Although many U.S. States have now legalised marijuana, whether for medicinal or leisure use, the industry still suffers from stigma, associated with less-than-honest providers, trying to capitalise on the trend and make a quick buck.
Paragon Coin CEO Jessica VerSteeg, a long-term supporter of cryptocurrencies, is now venturing into applying the principles of blockchain to legitimise the suppliers of pure-grade cannabis, thus reassuring consumers and changing the reputation of the entire sector for the better. To help solve the industry’s trust issues, Jessica started building a blockchain system that would provide a quality stamp on the chemical attributes of the marijuana products she distributes through the verification of lab results that can’t be tempered with. This would provide her customers with the much needed peace of mind they are seeking from marijuana products, and in turn, let the industry self-regulate by driving unscrupulous providers out.
Jessica VerSteeg never intended to work in the cannabis industry, yet as founder of the blockchain-based marijuana solutions company Paragon, she’s now tackling all of the challenges the industry faces today — from taxation to transparency to information and more — all while using blockchain technology to revolutionize the world of weed. As a woman who’s taking on not one but two male-dominated industries, we naturally had to talk to her — and she sat down with POPSUGAR for a wide-ranging conversation spanning from how to create a transparent, trustworthy marketplace for marijuana to the myriad challenges she’s faced as a female entrepreneur.
In 2014, VerSteeg started her first company, AuBox, as an attempt to normalize cannabis. A subscription service for licensed patients, AuBox enabled individuals to have their medical marijuana sent straight to their homes without having to visit a dispensary. But for VerSteeg, the most important part of the company was the work she was doing to inform people about marijuana. “I made this box that had everything in it,” she said. “It told the patients how to use it, showed the lab results, which showed the ingredients, and had everything that they wanted to know about how to use it: when not to use it, what not to mix it with. All the information that you don’t really know when it’s your first time using cannabis.” She was fulfilling her mission of getting safe, natural medicine to people who needed it.
But it was then that she hit her first major roadblock — she discovered that some of the lab results she was getting from her suppliers were fabricated. “It was shocking to me to think that I’m giving this product to patients, to kids with epilepsy, to patients with cancer, to grandparents with Parkinson’s, and they’re expecting this to be organic or pure CBD. I’m giving it to them because I just trusted this piece of paper as a lab result and it was photoshopped.”
VerSteeg was determined to find a solution that would ensure that her customers were getting the products that they had ordered, and with the help of her husband — who was working in the cryptocurrency industry — came up with a solution: blockchain technology.
Blockchain data is incorruptible; it was created to record virtual transactions of all types. Think of it as a platform where one sender can share information straight to the receiver in real time, essentially a Google Docs for important information (or currency, which is its main purpose to date). Files sent using blockchain can’t be altered, so by using it for AuBox, VerSteeg would know that the lab results she was getting came straight from the cannabis supplier. The technology worked, and she was able to prove that she was getting the quality products that she promised her patients.
VerSteeg hadn’t even realized that she had created a system that had the potential to completely transform the industry. “I realized, after a few months, that I was building something that the entire cannabis space could use, and if they use it, could make it legal: [the government has] made cigarettes legal, alcohol, opiates . . . and it’s because they can literally track and trace all of that, and they can tax it. With cannabis, they can’t track or trace it.” Yet blockchain can deliver that trackability for the government, thus expediting the ability to legalize cannabis. The technology provides transparency on both ends — the government can efficiently track product for taxation and suppliers can operate legally, even using blockchain to ensure they’re not being taxed on soiled product that they can’t sell or are getting energy-efficiency tax breaks for growing with solar, for example.
Establishing trust between the government and suppliers is not an easy task, but with an industry that’s still in legal limbo, VerSteeg feels it’s the only way forward. “We need to build something that’s going to bring this to a new level of transparency, that’s going to make this legal. The only way we can do that is as a team — showing the government how we grew something, where we grew it, how much we grew, how much we sold. We don’t need to keep hiding because all that’s going to do is keep going back and forth to where we’ve been in the last few years, and that’s getting growers burned.”