Pubdate: Mon, 08 Feb 2016
Source: Seattle Times (WA)
Copyright: 2016 The Seattle Times Company
Author: Bob Young


Just after Uncle Ike's Pot Shop opened in Seattle's Central District, 
it boasted in an ad, "Our weed cures Ebola."

Knowing that merchants in the new industry weren't allowed to make 
any medical claims about pot, the fine print disclaimer winked: "If 
you believe this ad, you are a (expletive) moron."

That in-your-face Vern Fonk-on-weed sensibility has helped make Uncle 
Ike's the state's top-selling pot store, with $1.4 million in monthly sales.

It's also changing the personality of 23rd Avenue and East Union 
Street, once a predominantly African-American corner, with neon 
signs, a wall-mural ad, food truck, sign-waving mannequin and 
retro-chic van to shuttle customers from Capitol Hill. Above the 
entrance to the store's office, down the block, another neon sign 
mocks: "Hey stoner, around the corner."

Ian Karl Eisenberg is Uncle Ike. ("I've always tried to get people to 
call me 'Ike,'" he said. "It's one of those old solid names.") A 
serial entrepreneur who has sold phone sex, ringtones and 
zero-calorie soda, he owns the shop, as well as four nearby parcels. 
In this business, as in the past, he has operated close to the legal 
edge with an audacity rarely seen in Seattle business.

When a rival was about to open a shop on Capitol Hill, Eisenberg knew 
that state rules did not allow a pot business within 1,000 feet of 
certain venues where kids congregated. He opened a game arcade across 
the street from his rival.

When that rival's real-estate broker dished on Eisenberg's blocking 
ploy in the comments thread of the Capitol Hill Blog, Eisenberg's 
lawyer fired off a cease-and-desist letter. When a new shop, Ponder, 
opened near Uncle Ike's and employed sign-spinners, Eisenberg sued to 
stop the spinning on public sidewalks.

Jeremy Moberg, a licensed grower who sells to Uncle Ike's, believes 
Eisenberg has improved the industry with traditional business 
practices and more. Uncle Ike's was the first to routinely give 
consumers information about pesticides its vendors used, Moberg said.

"Everybody wants to hate Ian for all sorts of reasons but I don't see 
it," Moberg said.

Eisenberg faces one strain of criticism unlike anyone in the local 
industry. He's blamed for gentrifying his neighborhood and displacing 
its dwindling number of African Americans by selling weed - the very 
same business that's led to disproportionate arrests of African 
Americans across the U.S.

Several hundred protesters descended on Uncle Ike's on the Martin 
Luther King Jr. holiday. A group calling themselves the Seattle Black 
Book Club demanded that Eisenberg turn over most of his property to 
their cause, pay for the legal defense of minorities with drug cases 
in Seattle, build a community center and give financial aid to people 
displaced from the Central District.

"If I'm going to get shaken down for protection money I kind of hoped 
it would be the Russian mob or the mafia, not a book club," Eisenberg 
said after the protest. "I feel like I'm in a Spike Lee movie."

A prep-school past

Eisenberg is an industry leader in another category: exotic rumors.

He served in the Israeli military, according to protesters outside 
his shop in August. (Not true, he said.)

He worked with law enforcement to install a camera on a street pole 
near his shop, protesters said. (The federal Bureau of Alcohol, 
Tobacco and Firearms hung the camera as part of a regional gun 
task-force investigation.)

His shop makes $500,000 a day, a protester told The Seattle Weekly. 
(His sales, not profits, average about $45,000 a day, according to state data.)

In reality, Eisenberg, 48, grew up in Seattle's Madrona neighborhood 
and attended local private schools: Bush, Seattle Prep and Seattle 
University. He's married, has three sons and lives in Leschi.

He didn't aspire to be an astronaut or ballplayer. "I've always 
wanted to be in small business," he said.

He first made a name for himself, according to a 1997 Wired magazine 
story, in the phone-sex business where his father was considered a pioneer.

"I had a service bureau," Eisenberg said. "We offered everything from 
adult sex, to horoscopes, to psychics and jokes of the day."

Any moral qualms?

"Is pot," he asked, "a moral business? Is working for Boeing and 
making warplanes moral?"

Eisenberg ventured into Internet-related services. In 2000, he and 
two of his companies were accused of deceptive practices by the 
Federal Trade Commission (FTC).

Eisenberg's companies sent $3.50 rebate checks to millions of small 
businesses and consumers, the FTC said. By cashing the checks many 
unknowingly agreed, the FTC said, to have Eisenberg's companies as 
their Internet Service Provider. They started getting billed up to $30 a month.

A federal judge ruled that Eisenberg and other defendants had 
violated the law. They were ordered to pay a $359,000 judgment.

"It was a mistake," Eisenberg said of the scheme.

A few years later Eisenberg was president of Blue Frog Media, a 
Seattle startup in the mobile ringtones, games and graphics business. 
A "series of management snafus, board conflicts and lawsuits put the 
company in a death spiral," the Seattle Post-Intelligencer reported 
in 2008; 250 employees lost their jobs.

"Venture capital is risky," he said.

Around that time, he was a founder of Zevia, a zero-calorie drink 
sweetened by the stevia herb. Zevia is now on shelves in Whole Foods 
and 20,000 stores in all, Eisenberg said. He and other founders sold 
their majority interest to a private equity firm, he said, and he 
retains a "tiny" share of the company.

He first bought properties around the 23rd and Union intersection two 
years before recreational pot was legalized.

At the time, as Eisenberg likes to note, the intersection was 
forlorn, with derelict properties ringed by chain-link fence. Two 
different owners of a sandwich shop at the corner had been gunned down.

