Betting Big On Weed And Virtual Currency: A Look Into The Paragon Platform
KINDLAND spoke with Paragon's founder to see if the platform is the answer to the weed world's banking problem.
Despite the legality of running a cannabis operation in more than half of the country, access to banks and traditional financial services remains blocked because of the drug’s federally illicit status. Though the "high-risk" industry finds workarounds for managing monetary assets, full compliance for those in the weed game requires participants to be highly adept at jumping through hoops. Paying taxes, running employee payroll, and the vast majority of business going down between cannabis enterprises are all-cash deals.
Another disruptive business category seeing rapid growth is the virtual and cryptocurrency space. These cash-free avenues are now giving patients new ways of procuring chronic and dispensaries additional vehicles for accepting payment.
Which brings us to ParagonCoin.
Simply, Paragon is a technology-driven, cannabis-industry focused platform, real estate development firm, and startup accelerator. Its founder is the former model/reality-television-star-turned cannabis entrepreneur Jessica VerSteeg and she calls it “a blockchain for the marijuana industry.”
Frankly, there are plenty of reasons to be cautious about engaging in any marriage between the two quasi-legal grey areas. The virtual currency space is extremely volatile and routinely sees extreme price-changes and fluctuations in value. From the outside, virtual currency-enabled weed deals feel like part of a recipe for legal trouble.
Though it's just as likely Paragon could achieve what it sets out to do when it comes to legal weed because, as we all know by now, nothing is set in stone. That's because VerSteeg is backed by a team with former experience with Google, Facebook, and Y Combinator––the Silicon Vally accelerator that graduated Dropbox, AirBnB, and Reddit. The Paragon advisory board also includes rap artist and cannabis entrepreneur Jayceon Terrell Taylor, AKA The Game.
In order to glean additional insight and context into the platform, which began selling 100 million ParagonCoins on September 15, KINDLAND reached out to Jessica VerSteeg.
KINDLAND: There are other industry-specific cryptocurrencies already on the market. How is Paragon unique compared to the others?
Jessica VerSteeg: There are indeed other cryptocurrencies available and various blockchains to work from. Paragon, however, addresses the specific needs of the cannabis market. As a result, all of our solutions and models are tailored specifically to the market needs.
We're offering a complete solution for the cannabis industry: seed-to-sale tracking, medical marijuana prescription verification, lab test results and verification, cannabis-related services for consumers and B2B. Everything except the substance itself until a legal framework is ready for it, because right now it is federally illegal to buy cannabis with crypto. To be honest, it is federally illegal to buy it with a credit card, with PayPal, with Venmo, with crypto, with anything but [cash].
KINDLAND: Is the blockchain truly "legitimizing" legal weed? There are many other digital payment solution providers operating within the cannabis space, yet the drug remains illegal at the national level.
VerSteeg: Is blockchain legitimizing weed directly? No. Only changes in law can do that. In order for laws to change and cannabis to become legal, there will be a strong need for transparency and regulation in this very fractured market. Paragon provides these solutions based on blockchain technology. The immutable ledger and sophisticated smart contracts will allow for verification solutions from seed to sale without touching the sale of the product itself.
Blockchain-built smart contract technology is ideally suited to organize, systematize, and bring verification and stability to a traditionally unchecked industry. The industry needs help with lab testing, supply chain, ID variation, compliance, and so on.
So, Paragon will use blockchain smart contracts to:
• Create an immutable ledger for all industry related data via ParagonChain.
• Offer payment for industry related services and supplies through ParagonCoin.
• Establish niche co-working spaces via ParagonSpace.
• Organize and unite global legalization efforts through ParagonOnline.
• Bring standardization of licensing, lab testing, transactions, supply chain, and ID verification through apps built in ParagonAccelerator.
KINDLAND: What "specific cannabis market needs" does Paragon actually address?
1. Product Supply Chain: Fertilizers used, type of water, energy, organic, etc.
2. B2B payment system for the “unbankable” $100B industry, for everything (legal/marketing/PR/contractors) except the cannabis itself (we don’t want to break any laws. We are actually here to improve transparency and compliance, we want to help change the law without breaking the law.)
3. Real estate: It’s very difficult for a cannabis startup to get a space. It must be in a green zone approved by the city, it’s very expensive, and usually landlords are only willing to sell. It’s prohibitively expensive for small startups, so we’re planning to build co-working spaces specifically designed for cannabis-related startups.
4. Compliance through smart contracts: We’re building a blockchain solution to verify and validate all data from medical prescriptions to lab test results and licensing.
5. Building global online and offline community of like-minded people pursuing complete cannabis legalization all around the world through education and lobbying.
Screenshot via ParagonCoin
KINDLAND: Will merchants be able to use ParagonCoin?
VerSteeg: Not for cannabis, that would be illegal. There are cryptocurrencies out there that are doing or trying to do it, but it’s federally illegal. We’re for compliance, transparency, and trust. So no, not until the legal framework allows us to do it. But once we can show the government that this system works, it's safe, transparent, and trustable, I don't see why they would not work on changing laws to allow the cannabis community to use crypto for everything. But until then, PRG will not be used to purchase the actual cannabis product.
We’ll be signing up growers, B2B services (lawyers, PR, marketing, equipment suppliers), manufacturers, and doctors. We’ll work with the dispensaries and delivery services for compliance like ID verification but not to accept PRG for cannabis.
KINDLAND: How do you see the blockchain legitimizing the cannabis industry?
VerSteeg: The blockchain is an incorruptible, immutable digital ledger that will allow the industry to be way more efficient and transparent than it is now for regulators and the end users. Both industries are still emerging and it seems like a very natural synergy between the two.
KINDLAND: How does it provide transparency to the industry? Is this dangerous for consumers?
VerSteeg: No, quite the opposite. As of now, you need to bring cash to everyone (if you follow the banking regulations) in the industry—for the lab tests, for your lawyer, for your rent, etc. We’ll try to have all these services in-house (but independently owned) and be available for PRG. There are dangers now. For instance, I saw some suppliers forging lab tests showing no THC in CBD products when it was clearly not true... We’ll store and validate all those things on ParagonChain, providing transparency.
KINDLAND: How do you see ParagonOnline actually working?
VerSteeg: Somewhat similar to SteemIt: You pitch your idea, startup, or initiative or share news and get votes in PRG that you keep. All UpVotes are going to be kept for the post author and DownVotes will be burnt. We’ll also provide a verifiable database of services that are available for PRG, provide tools for scheduling appointments, escrow etc. Another important aspect of ParagonOnline is the ability to listen to our community and let them collectively make decisions about important topics on our development—what features they want to see first, where they want us to open the next ParagonSpaces location, etc.
KINDLAND: What are your goals and ambitions of the crowdsale? How much to do you plan to raise? How will that money be distributed and used?
VerSteeg: We want to sell all 100,000,000 tokens that are available for sale and we’re on track to achieve our goal. We were able to allocate almost 30M so far and we’re still early in our pre-sale stage. A big chunk of money will go to real estate to actually build the ParagonSpaces, our online platform is the second biggest expense and of course global business development to ensure Paragon adoption by the industry around the world.
To learn more about Paragon and join the crowdsale, click here.