Ryan Kunkel thinks big.
In early 2011, he launched his Have a Heart-branded medical dispensaries with the goal of rapid expansion and the best customer service in the business. Word spread and his outlets developed a loyal following among the expanding population of medical cannabis patients in the Seattle area. Kunkel, who is known far and wide for his ebullient personality and ever-present smile, quickly became a leader in the industry.
As luck would have it, while the Have a Heart medical empire was expanding, residents of Washington state voted to legalize adult-use recreational marijuana in 2012. It was a pivotal moment for Kunkel, one that would catapult him and his growing business into a new and much more complicated industry.
“We ran the five medical dispensaries through the cutoff in 2015, and they all had the same Have a Heart brand as our current retail stores,” Kunkel says.
“The conversion from medical to recreational was as if a nuclear bomb was dropped on the industry and we had to restart from scratch by participating in a lottery for the business we spent years building.”
After the legislative mushroom cloud cleared and the industry began to settle into a licensed, rec-only market, Kunkel is more than just participating, he is thriving.
“We are confident in what we do and it was exciting to get an opportunity to expand into a new market,” he says.
For Kunkel, having a flagship location in downtown Seattle’s nightclub and restaurant district was a goal from day one. However, finding the right space proved a challenge. With the same focus you might expect from an organization like Costco or Whole Foods, his real estate team spent countless hours looking for the perfect spot. After scouring real estate in the Pike Place Market, South Lake Union and Lower Capitol Hill neighborhoods, they finally found an ideal storefront in the center of Belltown’s vibrant restaurant and nightclub scene.
“It didn’t hurt that the heart of Belltown is also walking distance to high-rise condos occupied by thousands of well-paid Amazon workers in the South Lake Union area,” Kunkel says. “We definitely lucked out.”
When it came to the look of the flagship downtown store, Kunkel knew he wanted to be different. His instincts told him that a generic, well-lit box store might work in some areas, but the funky-cool Belltown neighborhood required something unique.
“We always thought that recreational cannabis stores take themselves far too seriously, and we figured that we wanted to go in a fun, new direction,” Kunkel says.
Enter Dillon Works, a plastic fabrication company founded by former Disney Imagineer Mike Dillon.
Known for creating artsy sculptures and characters for clients as diverse as Sony, the NBA, M&M’s World and the National Aquarium in Baltimore, Dillon Works set about creating a whimsical interior for the flagship Have a Heart location. With its floating light sculptures and Dr. Seuss-inspired paintings of a Seattle skyline, the interior is a visual work of art that immediately conveys a sense of fun and creates a relaxing, casual environment. Kunkel likes the way the store stands out in an industry where many retailers have a bland “sameness” to their look. The selection of products in the store is deep, with dozens of vendors.
There are currently six retail stores operating under the Have a Heart brand in Washington, all wrapped under a management agreement for services, including staffing, branding, internal controls and standard operating procedures.
The Belltown location’s unique aesthetic is obviously working. The store has firmly established itself as one of the top five retail locations in the state with sales exceeding $1 million a month.
Hawaii, California, Oregon
After establishing the Have a Heart brand in Seattle, Kunkel sees the natural progression is to take his winning formula to other locations and states.
Oregon is next on the docket. One Have a Heart location is currently under construction in Salem with the goal opening this winter, followed by another shop in Portland’s downtown Pearl District in early 2018.
When it comes to Hawaii, which does not currently have recreational marijuana, the Have a Heart team has established a strong partnership with long-time residents of Kauai, and was scheduled to open the first of three dispensaries on the Garden Isle by year’s end. Kunkel likes the fact that the medical outlets will give him time to get firmly established and ready for the day Hawaii legalizes adult-use cannabis statewide.
After Hawaii, it’s on to Southern California with an eventual opening in the Los Angeles area, though Kunkel says the main focus there is to help get cannabis-friendly candidates elected to local governments to help expand the industry into smaller suburban cities that have either banned or placed moratoriums on cannabis shops.
“We’ve invested a ton of money in Southern California and have an experienced team on the ground,” Kunkel says. “We’ve also started a PAC (political action committee) and will be working on removing some of the bans in the more desirable parts of LA County.”
Kunkel also says the Have a Heart crew is applying for licenses in every location that is currently accepting applications, including states as far away as Arkansas. The company has 480 applications out in California alone. The theory is that no matter the cost of an application — and it can be substantial — it is cheaper than buying into an already established market.
The Have a Heart name and branding will continue to be used in all locations, and Kunkel is adamant that the 200-plus employees of his stores possess a culture and loyalty that is unrivaled in the retail marijuana space.
Building a customer base
Kunkel is quick to point out that unlike Colorado, where prices are high and stores primarily sell marijuana they grow themselves, Seattle retailers are forced to compete for the best available products from a large vendor community which, in his words “results in far better quality of bud, lower prices and a much bigger selection.”
While some business people in the marijuana retail space try to explain customer loyalty in ways that seem complicated and formulaic, Kunkel is a bit more direct: “We’re all about the best product at the best price,” he says. “My buyers are top-notch and spend many hours carefully evaluating a vendor for quality, reliability and presentation. When a potential vendor meets all three of those requirements, we will take their line on.”
Kunkel also credits the company’s early days as a medical dispensary and the focus on patient needs for helping build customer loyalty that spread the good word about the shop. It helped ease what could have been a bumpy transition from the medical to adult-use markets.
“We focused on the patients that made our company what it was and in turn, their reciprocal loyalty helped assure a new transition,” he says.
This simple philosophy has resulted in a high rate of repeat business and a retail chain that is rapidly gaining recognition as a leader in a very competitive industry.