The Bake Shop founder and CEO Pablo Gonzalez.
“The Bake Shop started as a dream,” says founder and CEO Pablo Gonzalez of his now well-established, three-store Washington retail chain.
With stores in three counties in the eastern part of the Evergreen State and a growing market share, it’s hard to believe that Gonzalez didn’t have everything planned, or even study business at college. Instead, he studied the businesses around him and dedicated himself to building a long-term success in a tricky and complicated industry, instead of making a quick buck.
In the beginning, Gonzalez was just a student at Central Washington University. During his senior year, he and some friends were talking about the then brand-new recreational cannabis industry preparing to launch.
“I read an article that most people that were victims of the drug war weren’t going to be benefiting economically after the legalization of (cannabis) here in Washington,” he says. “So it kind of motivated me to look into it a little bit more.”
As part of his political science and communications degree, Gonzalez did a presentation on Initiative 502, the ballot initiative that created the state’s recreational industry, and learned enough about the initiative and the law that when a few years later it came time to apply for the lottery to get a license, he tossed his hat in the ring.
He didn’t win either of the two licenses in Benton County. However, one of the winning applicants ahead of him failed to get their paperwork to the Liquor and Cannabis Board, so Gonzalez was next in line and he jumped.
“They gave me an opportunity and I was able to start building,” he says. “I learned everything on the go.”
Building
Gonzalez looked for a location by literally knocking on doors, asking the owners if they would be interested in leasing the building or even partnering with him on the business — “anything to get my foot in the door,” he says.
He eventually found a landlord who agreed to work with him and in March 2015, Gonzalez started the build-out, working evenings after his full-time job as an account manager for a lumber company. By September, the store was ready and opened to the public — though success did not come instantly.
“Well, it was slow,” he says of those first days.
The location was not ideal, “out in the country, in the middle of two towns,” according to Gonzalez, but he had successfully opened his first brick-and-mortar business at the age of 23. He next dedicated his life to not only running the store, but learning the ins and outs of the business, like growing a web presence, the importance of online reviews and designing the right advertisements.
Gonzalez opted not to use his stores as a “piggy bank,” which allowed him to expand when opportunities allowed.
But Gonzalez also studied his competition and learned that another local shop was overcharging on products because they could. He says when people got wind of a store with better prices, customers began seeking out the Bake Shop, which started advertising with the slogan “get baked, not burned.”
“Some people are just out here looking for money,” he says. “For me, it was more about people, product and price.”
Gonzalez also leaned on his background in politics, having run for statehouse while still in college and then a few local races after (often getting decent numbers for a Democrat in a very red section of the state, but never winning) and using his people skills to build good relationships with vendors, as well as customers.
Learning
It wasn’t only the business side of the business that Gonzalez needed to learn about, it was the cannabis side as well.
Born in Mexico and not naturalized as a citizen until his college years, Gonzalez did not have a lot of experience with cannabis growing up, always concerned about the possibility of deportation for smoking or possessing weed.
Gonzalez, like his customers, learned about new products by trying them and jokes that his first dab came from a vendor — and knocked him down for about 16 hours. Gonzalez says the experiences have taught him about not only the effects of the products so he and his staff can better serve the people who come into the shop, but also help him judge value and pricing, both on the wholesale side and on the shelves.
“I actually want to try the products that I’m selling, and I can actually have a good analysis on it instead of just talk about it,” he says. “If it tastes like shit, I’m not gonna buy it, you know what I mean?”
Gonzalez also prides himself on the low turnover at his store and says his “family first” mantra has allowed him to hang on to employees.
“It’s making sure that they feel comfortable, making sure that they understand that I’m reachable at all times,” he says.
Growth
Unlike many first-time store owners during the initial green rush, Gonzalez made the decision to not use his store as a “piggy bank,” working as many hours as he could to keep the staff small. He focused on not over-hiring and making sure to put aside as much as he could for when the tax man showed up.
“I didn’t want to just take money out to take money out,” he says. “I guess you’d say that was probably one of my better strategies.”
Gonzalez says his youth and relative inexperience also helped him early on as he was more “reactive to the market” than other store owners might have been, making changes in product and pricing when needed to keep customers coming back.
The philosophy paid off about two years into business when another store in the area ran into tax trouble. Gonzalez was on friendly terms with the owner, first helping with a loan and then purchasing the other store outright, opening a second Bake Shop in Union Gap. He later opened a third shop in George, home of the Gorge Amphitheater, which hosts concerts and festivals all summer long.
And while he keeps the same products stocked in each shop, the decor in the shop near the concert venue features a music theme instead of the more rustic look in the agriculture-based communities of Union Gap and Prosser.
He also continues to watch his competition to see how they are handling things like loyalty programs or procedures in the store.
“It’s a good way to learn without having to pay consultants,” he says.
Gonzalez is also putting his political skills to work inside the industry, working on the state’s Social Equity Task Force and lobbying lawmakers to lower the state’s notoriously high tax rate of 37%, especially for smaller businesses.
And while it all may have started as dream, Gonzalez looks back proudly over the very real work he has put in over the past seven years in the industry and looks ahead to what the future can bring.
“I really would like to sit down with the governor, or sit down with the Legislature and figure out how we can lower taxes on cannabis businesses,” he says. “This has become my life.”