Cannabis Interview – Jessica Versteeg – CEO of Paragon Coin
CEO + Co-Founder of Paragon Coin
Location: San Francisco, CA
You know how the cannabis industry is touted for having a solid amount of great female leaders? Jessica Versteeg is one of them. When we first sat down with her earlier this year she was leading AuBox and now has begun a new and incredibly interesting venture with a group of powerful partners and advisors, Paragon Coin. Cryptocurrency is booming, cannabis is booming, and Jessica and her team have combined the two. When we first heard about Paragon’s pre-sale of its cryptocurrency (PRG) we had to sit down with Jessica again and get an update.
Here’s what this beautifully intelligent canna business leader had to say….
CM: I know you told me like a month ago about Paragon Coin so I wanted to touch base with you and hear about what you are up to now. We did the feature on CannabisMagazine.com about you and AuBox and now you have this cryptocurrency company blossoming. I wanted to hear more about it. I want to know about the vision, like what overall, vision is and your goals for the company.
First, are you still doing AuBox?
Jessica: We actually put AuBox on pause, because of all of these problems that I saw in AuBox, like trusting lab results and patient identification, renting office space, all of these things … Yes, I could kind of tackle them if I just kept AuBox in San Francisco but everyone is saying “Come to L.A.!” and Florida, bring it everywhere and although we could actually expand I’m terrified to break the law so I don’t want to expand to L.A. if my hands physically can’t be touching each box and checking each box and knowing that delivery people are literally delivering each box to the door.
If I can’t be in control like that of a marijuana company I’m just way too scared to grow. In order for me to grow, I asked my husband, Igor, I said “help me create a blockchain so that I could start validating and verifying all of these transactions first and then we can talk about growing”. He’s like, “Okay, no worries!” We ultimately decided to put AuBox on pause to build Paragon, and this turned into something much bigger.
CM: So your husband … Was he already in like crypto-currency?
Jessica: Oh yeah, well we both have been for a long time. We both have been into crypto for a very long time, it’s just nothing that anyone ever cared to talk to me about, I guess?
CM: Right. It’s definitely not something we have talked about with you before since so much narrative surrounding you thus far has been about your experience with the NFL and cannabis.
Jessica: Exactly, so just wasn’t mentioned in the conversation, but yeah we’ve been in it for a while and also blockchain has been a huge passion of ours for so long. And he’s been in IT since he was 16 so …
CM: Oh that’s awesome! So now you are following this interest.
Jessica: IT has actually been in my family … My mom and dad were IT in the Air Force, my mom went off to the Gulf War doing IT, dad worked at the Pentagon, my sister is a computer science engineer, now my husband. It’s kind of been in my life forever, it just kind of now became obvious, I guess, to everyone else.
CM: Oh, cool!
Jessica: Yeah, you know at dinner we talk about everything from “Do you want to go party in Ibiza or do you want to go to Burning Man?” And then the next conversation is “What do you think blockchain can solve with this?”
CM: That’s awesome.
Jessica: Those are the topics of our dinner table talk and it’s just a normal thing in our lives.
CM: So when did you guys first start building out Paragon?
Jessica: Well calling it Paragon was not that long ago, but building out for AU, when I just thought I was building it for myself for AuBox, we were just internally, Igor and I, calling it AU blockchain. That’s been going on for like 8 months now.
And then 4 or 5 months ago, once it started to get built for me, I realized wow, this is much bigger than just for me, and I could share it with the whole cannabis community. So to avoid people getting it confused with AuBox or thinking it’s the same thing we decided “Alright, if we’re going to open it for the public let’s call it something else” so we called it Paragon. And we actually literally put AuBox on pause just so that way there’s no confusion for people.
CM: One thing I found really interesting when I was looking at your Paragon Coin website was this whole like, co-working space concept.
CM: Could you tell me more about that?
Jessica: Yeah, I’m glad you liked that.
As I mentioned earlier, one of the problems I was having was renting office space, because in San Francisco, one, everything is ridiculously expensive, talk about bubbles! So once you find real estate, you’re going to have to pay a pretty penny and on top of that you have to find it in a green zone which is basically where a liquor license would be but for cannabis, it can’t be around a school zone and all this stuff.
