like Papster Ribbon can and so forth because when people drink something they want to feel the effect immediately. So there are a lot of these like tweaks being done like ways to chemically coat the cannabinoids to change the way that they're absorbed. I think that's really cool. And something people don't really appreciate or realize when they drink a cannabis beverage. And this is new technology, right? It didn't exist two years ago and it's being used. There's also a lot of studies in isolating different cannabinoids. So CBN around sleep has been explored more now but there's still a huge, I think, area of research that remains. Yeah. Well, thank you very much for coming on and educating us about everything. It makes my blood. Yeah, really it's such a foreign industry to me but I am fascinated by it because it's still in its infancy, very much so. This is like the thing I told you on the phone was like my buddy was a Wall Street trader in Chicago or not Wall Street but the Chicago trader and he is now in the cannabis industry. And when I spoke to him about it, he's an older guy but he's basically like it's the best space if you're smart. He's like there's been so much lack of sophistication in the space and now all of a sudden with your company, tech company, people with backgrounds that could help this industry accelerate are now coming in from all walks of life. So the finance, kind of like you mentioned, like if your team rivals Facebook's engineering team, if your finance team rivals some of the best teams on Wall Street, these are the things that this space is starting to see and it's a really exciting time. No, for sure. To be part of that. I might add like a recruiting sound bit. Do it, yeah. Yeah, I think if you're smart and you're curious about cannabis and you want to learn more, it's really no other opportunity like it. Essentially it's a market that's being formed out of nothing, California legal cannabis market went from $0 in revenue in 2017 to $4 billion in revenue in the single year and you don't really see that in any other industry and I think it's easy to make kind of comparisons to markets like crypto, but I think it's fundamentally different in that you're converting an existing behavior into the white market. So. What are some company perks? Company perks, you get statewide discount in any dispensary in California. What's the discount, how much is that? Usually around 30%, sometimes up to 50%. Wow, massive. Yeah, so if you're a big smoker, that certainly helps. We also kind of employ partnerships. You can sign up for Flower Co, which is Costco of cannabis where they deliver next day cannabis to you for extremely cheap. Other perks, you get to see all the new innovative products before they hit the market. So some people in our warehouses are even more knowledgeable and enthusiastic about these things and they just love being able to be in the front line and seeing what the market will see in a couple of months ahead of time. And do you guys get to test them too? Like, do you get to try them a little bit? Sometimes. Yeah, I can imagine sometimes they would send you like, hey, these are. Right, right, right. So our brand partners are generous with samples. Now people get me cannabis. I have no idea what to do with them because I have enough cannabis in my drawer to smoke the rest of my life. Yeah, so it's. I have a warehouse full. Yeah, yeah. So I think that's cool. And it's an intense working environment because the industry is changing so much. We have to respond to regulations and competitors. You know, I definitely kind of warn future employees. I'd like if you're looking for something chill and you know, you're riding on the co-tail of a cannabis industry, this is not the job. Well, thanks, June. Yeah, appreciate it. Thanks very much.