Life

Meet The Woman Who’s Creating ‘Blockchain For Weed’


Jessica VerSteeg

Jessica VerSteeg has lived herself a life. She’s an ex-beauty queen, a world-famous model, and a onetime contestant on The Amazing Race. She’s traveled the world, made great money, and grown famous in the process. But VerSteeg’s ambitions are far bigger than fame. Bigger even than cash.

She wants to change the world by making weed legit. She really might pull it off too, by being the founder and public face of Paragon, a company seeking to bring blockchain technology to the cannabis business (and, perhaps in time, all of agriculture). By creating a digital ledger for marijuana transactions up and down the entire supply chain, VerSteeg and her husband Egor Lavrov, may potentially solve the weed industry’s massive transparency problem. They’ll also become a de-facto certifier of sorts, allowing end users to understand the products they consume to an incredibly nuanced degree, thereby killing the “weed is a drug” stigma still prevalent across society.

This week, between ecinomic summits and a whilwind schedule of meetings, VerSteeg sat down to talk with Uproxx about blockchain, the personal loss that compelled her to enter the cannabis inudstry, and Paragon’s famous spokesperson, rapper-entrepenuer The Game.

Let’s start with how got into this field. I guess, for you it started with weed, right?

I started with cannabis. I created a company in San Francisco called AuBox, and it was a monthly subscription service to medical marijuana. After running that company, and I saw most of my suppliers were pretty honest, they had already gone through a vetting process, so they were pretty good suppliers, but I would say 10% of them … I realized that their lab results, which just came to me on a piece of paper, were fabricated, photoshopped, edited, and that’s pretty dangerous.

At that point, California’s cannabis was just medicinal. You’re giving this product to cancer patients or to children with epilepsy, and they’re thinking that they’re getting something that’s organic or something that’s pure CBD, because that’s what the supplier says it is. That’s what their lab results say.

I realized that we couldn’t take these kinds of risks with just trusting a piece of paper, so I started re-testing these products that I had questions about. My instincts were right. They were fabricated lab results. So, I then turned to my husband and asked if there was a way that we could start getting these results in a blockchain to at least compare the farming data with the lab data.

Jessica VerSteeg

Can you explain how blockchain works for in the marijuana business?

Well, actually no one knew about it when I was testing it. Internally, I was just calling it the AuBox blockchain. We were just putting data on there, so we were using it internally to vet people and get a history of who was being honest and what their past results were.

Let’s talk about users. What will happen is they’ll be able to go to a dispensary or coffee shop, wherever they are, whatever it’s called, and scan a QR code that the supplier has put on their product, and they’ll be able to select in our app what they want to see.

If they want to know the growing data — maybe to them it’s important how it was grown — or the history of this plant, or where it was grown. They can look all this up through the farming data. If they want to know the exact lab results, they can go to the lab data and see, “Did any of this batch test positive for mold? Did it test positive for pesticides? What is the THC percentage here?”

So the consumers will now be able to see the real information, versus just trusting packaging labeling or trusting the bud-tender that just knows what he’s reading and doesn’t know the real history, or trusting the reputation of a dispensary. So that’s on the consumer side, but think of it in the bigger picture if you’re the government. Now you can actually really track and trace a product, because they have something in place like this now, but they’re not on the blockchain, so they’re not immutable.

Right now the methods also clunky, they’re hard to integrate, they don’t always work, and if the government can’t always access this information, why do we expect them to trust this industry? That feels shady, right?

Now that you put it that way…

So if you give them this block chain and this data that they have access to 24/7 that’s immutable, and the government can say, “Okay farmer, you grew 100 pounds of weed, and you’re telling us that 50% of this crop tested positive for mold and you had to throw it away.” Right now, they’re just gonna say, “How do we know that? Maybe it’s on the black market. Maybe you paid this lab off. I don’t know, so… sorry, but you’re gonna have to pay taxes for 100 pounds, because we don’t trust you, and we can’t log into your track and trace protocol right now.”