So once you find that, then the landlord accepts you there and they need you to prove that even though you’re a startup you can pay a year’s rent so that they don’t go under, so once you’ve proved that then usually you’re okay, but we have to disclose that we are a cannabis company. Even though we’re not a dispensary with people coming in every 30 minutes buying products, it is basically just an office for us to work from, you still have to say that you’re a cannabis company and once you say that, forget it! Nobody wants you there, they’re like “the government’s going to take our whole building if you do anything wrong!” And they’re right, it actually could happen if I was some really big bad drug dealer. Plus, I mean everyone thinks we’re Russian and Mafia, so …
CM: Oh no! So discrimination based on being a cannabis company in finding office space was a big issue.
Jessica: Yes! And because of that it can be a hard hill to climb. But they are right, if we were doing something wrong the federal government could come and seize their entire building, so I understand their fears but that’s why they don’t rent to any cannabis startups.
Jessica: To rent there you have to pay an enormously large payment every month and you might as well own something by then. And it’s still, you have to pay it in cash which is just stressful, imagine if you’re paying ten grand a month for your rent! Actually it’s usually more than that for cannabis spaces, but you’re having to bring in that much cash your landlord every month, eventually you become a target and it’s dangerous.
CM: I can imagine! So, the co-working element of Paragon was to mitigate some of those common issues with ancillary cannabis startups finding space in big cities?
Jessica: Basically, once we decided to put AuBox on hold and make Paragon for everyone, I said “Well, we’re doing this, let’s just try to solve some of the other problems.” One of those other problems was this real estate issue, so I said let’s raise money for a co-working space.
CM: Tell me a bit more about that. What does a cannabis based co-working space concept look like to you?
Jessica: People can’t sell weed out of our space, not as a company, but it is a co-working space, like WeWork. I look up to WeWork a lot, I love what they’ve done for the co-working space community, they’ve made it cool, hip, affordable, and you get to work in an environment filled with like-minded people.
CM: Yeah, it’s great. Our company was working out of a co-working space for a while. We loved the vibe.
Jessica: We won’t be as big as WeWork, because they obviously cater to everyone and they’re huge, they bring in millions of dollars, but we will cater to the cannabis community. Let’s say you and I wanted to meet up for a cup of tea at our co-working space and you wanted to check out the flowers from my new grow. And you were like, “We just want to see how many tricombs on it or talk about the oils you can get from it.” At least we can do this in a normal co-working space that the person next to us isn’t going to smell this weed and be like, “I’m really uncomfortable,” and have the manager now kick us out.
CM: Right. So, an office space where cannabis can’t be sold but the presence of it in a business sense will be more openly accepted?
Jessica: We’ll be in a community with like-minded people, maybe you’ll find other people that you want to work with, maybe you’ll find an engineer who can do something amazing for your company, I don’t know. Different things like that. So you’re now working in a space that feels safe, and you’re not going to be judged or kicked out because you have weed. And in terms of the cash, one, we’re going to be really affordable, but two, you don’t have to pay in cash, we actually don’t even accept it, you can only pay in Paragon (PRG) tokens, our crypto, Paragon.
CM: Okay cool. That’s where the disconnect was for me a little bit. I was wondering how the crypto and blockchain tied in with the co-working space. The co-working space that is actually tied in to and powered by the cryptocurrency.
Exactly, a cannabis business co-working space powered by Paragon Coin.
So if you want to rent an office space, you just pay in Paragon (PRG) tokens. We’ll also have an in-house lab, and an in-house cannabis lawyer. So you’ll pay lab fees in Paragon (PRG) tokens, you’ll pay your lawyer fees in Paragon (PRG) tokens, and from the cafes if you want to get coffee, tea, donuts, whatever, you’ll pay in Paragon (PRG) tokens.
And then, depending on how much money we raise, we would like to build like, a little conference space, so if you are a Paragon (PRG) token holder and you are where our facilities are, you can just attend these conferences. It will be small in the beginning but it’s just creating this community.
CM: When I was looking at the timeline it looks like you’ll have voting for where the first space should be, right? Will it be in California? Or are you open to other states?
Jessica: We’re open to other countries even! It’s basically up to people with PRG token, I mean look, if it was up to me and I had all the money in the world and I could just build it where I want, I’d build in San Francisco, cause I already live here.
As much as it’d be easy for me to say, “Let’s build in California and San Francisco because I live here,” this token and this blockchain is for the community. Meaning that the community should decide where it’s at.