But the area was destined for change, said Donald King, an architect 
who worked in the Central District for 35 years. Given its proximity 
to downtown, Capitol Hill and Lake Washington, it was inevitable that 
investment, development and displacement would come to the area, said 
King, a former member of the Seattle Planning Commission.

Eisenberg said his goal has long been to "activate" the area.

"Skating on the edge"

After state officials held a lottery for pot-store licenses in early 
2014, Eisenberg bought the company of a lucky winner. He would only 
say he paid "a lot."

By fall he opened Uncle Ike's, then Seattle's closest shop to Capitol 
Hill's many weed fans, over the objections of Pastor Reggie 
Witherspoon and the Mount Calvary Christian Center next door.

The church sued, claiming Uncle Ike's shouldn't have been permitted 
some 250 feet from its teen center. Judges ruled against two of the 
church's legal motions, and Witherspoon said the church could no 
longer afford the lawsuit. The pastor said he remains "livid and 
irate" about the proximity of the pot shop.

Uncle Ike's hires employees from the neighborhood and nearby, 
Eisenberg said, praising his staff for the shop's success - along 
with "crazy low prices."

Uncle Ike's is now selling $99 ounces, about half of what the 
cheapest ounces cost at Seattle's leading shops. That appears to be a 
first in legal pot, said Greg James, publisher of Marijuana Venture 
magazine. Eisenberg is going to change the industry with his 
approach, James predicts, forcing some farmers - "who think their pot 
is grown with unicorn poop," Eisenberg said - into greater 
efficiencies and lower prices.

Another Eisenberg strategy: Because pot is still illegal under 
federal law, businesses can't take basic tax deductions such as the 
cost of labor. To compensate for that lost value, Eisenberg realized 
his employees needed to move fast.

Unlike some boutique-style shops, Uncle Ike's feels more like a 
Starbucks, with customers queuing up to be served by a handful of 
budtenders moving at a brisk pace. Some nights the line stretches out 
the door and around the corner, under the "Hey Stoner" sign.

In response to Eisenberg's lawsuit to stop Ponder's sign-spinners, 
its lawyer alleged that Uncle Ike's had itself skirted state 
advertising rules, starting with the Ebola ad that regulators halted.

And while stores are limited to one 1,600-square-inch attached sign, 
Uncle Ike's has larger neon signs on its paraphernalia shop across 
the parking lot, plus a wall mural on the building next to the shop, 
all with the same logo. Eisenberg's 1967 Checker stretch cab is a 
rolling ad that travels by children, Ponder's lawyer said. (The cab 
advertises the Uncle Ike's paraphernalia shop, not pot, Eisenberg said.)

Eisenberg is "all about skating on the edge," said Sam Burke, whose 
shop, Ruckus, was delayed for months by the arcade, which was 
unpermitted by the city and eventually closed. "Personally he's a 
very pleasant guy," Burke said. "Professionally, I'd never work with him."

Eisenberg admits his arcade ploy was meant, in part, to frustrate Burke.

"Life is not a popularity contest," he said.

Changing neighborhood

The neighborhood is better with Uncle Ike's, Eisenberg said. Fewer 
illegal dealers hang out. His properties haven't displaced any 
residents, he said, and they're bringing visitors and a safer feeling.

Still, he acknowledges the paradox of Uncle Ike's selling weed where 
African Americans were arrested for the same. He stood in the shop's 
parking lot and listened to recent protesters. He reached out to them 
via Facebook, to no avail, he said.

"How do you set up a system," he said, where those jailed for pot 
"can benefit in the same ratio they were disproportionately harmed, 
especially in a heavily regulated industry?"

Protesters said he should contribute to legally defending people 
facing drug charges.

"Please tell me how," he said. "I'm not familiar with these programs 
if they exist."

King, the local architect, said he wouldn't single out Eisenberg for 
such broad demands as the protesters made, nor blame him for 
gentrification. Developers are building or planning 275 new 
apartments in the area. The Midtown Center plaza is up for sale. 
Those properties will likely shape 23rd and Union's future more than 
Uncle Ike's.

But King is concerned about the church, which provides a place for 
cohesion for African Americans who have gone from two-thirds of the 
Central District population in 1980 to about 20 percent today.

With the pot shop on one side and a car wash Eisenberg owns on the 
other, King worries about the church "eventually being squeezed out" 
by some redevelopment plan of Eisenberg's.

He'd like to see Eisenberg "do something positive with the church," 
maybe even share some of the carwash parcel with it.

Eisenberg said he has plans for the carwash.

"This spring we're adding a really cool power-shine feature to each 
self-serve bay and upgrading the water main," he said. He figures the 
car wash has another 10 or 15 years of life.

Meanwhile, Eisenberg is hoping to put a pot store in his Capitol Hill 
property at 15th Avenue East and East Republican Street. He plans to 
rent the space to a new licensee but brand the store as Uncle Ike's, he said.

Although Seattle will see its number of licensed stores rise from 21 
to 48, Eisenberg vows to stay on top. He won't back down from a P.T. 
Barnum style that some fear could cause a backlash against the industry.

"If an aggressive style means lowering costs and giving customers the 
best deal, I think it's a good thing," he said. "We're treating it 
like any other business."


Top pot-selling stores statewide

Based on January 2016 pretax sales data.


Uncle Ike's, Seattle


Main Street Marijuana, Vancouver


Greenside, Des Moines


Kushmart, Everett


Clear Choice Cannabis, Tacoma

Source: Washington State Liquor and Cannabis Board
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MAP posted-by: Jay Bergstrom