But with Paragon, they’ll be able to use this constantly. It’s not glitchy, it’s not hard to get integrated, it’s not hard to access. They’ll be able to get on and say, “Okay farmer, you grew 100 pounds of weed. I see on the block chain this lab that uploaded their lab results, and it did say that you tested 50% of your crop positive for mold and you really had to throw it away …”
‘Cause we all know that on the dark market, you’ll never sell moldy weed. The government knows this as well. They’ll know that the farmer really threw half of their crop away. Now, in the future, the government can say, “We trust you, we see what’s going on, we’ll only tax you for what you were able to sell.”

For the government, it’s obviously … What makes things legal? Like alcohol and cigarettes and opiates. Isn’t it taking taxes? So once the government can see what’s going on and tax it properly, I think everyone will want it to be legal.

So you don’t have a retail facing weed company, correct?

No.

This is your focus: a blockchain that acts like a certifier? You could also have a block chain for certified organic produce, is that right?

Absolutely, and a lot of people ask us that. Maybe someday, we’ll grow into that, but I feel like there are other people working on that. And I know that cannabis seems to be the crop that everyone leaves out or forgets when they’re building the software for other farming crops.

Right now, you can’t take our blockchain and just say, “Okay, I’m gonna track these tomatoes,” because we customized it and built this from the bottom up. It talks about indoor grow, outdoor grow, the different grow rooms that it’s in, the different drying stages, how it was trimmed, all of this data that’s not applicable to tomatoes or corn or anything else that grows.

And is there a crypto element also?

The use of block chain technology is the actual focus. Crypto [ParagonCoin] came into it as something extra. The real reason that I thought of even creating a crypto for this application was that there’s a certain way of tracking. If you use bitcoin or anything else, it just says, “This wallet transacted with this wallet.”

Versus ours, it gives all of the data, and it says … You can actually say, “Okay, I see that this farmer was able to buy solar lighting on this day. Or this farmer bought organic soil with earthworms from this company on this day.” It gives you this second verification instead of a farmer just saying he grew with this, and maybe the lab results still say yeah, there were earthworms in the soil. This gives you that second verification.

Jessica VerSteeg

What you’re talking about is a level of business transparency that has never existed before. The fact that you’re innovating it in an industry which has been shrouded in secrecy for so many years, and still gets jokes from the older generation as if it’s some criminal enterprise, is really interesting to me. You’re basically saying, “Let’s be far more transparent than any mainstream corporation would dare to be.”

We will be more transparent than the liquor industry. More transparent than opiates. More transparent than cigarettes. This is something that we’re opening up and setting an example of how things should be in the future. Even voting. You’re creating something that’s going to be transparent for the entire future.

If you consider, like I just said, the voting. Blockchain base voting would help by making results fully transparent and publicly accessible distributed database technology could bring full transparency to elections or any other kind of voting. This doesn’t just fit to crops. There’s so much that can happen with blockchain and it’s transparency.

It’s surprising to me as well.

What is your business model? How does someone pay you to do what you do? And how does that work in blockchain in general? Do you guys take a fee? Do people participating with you pay a fee?

Well, there are very small fees that you have to pay when using it. There are just small fees on the blockchain. A farmer isn’t paying us to use this software. A supplier isn’t paying us. The consumers, the patients … No one is paying us. This genuinely came as a passion project of mine to give to the entire cannabis community for free.

People will pay when they use our coworking space. So there’s some sort of payment happening towards Paragon on that end, but the main part of this was our blockchain technology. I used to model, so I never thought that I would end up on this path, but something really unfortunate happened to me and I lost someone that was close to me from a young age to an accidental overdose of opiates [ex-NFL star Tyler Sash].