CM: We have some good friends who do operations consulting for cannabis businesses like dispensaries. I’m really interested to know what it’ll look like on the operations side. Like if it integrates with different point-of-sale systems and if you’ve tried any out yet?
Jessica: We do have people that are already accepting Paragon (PRG) tokens. It just hasn’t been activated yet because we’re still only in our pre-sell [Note: The pre-sell has now concluded]. But we do have people like, if you look up Growers International, they sell things like soil, lighting, whatever you need in a cultivation facility. It’s basically like a farmer’s dream for cannabis growing. Like Amazon, but for cannabis growers. So they accept Bitcoin right now, and they will also be accepting Paragon (PRG) tokens. So if you have Paragon (PRG) and you are a grower and you just want to buy soil, you can buy soil from them. Also, there is a law firm out of Michigan, that will be accepting Paragon (PRG) tokens.
There are a lot of people that are already accepting it which just means that once our token is finalized, then they can start taking our coins. But since we’re just in the pre-sell [Note: The pre-sell has concluded], no one can use the token yet, that physically doesn’t accept them yet, but there are people who plan on it.
CM: Will the consumers be transacting much with Paragon (PRG) or is it more of a business-to-business useful currency? Like can
Jessica: Yeah, it’s business to business. You cannot buy the actual cannabis products with our coin because that’s federally illegal. Just like you can’t buy weed with a credit card, or PayPal or Venmo. You can’t buy it with Crypto. The only thing right now in the U.S. that you can buy it with is cash. So yeah, it’s just business to business in terms of if you’re a dispensary and you need to pay the delivery guy, if you are a farmer and you need to pay your trimmer, if you are the company that’s creating candy bars and you need to pay your lab fees or your rent. It’s all business to business.
CM: What about Paragon that I haven’t asked are you most excited about and want people to know most about?
Jessica: The blockchain technology itself I’m super excited about that. Because that’s basically how it all started. I just started building it for myself and everyone starts out as something self-serving. I just wanted to make my life easier with 80 bucks and it turned into this accidentally.
But I think that’s the most exciting part for me because it’s helping this community shine that kind of has to be underground, it has to be frowned upon. It lets the cannabis industry shine because it illuminates that, yes, we are a smart group of people. And we use blockchain to verify everything. You can see every lab result, how much THC was in this, if the mildew test is positive or not, is it organic. And it’s stepping us up to a whole new level once everyone can see where this place came from, how it was grown, where it was transported at some other plants, all lab results.
That just brings us on a whole new level. To be honest, bigger than big pharma. They do not disclose every little detail. Sure, on the back of Tylenol, they might say what’s in it, but where did it come from and who touched the product every step of the way?
CM: Then one question, that I’m sure is super obvious and has been asked before, but has anyone asked you why not just use Bitcoin?
Jessica: Yeah. They don’t have the same blockchain in terms of storing data points. I mean, if you use a Bitcoin to pay for rent, sure. But their blockchain side, where are you going to write in this information? If you’re a grower, what do you have to plug in? There’s no … You can’t just plug in something that doesn’t exist. So we’re actually building this blockchain.
CM: So the magic is in the blockchain?
Jessica: Yeah, the magic is in the blockchain. Yeah, because everyone keeps saying, “Why not just use Bitcoin to buy weed?” Sure, go ahead. On the dark web, you can buy weed with Bitcoin. But, that’s federally illegal, so we don’t even facilitate that,and sure you can use Bitcoin for those things, but it’s just not the same blockchain. It’s not the same record keeping on the back end basically.
CM: So that means that where Paragon (PRG) is really strong is beyond being able to pay for business to business services and is beyond just being cannabis business friendly, and it’s more about data tracking and information tracking.
Jessica: Exactly. And it’s kind of like if you imagine an Excel spreadsheet mixed with Wikipedia. It’s this huge database. There are two verification signatures required, so that means the lab said, “Yes, we tested this,” and they send the results, then the vendor said, “Yes, they sent my product there and these are the results that got back.” It’s on this immutable ledger that no one can forge and no one can change.
If you change it, it’s documented what it was before and what you changed it to. And it has your name on it if you changed it. So if you went in there and said, “All of my stuff is tested … The lab said it all tested, half of it had mold in it,” and then I paid you and said, “Don’t tell anyone it has mold,” well now you changed it to 100% clean, well, it’s going to be seen. Everyone can see you. First you said mold, and now you said no. Why?
