Supply chain logistics is a headache and a half across any industry, but the difficulty level goes way up within the world of cannabis. Because of federal laws, FedEx, UPS and USPS are not an option. Distributors need a variety of licenses and must operate within specific regulations. For example, cannabis brands must either become their own first-party distributor, with W2 employees and company-owned cars, distribution centers, etc., or use a licensed third-party distributor.
Wayv, the B2B cannabis logistics platform founded by serial entrepreneur Keith McCarty, is looking to solve this problem with the launch of its Dynamic Distribution platform. Of course, Wayv has been operational for upwards of a year, having received $5 million in seed led by Craft Ventures’ David Sacks (former co-worker to McCarty from the Yammer days) back in October 2018.
Today, however, marks the public launch of Dynamic Distribution, which not only connects brands, retailers and distributors to streamline cannabis supply chain logistics, but allows brands to list themselves as third-party distributors for other brands. Plus, the platform automatically checks for compliance with all parties on the platform across federal, state and local laws.
While companies like Anvyl and Flexport are looking to support other, less regulated industries in their supply chain logistics evolution, the cannabis industry has been mostly left in the paper age. Wayv aims to streamline that by providing a single interface for brands, retailers and distributors to move cannabis products within the state of California.
For the past year, Wayv’s platform has helped power logistics among several cannabis brands. Today, Wayv hosts over 70 brands — High Style Brewing Company and GoldDrop to name a few — as well as more than 85% of licensed retailers.
With Dynamic Distribution, brands that handle their own distribution can hop on the Wayv platform and get listed as a third-party distributor for other brands, opening up new revenue streams. Plus, this will allow brands across the state to access a much bigger pool of distribution options, allowing for small upstart brands to get selling without scaling up their own distribution operation.
Wayv generates revenue on a per-transaction basis, charging a 15% fee to brands.
McCarty says that one of the obstacles of an on-demand logistics business is supply constraint. He likened it to consumer on-demand services, like Uber and Lyft, whose growth is dependent on the number of drivers they can get on the platform.
“In the cannabis environment, there are so many compliance and licensing requirements, along with packaging and product testing requirements — which are all amazing and necessary — that we live in this environment that is very fragmented,” said McCarty. “It’s the fastest growing industry in the world, and there’s no Coca-Cola or Starbucks. There are no big chains. Just small companies individually. This means a lot more friction and a lot more need for something like Wayv to help solve the problem.”
McCarty has plenty of experience in the cannabis sector. Prior to Wayv, McCarty founded Eaze, the on-demand cannabis delivery platform for consumers. Before Eaze, McCarty was an early employee at Yammer, which was sold to Microsoft in June 2012 for $1.2 billion.
Side note: Keith McCarty will be joining us to discuss cannabis startups at Disrupt SF, which runs October 2 to October 4. You can grab tickets right here.
Editor’s Note: An earlier version of this article stated that Wayv is working with Caliva, Kurvana and SPWG. Those deals are still being ironed out.