Ever dreamed of opening your own cannabis dispensary only to find out you were short on funds, permits, land, or all of the above?
Now, with the latest NFT drop from Dr. Green set for October 1st, you might be in luck. For the reasonable price of $10,000, you can purchase a Standard Key NFT that allows you to sell cannabis strains from Dr. Green, one of the biggest cannabis distributors in Europe, in any country in the world where Mary Jane is legal.
Talk about utility!
Last week, we were fortunate enough to catch up with Ricardo Capone, the Chief Technology Officer at Dr. Green’s, to talk about how it all got started, the benefits of blockchain technology in the cannabis industry, “spoofing,” and much more. Here it is.
The following interview has been edited for concision and clarity.
Could you tell us the origin story of Dr. Green?
For the last five years, we’ve been involved heavily in the medical cannabis space in Portugal. We have facilities where we grow medical cannabis for distribution to institutions that utilize it. Conditions like multiple sclerosis, epilepsy, and Parkinson’s disease — these issues can be treated with cannabis because the problem is usually in the endocannabinoid system in the human body.
So, we develop different technologies, and our primary focus has been biotechnology. If we have a patient, we’ll take a swab of their mouth and analyze the DNA structure of the person, and we can see where the breakdown is that’s causing them to have a problem.
We take that information through to our second department, plant genomics. We have a strain library with around 2,100 strains analyzed across 50,000 seeds, and what it tells us is the nuclear genetics and the mitochondrial genetics of the plant. These two genetic bases give you a blueprint for where the plant will be as an adult. We can take those genetics as a seed and build a digital map of where that cannabis plant is going to be in terms of its THC, CBD, CBG, CBA contents, and all the different components that are beneficial for human needs.
We take that information, digitize it, and we have the human DNA profile. Then we cross-reference those two profiles with an algorithm I wrote that cross-references both databases and gives us an output of which constituent parts of which plant would best treat the patient.
Now, it may tell us that three plants would be needed. And traditionally, you would want to crossbreed those strains into one medicine for the patient. But crossbreeding takes a long time. You could be looking at four years to take three plants and crossbreed them. Obviously, if you’ve got a headache today, you don’t want to wait four years for a paracetamol. So, we needed to shorten that down, and that’s what we did. Parts of our intellectual property lies in a method that we use to basically cross those strains.
And how does that work?
We take tissue cultures from the three strains we need, and we mix them with seed cells from another plant. Then we 3D print a brand-new seed onto a silicate structure, and that germinates and forms an F1 level plant from the beginning.
Where you go through crossbreeding processes traditionally, you may take the mother plants, pollinate her with the male, and she would give you seeds. You then grow those seedlings and do the same again, cross-pollinate, cross-pollinate. That’s where the time comes in.
By the time you get the plant you want, it’s an F9 plant with lots of heavy metals. You then need to inbreed the plant to get it down to a pure strain.
With this process that we’ve manufactured, there’s no need for inbreeding. We’ve shortened the process to two weeks in the lab and around 60 days of flowering time. So, it’s around two and a half months instead of four years.
And we’ve been very successful with this method. Last year, as a company, we grew and sold 472 tons of bespoke flower, just around a 1.2€ billion turnover for the firm and around 900€ million in profit. And we’ve reinvested around a hundred million of that into what is now Dr. Green.
And a big part of Dr. Green involves identifying each seedling that we’re analyzing the genetic code of, and they all have these unique individual biomarkers within the seed that identifies them from the next seed. So even sibling seeds from the same mother plant can be individually identified.
But why is that important? With cannabis globally, the largest problem today is something called “spoofing.” Are familiar with what that is?
I read a bit on your site about spoofing. I hadn’t heard the term before, but I wanted to talk about it and how NFTs and blockchain could help eliminate that problem.
Absolutely. Spoofing is where black market cannabis enters the legal supply chain, and it happens all the time. For example, in the U.K., you would have a home grower take his weed and package it in Gelato packaging from Sherbinsky’s — which is a very famous and expensive premium brand. But really the weed was grown in his attic, and he’s just replicated legal packaging to make it look like the weed was imported from California.
Likewise in the U.S., you have large companies who are heavily taxed on their regulated cannabis growth. And so, it’s much more cost efficient for them to take weed from someone’s private grow, put it in their legal packaging, and sell it in the market.
And this happens all the time. You’d be shocked what percentage of cannabis in the market is spoofed. From the legal market, it has been as high as 60% in the months when it was tested. But the problem is there’s no way to prove it. Because once the plant is in a bag, it’s just a plant in a bag. How do you know where it came from?
