Exceptional Retailer 60: The Psychedelic Shack



An ownership change at the The Psychedelic Shack in Pensacola signaled a new era for the store with an owner who put employees first and empowers their ideas

When Jason Henry and his wife Crystal bought The Psychedelic Shack in Pensacola, Fla., four years ago, he decided to do something unconventional. He just started working there. He didn’t tell the employees he was the new owner. He acted like any other new employee.

It might sound like a scene from “Undercover Boss,” but it’s also a testament to one thing that you’ll learn pretty quickly if you spend anytime talking to Henry about his approach to The Psychedelic Shack and the retail business in general — he’s not your average shop owner.

“For the first month,” Henry says. “I didn’t even tell anybody we bought it. I just went in and acted like I was a new employee, learning the ins and outs of the business, so I could see what was going on, so I could see what changes we needed to make.”

There was another reason too, one that Henry readily admits: He was kind of clueless about the business he was getting himself into. Not only was he trying to take the temperature of The Psychedelic Shack, he was trying to learn the business himself.

“We hadn’t been around this industry in 20 years,” Henry says. “In my post high-school days, I knew a little bit.”

The Psychedelic Shack has been serving Pensacola with three locations for 25 years. It’s a smoke shop that wisely features tattoo artists and piercers too. Since it caters to a beach community, The Psychedelic Shack also serves as a gift shop, selling things like disc golf accessories, incense and pendants.

Four years ago, the original owner wanted to sell the business and try something new. Crystal Henry was his bookkeeper. She remembers her husband saying in the past that it would be cool to open a business like that. So they considered it.

“We always wanted to own our own business,” Jason Henry says. “We knew we could make anything succeed. We took a couple tours of the shop and our eyes lit up and saw the potential. We took a big jump and decided to go for it.”

The Henrys split up responsibilities like this: Jason does 80 percent of the front-end work, like sales and managing staff, and 20 percent of the behind-the-scene stuff. It’s vice-versa for Crystal, whose book-keeping prowess makes the back-end of the business chug along.

Around the time they took over, Jason started writing a list of things he wanted to change about the business in a notebook. It would be his bucket list for things he wanted to accomplish. More than 60 of them. He says he recently looked at the notebook and, in four years, they’d done all but one of them.

“All these dreams we wrote down,” Henry says. “In four years, we accomplished them, which is awesome.”

The key to success has been twofold: First, Henry readily admitted what he didn’t know, set out to learn and listened to his employees along the way. Second, he gave employees the power to make the shop better.

“I’m a people person,” Henry says. “I’m not the boss-owner guy. I love to let the employees teach me and be themselves. I know I don’t know everything. I want a little bit of my employees’ input in the store.”

The first big change was starting to embrace American glass more. The Psychedelic Shack had mostly been selling imports from China, but Henry quickly learned that handmade American glass made a big difference.

“In the beginning, all the glass was the same to me,” Henry says. “Product was the biggest learning curve.”

He credits his general manager Cory Finch and artist Gregory Hoff for turning him onto the wider world of American-made glass. Henry started to attend trade shows and learned more. Eventually, the shop got into heady glass too. Now The Psychedelic Shack works with more than 100 artists

“I ran with it,” Henry says. “I feel like I fell in love with all the art.”

This is how serious Henry is about giving power to his employees: Every year he does something called The Ant Farm, where he gives employees $50 to buy something, bring it into the store and sell it. It runs for 90 days, with employees trying to best each other by taking their $50, selling their products, re-upping on their product and selling more.

It turns every employee into an entrepreneur and it helps bring new products into the store. And it turns The Psychedelic Shack into a business incubator.

“They can buy anything they want to bring into the store to sell,” Henry says. “And they can sell it for whatever they want. It makes them excited. It makes them feel part of the store, like they’re involved and invested.”

The resulting products? Various new smoking accessories and other things the store didn’t sell before, like fidget spinners and adult coloring books.

Here’s another cool thing The Psychedelic Shack has done: Henry agreed to help one local glass artist, Paul Nover, get better at his craft by sending him to Texas to study under other artists for four days. The shop paid for his travel, hotel and meals.

“He’s back, he’s pumping out more product,” Henry says. “And he’s cut our costs.”

Next, The Psychedelic Shack has eyes on the future. One of the rules instilled by Crystal is no debt, so once they’ve paid off the purchase of the first three locations, they’ll be looking to expand into new areas.

They want to open shops outside of Florida. Their families have roots in Arizona and Michigan, so they’re eyeing those states. They want to open 25 shops over five years, Jason Henry says.

“Who knows where this is going to take us,” he says. “Our shop motto, that we always said from the get-go, is we’re going to put the business first, the employees second and ourselves third. And if we did it in that order, we’d never have to worry about a thing.”

So far, so good.

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