It creates transparency and accountability.
Jessica: It’s a pretty amazing technology. Everyone is starting to use this because if you even think of something off topic from ours, like real estate in Kenya. Their government is just going up to people’s door and saying, “Hey, I know you have this document that says it’s your land, but in this closed book behind those closed doors behind that closed building that you can’t access, says it’s actually ours. So you need to move out.” And they’re literally, right now, in today’s times, taking land away from people.
But with blockchain, that title of the land could be documented and secured for everyone can see, “It is my land.” And they’ll fight the government and say, “You can’t take this land from her.”
I think the future will be everything is going to be on a blockchain.
If you look up coffee, you’re going to be able to see where it was grown, how much rainfall happened on that crop, or everything and everything. Clothing, you’ll be able to see what kind of dye was used, where it came from, maybe even if they polluted any rivers. Like Forever21 and Zara and all those companies are going to struggle.
CM: I love that. This industry is working more and more toward transparency, product safety and solid supply chain tracking every day and it sounds like your blockchain is really aiming to contribute to that movement.
Jessica: Yeah. And I know a lot of companies don’t want this because, yes, people want cheap stuff and they don’t want to know how it’s made. Having all of the information available will hopefully cause people to think twice and they can actually see, “Wow, there’s a place that’s polluted now because of the ink and dye that they used on my shirt. And now there’s a little girl with cancer because that’s the only water she has to drink or even shower with.” People are going to start thinking twice and I think that’s going to change a lot for a lot of people in a lot of communities.
Or even in the cannabis space, there’s a lot of old-school growers. Half of them want everything organic and they want to prove to you, yeah, they’ve been here since the beginning of time. And then half of them have just decided to grow into these big crops and spread the heck out of it with pesticides and chemicals that you don’t even know what the strains natural characteristics are anymore. And they don’t want people to know that. Creating a blockchain like we have with Paragon is some scary water to tread because we’re giving information to people and a lot of big businesses that are trying to scale without being held responsible for their actions don’t like that.
CM: It’s like a social movement also.
Jessica: It is. I mean if you think back to when electric cars were trying to come out with these electric batteries, remember what the oil industry was doing?
CM: Freaking the fu*& out.
Jessica: Well, it’s kind of happening here too.
CM: Yeah, you’re messing with like a serious industry.
Jessica: Yeah. Well, we’re also messing with big pharma.
So big pharma, they’re not necessarily old school, but like the big growers that don’t want to disclose information. Even people who are just simple suppliers that don’t wanna say half their product had mold in it. You’re messing with a lot of people, but I think it’s fair because there’s products going in people’s bodies and people should know what they’re taking. Some people won’t care. Look, there’s plenty of people that eat a bag of Doritos every day and they’re like, “Fuck it. I don’t care. I know it’s bad for me. I’m going to eat it.” Some people … I still eat Lucky Charms all the time as candy. I know it’s bad. But at least I know what it is. I think people shouldn’t be afraid of it because like I said, not everyone is going to care. But for those that do, you’re opening up a big door.
CM: Awesome. Well, thank you for talking to me. I really look forward to seeing this all progress. And really look forward to seeing how it progresses over time to reach the retail and consumer end of cannabis.
Jessica: We have like two dispensaries we talked with. But we just haven’t had time to really dive into that part yet. Because with dispensaries, you gotta take time to let them know how blockchain actually works and how the Crypto works because they’re so confused like, “If you can’t buy weed with it, why do we need you?” But you’ll have to teach them like, “Yes, you can now pay your drivers and your delivery people. You can pay employees. You can store all this information. You can make all of your suppliers put all of their information on the blockchain.”
‘Cause I know a lot of dispensaries spend numerous hours and lots of money retesting products. This would just save them a ton of money and a ton of time if their suppliers already had that information on the blockchain and the lab has already verified it.
That’s all that they need to do is just look at that and then they can trust it. Because right now, yeah sure, this chocolate bar might say that they have the lab results and this is their test results, but they are not always true. They can be fabricated. They can be old. But if it’s on the blockchain, then you can see the exact time, what lab it was, what all the results were. So you have to take time to explain that to them so we haven’t had that time.
CM: Thank you for taking time out of your booming schedule to talk for a bit.
Jessica: Absolutely! It’s my pleasure. Let’s talk again soon.
CM: We definitely will. Thank you, Jessica.