GREG GILBERT / THE SEATTLE TIMES
Brothers Chris, left, and Alex Shreeve at the Belltown location of their cannabis shop, The Bakeréé.
Amazon is booting marijuana businesses
SUNDAY BUZZ Local business bits
Seattle Times business staff and wires

For nine years, Arnold Marcus had been making a living selling spice grinders on Amazon.

His company, Golden Gate Grinders, had several colors available, repeat customers and an invitation to join the Amazon Accelerator program, a path toward becoming a supplier for Amazon’s private label. Marcus, 68, would package orders and take customers’ calls from his living room in an Francisco, proud that he as involved n every aspect of the business he built.

That changed overnight last year when Amazon removed his listings, flagging his products as a violation of company policy prohibiting the sale of drugs and drug paraphernalia.

For the uninitiated, a grinder can be used for spices like oregano or rosemary, or for weed.

Marcus spent months fighting his ejection from Amazon’s online marketplace, to no avail.

“There was no indication in all those years that this is a prohibited product,” Marcus said this summer.

“One day, they were supporting me and then one day it ended.”

Amazon says its guidelines around drugs and drug paraphernalia are longstanding and state that products can’t be primarily designed for making, preparing or using a controlled substance.

Grinders that are equipped with features specifically for marijuanarelated use are not allowed on the platform.

“Third-party sellers are independent businesses and are required to follow all applicable laws, regulations and Amazon policies when listing items for sale in our store,” a spokesperson said. “We have proactive measures in place to prevent prohibited products from being listed, including drug paraphernalia, and we continuously monitor our store, remove any such products and take corrective actions when we find them.”

For sellers, the language of the policy is clear but enforcement is ambiguous.

In some cases, Amazon has flagged products that have been sold on the platform for years. It has removed some spice grinders, like those that Marcus was selling, while allowing similar products to remain for sale. One grinder that is still on sale includes in its product description that users can “just keep your weed in it until you need it.”

A search for “spice grinders” on Amazon.com brings up more than 8,000 results.

“Spice grinders for cannabis” has over 660.

“They’ve always said there’s no drug paraphernalia but there were lots of products that were ambiguous products that were able to sell on the platform for years and years,” said Lesley Hensell, co-founder of Riverbend Consulting, which helps third-party sellers on Amazon.

For sellers, there was a period of very little enforcement followed by a period of very strict enforcement, leaving them with a lot of questions and a lot of products in their garage, Hensell said. “These guys are talking about unloading stuff at flea markets.”

Riverbend Consulting started hearing from more sellers about problems listing grinders last year when, Hensell says, Amazon changed the artificial intelligence it used to search for contraband on the site. Now, listings that slipped through the cracks are flagged by the software right away.

The cannabis industry is inherently risky, said Chris Shreeve, co-founder and vice president of business development at PrograMetrix, a Seattle-based ad agency with a cannabis and CBD division.

Shreeve also co-owns The Bakeréé, a dispensary with two locations in Seattle.

“We have to play the hand that we’re dealt in the cannabis space,” he said. “It’s a difficult hand, but we’ve got to do it.”

Platforms like Google, Meta and Amazon are “tiptoeing around acceptance,” Shreeve said, hoping to follow federal rules and keep up with changing guidelines across state lines — while also finding some way to tap into the roughly $30 billion cannabis industry. Amazon has campaigned for marijuana legalization at the federal level and, in June 2021, announced it would no longer include marijuana in its drug screening program.

The tech giants tend to leave gray areas for products that are not “plant facing,” like grow lights that can be used for lots of different kinds of plants and grinders that can be used for lots of different kinds of herbs, Shreeve said.

That ambiguity has left many companies in the cannabis industry looking for workarounds, Shreeve said.

On Google, a company can share information about cannabis but can’t sell the product or a related product.

So brands will market blog posts about the industry in the hopes potential customers will click through and later make a purchase. Meta allows companies to market topical CBD or hemp products but not anything that users would smoke or chew.

So brands will create separate landing pages for different products, hoping again to reach new customers.

“Each platform has its own hoops to jump through and red tape to navigate but there are brands that are sidestepping those rules and regulations because of the importance of exposure for the company and the product,” Shreeve said.

“I don’t fault cannabis and CBD brands for trying to navigate the ambiguous rules and regulations on some of these larger platforms,” he continued. “But it needs to be done under the assumption that there is risk.”

