Over the past four years, Michale Beraki has grown Kush 21 into a chain of four cannabis retail stores, with its flagship location breaking into the top 10 of Washington retailers in revenue.
Now, Beraki, an African immigrant, serial entrepreneur and one of the industry’s few minority business owners, is not only looking to expand his retail brand into new states, he’s hoping his success story will inspire others to join the legal cannabis industry.
“The message I want to send to the minority communities is that if you want to be part of this industry it’s still wide open here and across the country,” Beraki says. “Now we have four stores, we’re working on number five and we’re expanding to becoming multi-state. I think anybody can be inspired by that story.”
Beraki is from Eritrea, a small country on the Horn of Africa, bordered by Ethiopia and the Red Sea. Eritrea has a long history of war, population displacement and economic and social stress. Beraki lived there until 2002, when he was working as a translator for a captain in the U.S. Army who offered to sponsor him and bring him to the states.
At the age of 16, he left his family and country behind to come to the U.S. Over the next 10 years, the young entrepreneur started several businesses, including a transportation company, a health care business, two liquor stores and a business that helped his fellow Eritreans send money from Seattle to Eritrea. In 2012, when Washington residents voted to legalize cannabis, Beraki jumped at the opportunity. When his initial applications failed to yield any licenses, he purchased a license from a struggling retailer and opened his first Kush 21 store in SeaTac on October 1, 2016.
Same State, Different Markets
Although all four Kush 21 stores are in Washington, they operate in completely different markets. Kush 21 has two locations in Eastern Washington, along the Idaho border, and another two on the west side of the state, along Puget Sound. Because of the vastly different locations and demographics, each shop uses a different marketing strategy and carries a widely different selection of products.
The flagship store in SeaTac is roughly 4 miles away from SeaTac Airport, the largest international airport in the Pacific Northwest. Its primary demographic is the thousands of visitors arriving at the airport daily who want to take advantage of visiting a state with adult-use cannabis, even if they’ll only be in town for a layover. Due to the high rate of out-of-state customers, Beraki says he feels like the SeaTac store has to represent the whole of Washington’s cannabis market, which means a wider variety of product and a good selection of top-shelf items that may be considered a little more pricey for regular shoppers.
“We try with SEO to make sure that when people get off a plane and search for cannabis that we would be No. 1,” Beraki says. “We see a lot of new faces from the U.S. and abroad.”
Southwest of the SeaTac store, the Vashon Island Kush 21 has an almost opposite demographic. Vashon Island has a population of roughly 10,000 people and isn’t accessible by car, meaning the vast majority of its customers are local residents; any potential visitors would need to reach the island by either boat or plane. The Vashon store, which operates in a former courthouse, caters to a 55-and-older demographic and carries a lot more health-focused products.
On the opposite side of the state, in Pullman, the majority of Kush 21’s shoppers are from Washington State University. Beraki says college students want value, so the top-shelf items regularly sold at his SeaTac store would have a much slower turnover rate. Beraki says the Kush 21 Pullman store has a much higher demand for budget ounces.
“Our ticket average is very small in Pullman,” Beraki says. “I think it’s about $18 to $19. In SeaTac I think it’s about $30, so it’s opposite customers.”
Kush 21’s newest store, in Spokane, also carries more low-ticket items than its western locations. Beraki says Spokane consumers are primarily locals looking for a value, which could be due to the city having more than 30 licensed retail stores. But he is in the middle of relocating the store to a different part of the city, expanding the selection and streamlining the layout, where it might be a different story altogether.
Every Kush 21 store shares a similar theme of simplicity. Beraki designed the stores to be open and easy to navigate, with every item displayed with clear signage. Marketing manager Jacob Easter says the stores are as close to being like “vending machines” as rules allow. Easter adds that the store’s design isn’t intended to cycle customers in and out, though it is a side effect of making the shopping experience easier.
“The whole point is to make sure the customer has an easy experience,” Easter says. “If it’s hard to buy weed, that’s really bad for business.”
Marketing to a Diverse Demographic
In order for Kush 21 to target such a wide range of consumer demographics, the company uses an equally diverse set of marketing tools. Beraki says that includes the usual coalition of social media channels such as Twitter, Facebook and Instagram, along with marketing via text and email through the company’s loyalty program.
“One of the most effective marketing strategies we’ve employed is our loyalty program,” Beraki says.
“But one of our most popular things,” Easter adds, “is that every Thursday there are lines out the door for our vendor days.”
Like many store owners, Beraki wanted to have a set time each week in which vendors could come in, set up a table and meet customers. But he didn’t want consumers to pay full price to try out a new product, so he instituted his own take on vendor days: a three-hour event where customers could meet the vendor and try their product at “cost plus tax.”
“We try to sell it as low as possible,” Beraki says. “If they like it, they can come back and buy it at full price.”
Beraki says the chain’s vendor days have been lauded by customers and participating vendors. According to Easter, the vendor days have become the chain’s top grossing in-store event; a great deal can outperform nearly any other kind of promotion, he says.
“We’ve had lots of celebrities, a lot of people that we think would vibe with the weed industry,” he adds. “I would say those are effective, to some degree, but having better deals and being upfront and nice to your customers is still the best way to go.”
With successful cannabis operations across Washington, Beraki says he isn’t planning on selling Kush 21 like he has with many of his prior ventures. He is already starting on the next retail location in Washington and has submitted several applications in Illinois, as well as planning to launch a national brand of CBD products.
“I heard a lot of great things about the United States from watching movies, that as long as you work hard, abide by the rules and do the right thing you can achieve success,” Beraki says. “I felt like if anyone was going to stop me it was going to be myself.”