He had always asked if he could smoke marijuana for pain, and I didn’t know the benefits of it. I told him to trust his doctors and take these prescriptions and don’t take marijuana or don’t use marijuana. Long story short, he overdosed, and when he overdosed, it reminded me of what he had been asking me for, which was to use marijuana. So when I did this research of what he could have done for his pain, or what were alternatives for painkillers, marijuana kept coming up, and I had already been thinking that he had asked that.

I devoted my whole entire life — I quit modeling, quit all dreams that I had, and made this my new dream: to change the way people saw cannabis so that no one else would have to suffer like him. No one else would have to be in my position of knowing that they were ignorant and naïve and told somebody, “Don’t use marijuana,” and they ended up overdosing on the thing they were scared they’d get addicted to.

So I wanted to change this image, which is why I created AuBox, and then after AuBox, it led me into this. It’s something that I decided to give to people for free, because I’m lucky enough to have a comfortable life, and I didn’t need this, but what I needed was to heal myself. Healing myself was changing the way that people saw cannabis. So this is one step towards that.
I realize that the cannabis base needs this in order to change the way that people see it. And by doing that, you’re giving them transparency, and that changes the way that people see this plant.

That’s powerful. I think … Do you feel in someways that this is an idea whose time has come? When I heard about what you’re doing, and I started to dig in and read articles and connect to the story, the idea and the concept around what you’re doing feels so right and so now. It really feels so urgent at this moment.

It feels so right. It feels so right that it’s right now and somehow I just happened to have gone through those life changing situations that put me in this right place at the right time, and I was able to create this. I wouldn’t have been in the right place at the right time had I not become passionate about cannabis, and learned what it needs to become legal or to become more transparent. But at the same time, I am lucky that I already knew about crypto before it was even called “crypto,” when it was just called bitcoin.

I think had just graduated high school 2009, somewhere around there. My dad had said to my sisters and me, “You guys need to all have mutual funds and 401k’s and bonds and CD’s,” and I thought this was such b.s. I don’t want to listen to my dad. I thought, “There’s gotta be some other thing.”

I found bitcoin. My dad used to work at the Pentagon in IT, and he said, “Oh gosh, this sounds like something really bad. I think it’s from the dark web. You need to stay away from it.” So I didn’t buy it then, but I kept reading about it and following it, and at that time, there wasn’t a lot to read, but I was watching it grow. I saw it keep growing little by little. Eventually I bought my first bitcoin, and then for a while, I didn’t even know about the blockchain, I just knew about bitcoin.

So when I met my husband, who’s in tech, he thought it was pretty cool I liked bitcoin and I’m a girl, but he said, “You need to realize there’s this whole other technology. The underlying technology of bitcoin, it’s called blockchain, and this is what it does.” Now, he’s the tech side of Paragon. We’re using the developers that he had in the past. My husband used to be a miner way back when bitcoin was worth .oo2 cents. So that part of our technology, I really trust. We have amazing developers.

So yeah, it is the right time, right now, with cannabis becoming legal. With different countries creating their own currencies. Different countries adopting the blockchain. It seems like I got lucky to have it all come together in one pot.

Jessica VerSteeg

But you also seem the right person to lead it. Just your dynamic ability to help people wrap their heads around this … Because I’ve seen articles about you, and people are really clearly striving to understand something which is relatively difficult for someone who is not deep in tech to understand.

I think that I’m a great person for this because I’m relatable. I’m somebody that I think other people view as, “Okay, she wasn’t in tech her whole life. Maybe we can ask her.” Because … A little disclosure, my mother was in encryption, or doing encryption in the Gulf War. Twice, 101 days each time. My father was in IT at the Pentagon with a million things that he’d done there. My husband’s in tech, so I do have a little tech side, but it wasn’t something that the public knew.

I think that they come to me with these questions because they relate and they realize, “Okay, she wasn’t from that space, maybe she can explain it to us and we’re not as embarrassed to ask. She can say it a normal way,” which is true. I’m able to say that, because this wasn’t … I chose the path of modeling, not tech, and I understand it from both sides. I can speak on a very high level of it, and I can also speak to a normal level of this.

