The Dads of Washington Cannabis
By Catey Nelson
December 6th, 2020
What began as a chance meeting from a dad-and-daughters adventure group has grown into a life-long friendship, along with a multi-million dollar business idea.
Inside one of the Evergreen Market dispensaries. Photo provided by The Evergreen Market
From left to right, Eric Gaston, Jeff Anderson, and Arne Nelson. The three Co-Founders and Owners of The Evergreen Market. Photo provided by The Evergreen Market
When I was in third grade, my dad signed himself and me up for an organization in the YMCA called the Y-Princess Guides. It was a group of dads and daughters that went on adventures together for the mission of building stronger relationships with each other. When I reminisce on those adventures, the memories I made there are some I cherish most. But those trips weren’t just positive to me for nostalgia’s sake… they also kindled a friendship between my dad, Arne Nelson, and two other dads in the group, Eric Gaston and Jeff Anderson.
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A few years later, Arne created a Wednesday night trail-running crew, consisting of Eric, friends, and other dads around the neighborhood. They would all carpool to the surrounding mountains of Issaquah and Snoqualmie Pass to put down miles on the trail. I remember doing my homework in the kitchen on Wednesday nights and my dad coming home covered in mud and sweat, walking with a limp because of how sore his legs were. One night I watched him walk through the door past midnight, as his crew ran over 18 miles that night — in the snow, in the dark, in the middle of January. I’ve always had a lot of respect for my dad but trying to imagine how brutal those runs must’ve been was difficult to comprehend sometimes.
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All that time spent on the trail gave the guys a lot of time to talk with one another. Although most of the dialogue consisted of jokes and light-hearted digs, it also provided the space for business chatter. One evening, Eric brought up the cannabis retail lottery as he and my dad were jogging through Tiger Mountain. Over the course of many Wednesday nights, he persisted that my dad should consider looking into it. After a month or two, my dad, who worked in software business start-ups for most of his adult life, finally relented.
“I built cost models and revenue models around the business. The more I looked into it, the more apparent it became that the return on capital in the cannabis retail side of the business, was extraordinary,”
- Arne Nelson
Arne knew from his past experience that the return on capital in the software industry was usually between three to four years. But he was shocked to discover that in the cannabis retail business, the return on capital was only four to six months.
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"The genesis for entering into the space was really as much a product of not being happy in where I was in my life at that point as it was with the industry being attractive," said Eric.
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Not only did Eric recruit Arne, but he also brought in Jeff Anderson, a successful e-commerce entrepreneur and a friend of Arne and Eric’s since they met in Y-Princess Guides. The combination of skills and experience that the three dads brought to the table — Eric being an established attorney, Arne being a C-level executive for multiple software companies, and Jeff being a successful entrepreneur — made for a powerful alpha trio in the business world.
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Their plan going into the cannabis business was to first obtain commercial real-estate licenses to build the dispensaries. This is where Eric’s first mention of the lottery came in. “We looked at the lottery and the vast majority of license applicants were chasing the big cities, like Seattle and Bellevue, and there were hundreds upon hundreds of applications for very few spots,” Arne explained. “We felt that the secondary market, smaller markets like Auburn and Renton, would be better opportunities because there were fewer applicants."
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the lottery
There was a catch to qualify for an official application, however. In order to qualify, one had to obtain a piece of commercial real estate. And that was extremely difficult because very few landlords were willing to lease to cannabis companies. Arne went on to explain how, in order to overcome the complexity of the lottery, they had to get extremely detailed in their reading of the rules.
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“The rules were vague,” he states. “It was extremely difficult to get answers about the rules themselves from the governing group who wrote them, the Liquor and Cannabis Board (LCB). We literally drove down to Olympia and sat in the lobby of the LCB and waited until someone talked to us. After we were able to have a conversation with them, we gained a much deeper understanding of the rules. The most critical piece of understanding was that you didn’t have to have a fully developed, committed lease for a property… you just had to have a letter of intent that had all the right language in it.”
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With that knowledge, Arne, Jeff, and Eric were able to utilize that information to secure and submit the maximum number of applications to the lottery for each city, significantly increasing their likelihood of winning. Utilizing their insight allowed them to put in a lot more applications than their competitors. “Low and behold, we ended up winning five licenses in two different lotteries,” Arne explained.
Accumulating those licenses allowed the trio to finally move their business from paper to reality. They built their first store in North Renton, Washington in 2015, and voted to name it The Evergreen Market. "We were fortunate enough in the beginning that we were relatively early to the market," said Jeff Anderson, one of the co-founders of the company. "When we first opened, we had lines out the door. People were just throwing money at us for our products. We were really lucky in that regard."
Now, with five locations around western Washington and newly obtained licenses to expand to California, The Evergreen Market is quickly becoming one of the top-grossing cannabis retailers in the state.
Eric Gaston, one of the three founders, works with lawmakers to expand the tight legal policies that currently surround the cannabis retail industry."I’m meeting with lawmakers pretty much every day, and even though the conversations are pretty candid, I’m very intentional with how I speak about cannabis," Eric said.
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"I want to make sure that the lawmakers I talk to know that I’m a former prosecutor and attorney, that I’m a father of three kids, that I have a wife and family, and I want them to know that I consume cannabis. My goal is to continue driving a different narrative for cannabis in Washington, and we think The Evergreen Market is a leading example of that narrative."
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The company is planning an expansion in California as well as expanding to up to ten stores in Washington. “Cannabis in the US is really still in its infancy,” Arne stated. “The alcohol market has been around for centuries and it’s still growing, so we plan on continuing to grow our brand, to grow our operation, to grow our number of retail stores for as long as possible. As long as it continues to be really fun.”
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According to Eric, their mission as a cannabis retail company is"To bring the Evergreen Market, our ethos, and our industry as far and wide as we can."
5 years later
Now in 2020, with over five years of experience working in the cannabis industry under their belt, Arne illustrates what it is that makes working in this business so worthwhile.
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“There are three major aspects really," said Arne. "One is working with my two other founders, Eric and Jeff. Working with them has been a journey I feel so blessed to have experienced; it’s as if I got two new brothers out of it. The second is working with my employees. Working with millennials and a younger generation has been a fantastic experience — I feel that it’s made me a better dad as well. And last, but not least, is getting to know the customers. Greeting and talking to customers on the sales floor has really opened my eyes to the reasons why people use cannabis. What I’ve come to learn is that it’s not so much about getting high. It’s so much more
Arne Nelson. Photo provided by Catey Nelson
about lifestyle. A lot of people use marijuana for pain abatement, for headache resolution, for insomnia, for anxiety, and most importantly, for relaxation. I hear these stories over and over from different people every day.”
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“I’m a 58-year-old former software executive, and this business has been the most fascinating, the most fun, the most emotionally challenging work I’ve done. I have had to broaden myself and open myself up to be a different human being in this business. It has forced me to re-invent a large part of who I am. And I’m a better man for it.”
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Working in an industry alongside a community of cannabis enthusiasts as your employee base makes for a drastically different work environment compared to most, especially to that of a courtroom or a tech-business. "The cannabis industry has been a breath of fresh air for me," said Eric. "The people that are there are there because they're genuinely passionate and happy to be there. It's been a real blessing."
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The cannabis industry is an ever-changing market, and as the upward trend of legalizing recreational cannabis reaches more states throughout America, there is no telling how far this industry will go. Arne, Eric, and Jeff were diligent in making their company successful during the early stages when it was at its most complex. And their hard work paid off. They’re experiencing what it’s like to found and own a cannabis retail business at the very beginning of one of the fastest-growing industries in the country.
