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SCOOP: Pacific Stone is latest to leave Herbl

By Alex Halperin
Jun 2, 2022
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This is what an edibles truck used to look like, (NYPL collection)

Correction: This story previously said Big Pete’s Treats works with PetalFast, but the relationship has ended. Big Pete’s is distributed by Herbl.

Leading California flower brand Pacific Stone is ending its relationship with distributor Herbl and switching to Kiva Sales and Service. It’s the latest in a string of high profile departures from Herbl, once California’s dominant distributor.

The move is further evidence that even some of the state’s most prominent brands are dissatisfied with their sales performance amid very challenging market conditions.

  • Pacific Stone and Herbl declined to comment. Kiva didn’t respond to requests for comment.

Pacific Stone’s move comes as Herbl is embroiled in litigation against leading competitor, Nabis and  concentrates maker Raw Garden, following the brand’s switch to Nabis early this year.

  • Then in February, vaporizer company Pax launched its Live Rosin pods on Nabis, despite having a pre-existing relationship with Herbl.
  • A spokesperson for Pax said Nabis’ business model (see below) was a better fit for the product and that Pax continues to work with Herbl and other distributors.

California requires cannabis and brands to have a distributor. But brands have to decide how or whether to divide the logistics and sales aspects of getting product from factories to retailer shelves and apps.

  • Like traditional alcohol distributors, Herbl handles both the logistics and sales. It takes ownership of the merchandise and has a stake in its brands’ performance.
  • Nabis, which also handles more than 10% of legal product in California is a third party logistics provider (3PL). It stores and moves product, and has an online marketplace for its brand partners, who do their own sales and marketing.
  • Herbl says its sales teams’ ongoing relationships with retailers help it to build brands. Nabis counters that when distributors handle multiple accounts each brand’s message inevitably gets diluted.
  • Both companies typically only work with clients on an exclusive basis. (For a more in-depth discussion, see here.)
  • Kiva Sales and Service, the eponymous edibles company’s distribution arm, operates more like Herbl with both logistics and sales services.

About 14 months ago, SoCal-based brand accelerator Petalfast, which offers sales and marketing and other services, took its portfolio — which now includes Space Coyote, and Pilgrim Soul among others — from Herbl to Nabis.

Petalfast CEO Jason Vegotsky said it was scary to leave a big organization with talented people but ended up being the “best decision that we’ve ever made.” Petalfast and Herbl’s competing sales teams had caused “friction,” he said. Nabis, which doesn’t do brand sales, was a better complement.

  • Since leaving Herbl, Vegotsky said Petalfast has incubated Yada Yada, now the 11th ranked flower brand in California. That would have been tricky with Herbl, he said, since it also distributed competing central coast greenhouse brands Pacific Stone and Glass House.
  • By partnering with Nabis, “You’re saying that I can do [sales] better than Herbl,” Vegotsky said.
  • Vegotsky told WeedWeek that King’s Garden, a big indoor grower in the Coachella Valley (Riverside Co.) , which partnered with Herbl last September, is also switching from Herbl to Kiva. (King’s Garden didn’t respond to requests for comment. Herbl declined to comment.)

Herbl has also gained some clients. This spring it announced exclusive agreements with Dosist as well as Black-owned brands 40 Tons and Ball Family Farms. “They believe in us. They’re supporting us,” 40 Tons COO Anthony Alegrete said.

“One of the tough things about being a distributor is that you are always the one blamed for sales short falls,” an outside executive who’s familiar with both Herbl and Nabis told WeedWeek. “When times are tough, brands feel like they need to do something to turn things around. Only time will tell whether switching actually leads to increased sales.”

“With the challenging year ahead,” the executive continued, “I expect we’ll see more switching impacting all distributors, not just Herbl, and consolidation up and down the supply chain.”