The hardest thing is the older generation that wasn’t in tech. This older generation … It’s difficult for them to understand something digital because a lot of them still want to track their spending in their check book. They don’t even trust their credit card to track it on AMEX.com.

They’re a little bit difficult, and you have to take the time to explain to them how it’s going. The people that it’s very easy to talk to are the people of my age group, because we used credit cards for so long, our whole lives basically, and we aren’t tracking. We’re not recording anything in our check book. We know that when taxes come, we can look on American Express.com or Chase.com or wherever you go. It’s logged already for us. So we’re used to that.

The people that you don’t even have to explain this to are the people that are going to change this entire future, and when this older generation goes away and this young one comes into office or starts creating huge companies, they’re the ones that they get it, because they’ve been playing World of Warcraft their whole life. They’ve never touched cash. They used their mom or dad’s credit card, which means they just typed in some digital numbers and they digitally got these digital coins, and they bought a new cape or a new gun or whatever they bought online on their game, and they were able to use what they bought with their crypto.

So then they grow up in real life and they want that same thing. They don’t like touching cash because they never had to buy things with cash in the past. They’re used to Apple Pay. They’re used to this crypto with video games.
Now they grow up, and they will be the ones to change the laws and say, “This is normal. This is more reliable. This is more trusting. It’s more honest. And it’s easy.” So there’s a few different groups of people and a few different ways that I talk to them about crypto. On a personal side, even though it’s not a huge part of Paragon, it’s a huge part of my life, and I think that it’s important to teach people where it’s going, and why it’s a good thing.

Paper money is really Monopoly. You just print it. It’s not even backed by gold.


Last thing, tell me a little bit about the relationship with The Game, because he’s all over your guys’ Instagram, and I’m just trying to figure out, is he a part of the company? Is he someone that you guys hire as a spokesperson?

The Game is probably one of the best people I could have ever imagined talking about Paragon. A lot of people said, “Why do you have a rapper? Why do you have a celebrity?” First of all, I need to just clear the air. There are celebrities endorsing water. There are celebrities endorsing cars. There are celebrities endorsing anything and everything that you see today and that you buy, so that has to be cleared out of the way.

Second thing is The Game was the perfect celebrity for Paragon. Why? It’s one thing if we had Paris Hilton, who has no idea … Well, maybe she knows about block chain. I can’t say she doesn’t, but who I wouldn’t expect to have an idea, ’cause I haven’t heard her talk much about it. So I found somebody who I knew people looked up to in this space, and that space being cannabis. If the Game posts anything about cannabis, anything about sneakers, anything about anything he’s doing … A basketball game … People want to know.

So he has a cannabis company called Trees by Game. He was a co-owner or investor in a dispensary, and he’s grown up his entire life around cannabis, since he was young. When I wanted somebody that could talk to the public that didn’t know about crypto or about block chain, I wanted somebody that they could relate to. Game was the perfect person because he’s relatable. He’s young, he’s smart. He’s hard working, and he’s known in the cannabis space, so when those people that look up to him say, “Wow, The Game is talking about bitcoin or about Paragon or about block chain,” they want to then learn, versus if I just went to them.

Most of them don’t know who I am. I’m not going to inspire them to do some research on this. When Game did this, his whole following became interested on what blockchain is, and even if they don’t get into Paragon or decide to support our network, that’s okay, because to me, as I was thinking about earlier, my Jessica side is so passionate about teaching people, that’s what Game did. He taught so many people.

We didn’t give him any cash. Game genuinely believes in this and believes in transparency of cannabis. He’s a really good person. He’s not a money-hungry person. He’s not one of these celebrities that you can just buy. I had to spend a lot of time talking to him about what we’re doing, and he did all of his due diligence on it. He cared about what was going on.

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