Nabis CEO on the future of interstate cannabis commerce post-rescheduling

This is part of a regular series of MJBizDaily interviews with major THC industry players. To be considered for an interview, contact editorial@mjbizdaily.com.

Federal medical cannabis rescheduling may not deliver the interstate commerce many operators expect – at least not right away.

According to Vince Ning, co-founder and CEO of San Francisco-based cannabis distributor Nabis, the question of whether reclassifying medical cannabis as a Schedule 3 drug opens state borders to legal cannabis products remains largely unsettled.

Any early movement will likely be confined to a narrow group of medically licensed companies registered with the U.S. Drug Enforcement Administration (DEA).

Rescheduling doesn’t automatically clear the way for cannabis products – medical or adult-use – to flow freely between states.

The reality, Ning said, is that opening state borders to transporting cannabis products will be complicated.

What is the path to interstate commerce?

The market will split into three distinct lanes: intoxicating hemp, medical marijuana and state-licensed adult-use cannabis programs, Ning said. Each operates under different rules, and rescheduling does not blend them into one national market.

The clearest path runs through the medical lane.

“Federally sanctioned DEA licensees should be able to transact with other DEA-licensed parties,” Ning told MJBizDaily.

But he expects litigation.

Companies that read the rules one way and get rejected will challenge those decisions in court, and clear answers may take time to arrive, Ning said, stressing that he’s not an attorney.

“I think a lot of it is still left up to interpretation,” he said.

Who will oversee the medical marijuana industry?

A central complication is which agency will oversee any federal program, Ning said.

The DEA is an enforcement agency, not a regulator of commercial markets like the Alcohol and Tobacco Tax and Trade Bureau (TTB).

Resource constraints are another concern.

The DEA operates on a budget of a few billion dollars – a fraction of what other federal agencies receive. Funding shortfalls could shape how quickly and thoroughly guidance arrives, Ning said.

What must change before cannabis moves across state lines?

Ning laid out a list of practical steps operators face before interstate shipping becomes workable. The application deadline for registering licenses with the DEA is at the end of June, with further guidance expected later.

Ning said companies should prepare:

• Licensing and know your business (KYB) – operators must provide legal entity verification and have a state-regulated license to apply
• Manifests and shipping documentation that satisfy both federal and state requirements
• Routing changes and updated software to connect distribution hubs across state lines
• Track-and-trace interoperability, including compliance with Metrc and other state systems

But some nuances could complicate matters.

For example, Nabis has a stronghold on the West Coast, where it operates in California and Nevada, as well as the East Coast in New Jersey and New York.

In California, it holds licenses covering both medical and adult use. But in Nevada, a state that issues separate licenses for medical and recreational, the company did not apply for a medical license.

As a result, Nabis will not register its Nevada licenses with the DEA.

Those distinctions will create confusion as operators sort out what qualifies under which framework, he said.

Who will benefit from interstate commerce?

Ning said that interstate commerce would favor operators and brands designed to scale. Companies like Nabis that planned for a national footprint stand to adapt fastest.

“Our routes for vehicles only pertain to intrastate business right now,” Ning said. “If we can go from California to Nevada and back – and we’ve preplanned for this eventuality – we should be able to connect our largest warehouse in Woodlake, California, with hubs in Vegas and Reno.”

Those built around state-specific systems, or that constructed redundant operations in every state, may have to tear down and rebuild around a universal platform, Ning said.

Nabis is positioned for that shift. The company spent its first six years refining operations in California and has expanded carefully into Nevada, New York and New Jersey, building infrastructure it believes can connect across broader regions.

“We’ve been careful about where we expand to – distribution is a capital- and labor-intensive business, and we have to be thoughtful of where we spend,” Ning said.

“We didn’t want to expand to places with redundant warehouses. We’ve built infrastructure that would be able to connect to broader regions across the nation.”

For brands, he expects a move toward single-contract manufacturers capable of shipping interstate, which he believes would lower costs and squeeze the illicit market over time.

“We believe we’re in a good position,” he said. “We have all the plumbing. We’re kind of like a utility where we guarantee everything from compliance that targets public safety and public health to infrastructure that takes years and years to build.”

What are Ning’s words of wisdom?

Ning’s biggest caution centers on expectations. The largest misconception he hears is how much rescheduling will change the industry.

But Ning knows there’s much more that must be resolved.

He pointed to unanswered questions around how agencies such as the Food and Drug Administration (FDA) and TTB would govern the space, how hemp fits in and banking access.

Medical operators, he said, may gain banking access more easily, but the industry still needs to lobby hard.

His advice for now? Apply for DEA registration, choose the right partners and avoid planning around the assumption that adult-use will be rescheduled.

“It’s a great start,” Ning said. “But I don’t think the war is won. This is just a battle.”

Margaret Jackson can be reached at margaret.jackson@mjbizdaily.com.