Marcus, from Golden Gate Grinders, has spent the past year tweaking his product and the way it appears on the website to respond to Amazon’s concerns. His seller account is still active, but his products aren’t listed for purchase, meaning he can’t bring in any revenue.

One Amazon representative suggested his product was removed because he had a mesh screen. He removed the screen, relisted the grinder and watched it get flagged again. Another representative told him the product was taken down because there were keywords related to tobacco. Marcus checked his listing and didn’t find any references to tobacco. Yet another representative pinned the blame on specific semicolons and quotation marks.

After months of small changes, Marcus scrapped his listing entirely and created a new product: a 2.5-inch silver spice mill without any key words, photos or descriptions.

Amazon still flagged and removed the product.

“I’m done, there’s nothing else I’ll do or can do that will change what’s going on,” Marcus said. “I feel even if I create a Golden Gate Grinders toothbrush, it’ll be removed.”

Many third-party sellers outside the cannabis industry have run into similar problems, reporting that a confusing decision — often driven by an algorithm — has kicked products off Amazon’s platform with little explanation and little room for recourse.

Last year, Benton Countybased Chukar Cherries was removed suddenly when Amazon’s fraud-prevention algorithm inexplicably linked it to another seller in China that had been deactivated for violating company policy. It took 67 days to get the sweets back online.

In online forums for thirdparty sellers, concerns specific to grinders have cropped up again and again. One user posted that they “can’t understand why others can sell” but they cannot. Another said it was unclear what triggered it, “but for whatever reason [the] majority of the listings were yanked.”

Another said Amazon’s “one size fits all policy makes sellers lose millions.”

Before Golden Gate Grinders ran into its own trouble, Marcus had been a vocal supporter of Amazon on these types of forums. He posted that being a third-party seller on Amazon gave him, “a burnt-out software engineer, an old man, an opportunity to recreate himself.”

Now, he is considering filing for bankruptcy, has had to ask his brother for a loan and has taken on credit card debt.

He had been buying inventory to prepare for the moment Amazon relisted his products, but, after nearly a year off the platform, he’s no longer optimistic he could build his business back up.

He’s lost customer reviews that are crucial to getting his product on the top of the search results and his competitors have been operating while he’s been sidelined.

“Even if somebody woke up one morning and said ‘Let’s let him back on,’ that would be very challenging,” Marcus said. “I have to start from the beginning. They seriously damaged and hurt my company.”

At Riverbend Consulting, Hensell has started to tell third-party sellers in the spice grinder business it’s probably time to switch markets.

“At this point, I don’t think anything will work. I think what Amazon has done is working as intended,” she said. “They need to find other products to sell or sell it somewhere else. It’s not going to happen on Amazon anymore.”

Lauren Rosenblatt, Seattle Times Amazon reporter


Portland building aims to be Oregon’s first ‘living’ one

With virtually no fanfare, no ribbon cutting, no politicians and little public money, one of the most environmentally advanced buildings on the planet opened its doors last fall in downtown Portland.

Portland-based PAE Consulting Engineers spent four years planning, designing and constructing the five-story building at 151 S.W. First Ave. The unassuming brickclad structure generates its own power, collects and treats its own water, and composts its waste.

On top of that, it’s privately financed by a lender and private investors, just like most commercial buildings.

This is “one of the only office buildings in the world to be powered entirely by the sun and get all of its water from the rain that falls on its roof while simultaneously providing a financial return for its investors,” said Paul Schwer, president of PAE and the driving force behind the building.

The PAE building offers a shred of good news to a downtown beset with more than its share of challenges.

PAE is seeking the coveted “Living Building” certification for its headquarters, the most stringent and demanding environmental performance standard for buildings.

The Seattle-based International Living Future Institute administers the program and has certified just 30 structures worldwide as fully living buildings.

To get its dream-building done, PAE enlisted some of the biggest names in Portland business, first among them prominent real estate developer Edlen & Co.

Jill Sherman, a partner at Edlen, had worked closely with the city of Portland when it tried and failed to build the Oregon Sustainability Center a decade ago.

This time, there would be no federal grants, no state revenue bonds and, as it turned out, no high-level city officials throwing their clout behind the project.