So, what we’re able to do with the system creates a fortified way to identify the cannabis and the way that I’ve done that is with encryption. Are you familiar with how RSA encryption works?
Not in detail. Please explain.
RSA is the global standard, and it’s pretty much the encryption that backs the top cryptocurrencies. The encryption algorithms that are solved when blocks are generated on Bitcoin’s blockchain, for example, are all based on RSA encryption methods.
And RSA encryption, at its core, is you take 33 random prime numbers and times them by 33 other random prime numbers, and those two sets of numbers are private. Nobody knows them — that’s called your private key. And what that equals is called a public key. You can share that equaled result publicly and people can encrypt a message with your public key, but only the person with the private key that was used to generate that public key can decrypt it. That’s how RSA encryption works.
What I’ve done is I’ve taken the nuclear genetic of the plant and multiplied it by the mitochondrial of the plant — and what that equals is the public key. And I’m putting that as a QR code on the packaging of our cannabis. And when the cannabis is moving through our facility from the mothering room, nursery flowering rooms, and drying trimming packaging areas, the QR code is scanned every step of the way, and the data stream from that part of the facility goes into the software.
So when the user has one of our packets of cannabis, they can scan it, go through to our app and see not just where the cannabis was grown and on what date, but all the metrics — how much water was used to grow the plant, how much energy did the plant use, what chemicals went into it, was it flushed properly and on what dates, how many humans have touched it, what humidity or temperature was it grown or stored at, and what percentage of nitrogen is in the packaging — every single metric from our facility goes into that software.
It’s full accountability and traceability for the weed. Not only can the consumer have confidence in the purity and legitimacy of their cannabis, but a regulator can now take the weed out of the bag and use a genome sequencer in their local laboratory or in our laboratory. It takes around 12 minutes to do and it’s around $30, so it’s cheap enough for the regulators to do often. They can spot check the cannabis by its genome sequence, and its genome sequence should be the private key that unlocks the public key on the packaging. If they don’t match, then the cannabis has been switched, or the packet is fake.
It’s a very sure-fire way for the regulators to be able to check if cannabis is legal or illegal in their system. In fact, it’s so profound that we took this system to the regulator in Portugal, and they looked into making it a European regulation.
However, there were some problems. First, it was just software, right? So, it was hosted on a service that could be susceptible to hacks, and if it can be hacked and the data can be manipulated, it’s not strong enough to be a regulation.
Also, the risk of me being corrupted and then manipulate the data for financial gain was too high for them. So, they sent us back to the drawing board. And when I sat with our CEO Maximilian White — he’s the visionary behind everything that we’re doing right now — he suggested that I rebuild it as a series of smart contracts with a decentralized app on the Ethereum blockchain.
And that’s exactly what we did. We took all that data and decentralized it, so that when a seed is genetically sequenced and all the data goes into that software, it’s all happening by a smart contract and there is no human intervention in between machinery and blockchain. So that way the data can’t be manipulated at any point, and it can’t be hacked and changed later.
So, you’re bringing cannabis from the seed to the consumer and the blockchain is providing traceability and authenticity of product. That seems like a huge win for the cannabis industry. But tell me a little bit about the idea of selling digital keys to people who can then be distributors of your products around the world where cannabis is legal. What’s that all about?
When we took this to the regulator with the blockchain technology, they gave us a special authorization on our cannabis license. And that authorization is very unique. It’s not issued to any other cannabis company, and it states that we can transact cannabis on the Ethereum blockchain while utilizing ERC-721 tokens to facilitate those transactions.
Where that got interesting legally is that we could put our cannabis license into the NFT, which means the holder of the NFT can transact cannabis globally on this blockchain, while it is our cannabis that is being delivered. So, we built a dropshipping model similar to Amazon where the NFT holder would be the Amazon store.
They essentially go and onboard customers globally where cannabis is legal — 27 states in America, Canada, Colombia, Uruguay, Brazil, England, Spain, Germany, Malta, Czech Republic, South Africa, Kenya, Zimbabwe, and Thailand. There’s 811.5 million people on the planet that can purchase our cannabis in some legal form.
They will go into the background of the decentralized app, essentially a CRM system that connects to our inventory and distribution center. We then, as the regulated company, verify all the information about the clients, do the KYC, connect with the customer, and if they’re in a medical area we’ll connect them with the doctor who will provide them a prescription so that they can legally purchase the cannabis.
