When the Zell family started their cannabis retail business in Alaska’s Matanuska Valley, they initially thought maybe a dozen or so people would come through the Wasilla shop’s doors each day.
Located about 45 miles northeast of Anchorage, the small city has a population of only about 10,000 and it’s not known as a tourist destination, so they didn’t know what to expect. But when they opened Bad Gramm3r for business in May 2017, about 250 people showed up the first day to buy legal cannabis. And now, nearly three years later, with the shop seeing its traffic grow to more than 500 customers per day, the Zells have opened a second location — Higher by Bad Gramm3r — in neighboring Palmer.
“We have just exploded up here,” says Teri Zell, who runs the business with her husband, Peter, and son, Casey (the “3” in Bad Gramm3r represents the three family members). “The entire industry is exploding. Every time I turn around, a manufacturer is coming up with something new and exciting.”
While Bad Gramm3r’s first shop was hugely successful, the company’s newest store goes above and beyond in terms of aesthetics.
“There’s nothing around Wasilla or Anchorage that looks anything like that,” Casey says.
Inside and out, Higher is a wild rendition of Alaskana: The eye-catching exterior shimmers in shades of purple, blue, teal and green, depending on the light and angle from which it’s viewed; a 60-foot wilderness mural, painted by local artist James Harding, wraps around the front of the building; atop the building, 3-foot-tall letters — HIGHER — illuminate the dispensary like a beacon for those seeking cannabis; the nature theme continues inside, with depictions of wolves, bears, birds of prey and fish; an indoor waterfall is the finishing touch and a focal point of the sales floor (“I got it into my head that I wanted a giant waterfall inside the building,” Teri says with a laugh).
“It’s one of the coolest buildings I’ve ever seen, at least where we live,” Casey says.
Cost of Electricity
The cost of electricity — and thereby the cost of producing marijuana indoors — varies dramatically across the United States. Although the actual rate changes depending on the month, Hawaii and Alaska continuously have the most expensive electricity in the country, followed by states in New England (California notably has the sixth-most expensive electricity).
The following chart shows the average electricity rates in the cheapest and most expensive states (in cents per kilowatt-hour), according to the U.S. Energy Information Administration.
Most expensive electricity
1. Hawaii (27.88)
2. Alaska (20.58)
3. Connecticut (18.02)
4. Rhode Island (17.79)
5. Massachusetts (17.61)
1. Oklahoma (7.68)
2. Idaho (7.69)
3. Louisiana (7.89)
4. Arkansas (7.99)
5. Washington (8.10)
The Zells say the biggest challenges in Alaska have been driving out the black market and driving down prices.
Alaska’s electricity is among the most expensive in the nation, leading to an exorbitant cost of production for state-licensed growers. In 2017, the wholesale price of cannabis was about $6,000 per pound. That translated to retail prices of about $75 for an eighth at Bad Gramm3r — roughly double the price of marijuana from the black market.
“That was ridiculous,” Teri says.
Bad Gramm3r lowered its prices with the goal of selling more volume. The Zells knew their margins would be smaller, at least in the short term, but Bad Gramm3r would be able to push competitors and suppliers to lower their prices and draw more customers into the legal market.
Wholesale rates now range from $2,600 to $4,000 a pound, with eighths selling for $35 to $60 at retail, which has helped spark the business’s tremendous growth.
“I’ve seen every walk of life in our stores: doctors, lawyers, people barely making it by,” Casey says.
“We have bankers, nurses, blue-collar, white-collar, no collar,” Teri adds. “From the get-go, this has been a family-run business and we treat everybody that comes in here like family.”
Having more space than most cannabis retailers in the state has also allowed the company to work with numerous vendors and offer a wide range of products. On Day 1 in 2017, Bad Gramm3r had a single-page menu with only nine items. Now, it carries products from more than 80 vendors and a 10-page menu presents consumers with just about everything they could want.
“We’re pretty much bursting at the seams here,” Casey says.
For the entire Zell family, life in the cannabis industry has been a welcome change of scenery.
Teri worked for the state of Alaska for 30 years, retiring as the budget manager for Alaska State Parks just as the state’s commercial cannabis industry was getting up and running. She initially “didn’t want to deal with anything” when Peter and Casey began retrofitting the run-down building (and former brothel) that would become Bad Gramm3r. But after she spent a few months traveling and decompressing, Casey noticed his mom looked like she was getting bored. Plus, her financial background was a perfect fit for the retail operation. Since she started working at the store, that boredom disappeared.
“We have a lot of young people that keep me laughing all day long,” Teri says, adding that as a longtime cannabis consumer, it’s been a thrill to see marijuana become legal and to take part in the growing industry.
“It’s made her a lot happier,” Casey says. “It’s keeping her young, you could say.”
Meanwhile, Peter and Casey had worked together installing satellite dishes for the last 20 years.
“He was sick of working on a roof,” Casey says of his dad. Frankly, Casey had grown tired of it, too. He says he made good money, but it meant going outside every morning at 7 a.m., working on a roof in the freezing cold, often surrounded by feet of snow.
And now that he works as the manager of a marijuana retail store, he no longer has to hide the fact that he uses cannabis.
“Now I get to celebrate it,” he says, “which is awesome. This has been one of the best experiences of my life. Granted, not every day is perfect — it’s still retail — but it’s just fun to see your community.”
As the shop’s success has grown, Teri has made a point of seeking out local nonprofits that need help. She gives monthly donations to various causes within the local community, ranging from the animal shelter to school lunches to projects undertaken by local law enforcement.
“I think it’s really important,” she says. “Our community is supporting us greatly and I think it’s important to give back.”
And giving back has helped turn the stigma of legal marijuana — “just another person selling drugs” — into something positive for the community.
“Granted, we are here to get you high … but we’re doing it in a professional manner,” Casey jokes.