“We didn’t really know whether it could be done,” Sherman said. “We had a huge and lofty goal. We wanted to use the traditional real estate financing model — debt and equity — but also to build the most sustainable building in the city, by far.” First, they needed a site.

Their broker, Apex Real Estate Partners, suggested a quarter-block at Southwest First Avenue and Pine Street.

It was a surface parking lot owned by the Goodman family. To Sherman’s surprise, the Goodmans were eager to participate. They accepted equity in the building in return for the land.

“This is the largest net-zero building in the country,” said

Greg Goodman. “It’s a huge deal.”

A similar dynamic played out with other companies.

Apex took equity as part of its fee, as did ZGF Architects, the high-profile Portland design company.

Walsh Construction agreed to serve as general contractor and invest in the building. Bob Walsh, the company’s 78-year-old chair and co-founder, said his motivation was not financial gain.

“Somebody’s got to wake up to global warming and be able to put the environment ahead of profits or our world is going to burn up,” he said.

The team got a few lucky breaks.

Their pitch to investors got stronger after new federal tax rules unexpectedly made all of downtown Portland an “opportunity zone.”

Investors in opportunity zones — nominally “economically distressed” areas in need of economic development and jobs — can get significant tax advantages.

The team also managed to avoid the enormous run-up in timber costs by buying and locking down prices early.

The building’s interior features mass timber components from a British Columbia supplier.

Plus, the project managed to close on its bank loan on April 1, 2020, just days before COVID-19 mandatory lockdowns took effect in much of the region. Had the bank considered the loan weeks or even days later, it might never have been approved, Schwer and Sherman said.

The good fortune ended at that point.

Construction crews dealt with ice storms, heat domes, social unrest in the streets of downtown and wildfire smoke so thick you couldn’t see across the street. The pandemic was a constant worry.

“It was like the plagues,” Sherman said.

But Walsh managed to adhere to the 16-month construction schedule.

On a recent walk-through, Schwer shows off a popular feature of the building’s ventilation system. He opens the window. Few modern office towers have operable windows, eschewing fresh air for the benefit of mechanical heating and cooling.

Outside, tomatoes grow on the window ledges, each pot with its own tiny drip line.

Most of the rest of the building’s green technology is decidedly more complicated.

The numbers tell the story:

• 72,000 gallons of rainwater can be stored in two giant cisterns on the ground floor. An on-site treatment system makes the water safe for human consumption.

• 20 compost bins convert the building’s waste products into fertilizer.

• 0 use of so-called “Red- List” materials — substances that may be legal but are deemed to be unhealthy or bad for the environment.

• 5 operable 12.5-by-10.5- foot windows that will provide 70% of the fifth floor’s ventilation and cooling.

• 90,000 locally sourced bricks make up the building’s exterior. The Living Building challenge requires the use of local materials — 20% of materials must be sourced from within 311 miles of the building site. The bricks were manufactured by Mutual Materials at its plant in Mica, a small town south of Spokane.

• 83% leased. A bank and two nonprofits have leased space in the building, joining PAE and Edlen, bringing occupancy to 83%. That’s enough for the building to earn a profit.

The under-the-radar approach of the PAE building team is a dramatic contrast to Portland’s last big drive toward a living building.

The Oregon Sustainability Center was huge in its ambition and its price. It was to be the first high-rise in the world that would comply with all the Living Building standards. Initial estimates pegged the price at $120 million.

The effort was led by the city of Portland and the nowdefunct Oregon University System. Architects produced a stunning design of a cylindrical tower topped with a leaf-shaped array of solar panels.

Then-Mayor Sam Adams went to bat repeatedly for the building, predicting it would secure Portland’s image as a sustainability leader.

The city pledged $6.7 million in urban renewal money. It also agreed to become one of the building’s tenants.

Critics balked at the price and questioned the rationale behind the project. The crash of the housing market and related recession made it a harder sell. Adams finally pulled the plug in October 2012.

The PAE building may not match the Oregon Sustainability Center in size or flash.

But it got built, and it is working.

In the end, that may be the structure’s lasting significance — it could democratize green building. The building provides a proof of concept that a relatively small company can pull off this kind of project without enormous public assistance, said Mark Perepelitza, an architect and director of sustainability at the Portland design company SERA.

“If this is just a high-end boutiquey thing, then we’re not going to save the world,” he said. “PAE shows that we can scale it up and make it attainable.”

Jeff Manning, The Oregonian