We take the customer through the journey as the company and then we distribute the cannabis directly to the customer, and every single sale that happens on this platform, we take the wholesale rates.
So, let’s say the wholesale was three dollars per gram, and the retail price was $10 per gram. The customer pays $10. We take out three dollars. We convert seven dollars to Ethereum, and we deposit that into the wallet that’s holding the NFT. So forevermore as that client is continuing to order cannabis through our system, the NFT is being rewarded with the profit.
And since the NFT holder would be similar to an Amazon store, they’d be doing their own marketing and trying to find clients in their local area?
Yes. Correct.
It sounds almost as if you’re taking your business and decentralizing it by putting these cannabis nodes out there in the world.
Yeah. That’s a really good way to put it. Democratizing cannabis [laughing].
That’s an unusual concept for a business. To say, not only are we going to sell this, we’re going to put other people on. What was the idea behind that? What are the benefits for your company? Also, I imagine it would be a difficult thing to pull off. Were there any drawbacks to this concept?
There are a lot of hurdles to the concept, absolutely. But one of the wins for our company would be the data. I’m a United Nations Ambassador for cannabis. So, I’ve been working closely with the UN in New York and we are developing a Summit — a United Nations General Assembly that will happen in spring of next year in New York with 157 heads of states, the head of the SEC to talk about how NFTs used in this way can’t really be considered a security because they’re not a derivative product that can be traded on speculation.
As a UN Ambassador, my job is to show the United Nations member states that the legalization of cannabis can be beneficial for the healthcare systems and beneficial for their financing tax departments.
And for me to be able to do that, what I need to do is collect as much data globally as possible around all different walks of cannabis transacting — from the medical to the recreational — and how data about how those customers are using products and how the taxes are being paid on those products and everything in between.
And so, this system allows me to do that on the blockchain where I can present the data to these countries without scrutiny. Because it’s blockchain, the data is irrefutable, and I will be able to leverage this company and this data to push the legalization of cannabis on a more global stage — which is my driving factor.
I’ve heard a lot of good things about Portugal’s approach to legalizing marijuana and decriminalizing drugs. What is your take on direction the world should be going in and if there’s anything that Portugal has done well in regard to legalization that you’d like to highlight?
Politically, Portugal made a great decision to decriminalize drugs in their system. They reduced crime rates dramatically ever since they did that. You don’t have people hiding and feeling ostracized in society for their drug use if they use personally and privately.
Cannabis is used all over the world. Portugal took it to another level by decriminalizing the possession of all drugs. It’s still illegal to sell without licensing, of course, but it’s not illegal to possess.
Taking the taboo factor away stopped all the naughty kids wanting to be naughty. It stopped the “rebellion.” You can look at students in university in England, and they’re always getting high and partying. But students in University in Portugal are studying. They’re not interested. It’s taken the taboo factor away. It’s no longer the cool thing to do. I think that was the right thing to do.
If someone buys an NFT from Dr. Green, do they have access to all your products or are they given certain strains that make it more unique to them? And when a product does arrive, is there anything that distinguishes it or makes it personal to the NFT holder?
Good question. Do you want to sneak peek? Want me to show you?
Sure.
We have three types of NFTs on our platform. There’s the Standard Key, the Gold Key, and the Platinum Key. There will be 5,000 Standard Keys for minting around the planet. We also built what’s called the Digital Universe with 20 Planets. They all have their own backstory, which is a cool, geeky story about the characters who live on these worlds. But more importantly, they have native strains that grow on each planet.
So, you would come and look at the strains on each planet, and you’ll see what feelings they give you, what it helps with, what the flavors are, what the popularity score is, and the description about the cannabis and its background. And from that information, you can go, “Okay, I want to sell this subset of strains on my store.”
Then you would mint your key from that planet and that would give you access to these particular strains around the world. The Gold Key can trade any kind of strain from any world. I guess the Gold Key is a god of the universe. It can move around, and it can trade whatever kind of cannabis it wants.
The Platinum Key is reserved for our celebrity partners, and the Platinum Key has a few additional benefits other than being able to sell weed from anywhere in the universe. Platinum Key holders also get to create their own strain of cannabis with our geneticists. They’ll come to our facility in Portugal, build their own strain of weed, and we’ll put that onto the platform for the Platinum partners.
When you have your NFT and your wallet, you simply connect to the decentralized app, and then it logs you into the backend of your NFT, and you can see the history of your orders, your profit, and an overview of your business.
Thank you.
For more information on Dr. Green’s you can visit their website here.
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