Chet Billingsley is the CEO and Chairman at Mentor Capital, which provides funding and a range of other resources to businesses in the cannabis space. He brings decades of international corporate and entrepreneurial experience to the industry.
What makes your company different from others in the cannabis space?
Mentor Capital, Inc. differs from other companies in the cannabis space because rather than being a large grower, dispensary chain, or manufacturer, Mentor Capital is more like a cannabis shopping mall. We invite in other cannabis companies to operate out of our public market mall where they can then get greater liquidity, a higher valuation and it is easier for them to raise funds. We provide accounting, legal, and financial support to those companies that continue to operate their businesses under our umbrella. Later, after this incubation, they may go public themselves.
How did you get into the cannabis space?
The previous administration cut off funding for cancer immunotherapies that Mentor Capital exclusively invested in, and we exited before the sector collapsed. In 2013, an investor asked if we would consider a cancer-focused medical marijuana investment. I felt like that was like asking a chicken to go surfing in the ocean, but the scientist in me knew that medical cannabis was a great boon to cancer patients, so we started down that path in August 2013, and have been trying to make a difference with some of the higher quality companies in the cannabis space ever since.
Walk us through a normal day.
I only work on days that end in “y.” Usually, we are talking to companies about funding, the public markets, or we are completing financial or legal reviews. Mentor Capital looks for companies with sales in excess of $1M with the potential to go public. If somebody is smaller than that, we hope that they come back to visit us when they’ve grown and I almost always give them some advice about wherever they are on their particular funding pathway, since I started Mentor Capital with $1,000 in 1985.
We’re also often contacted by people who want to invest in us. We shun death spiral financing and look for our regular shareholders or accredited investors. Like many companies, we seek to grow at least at the rate of the market which is 30% per year, at this time. Finally, we talk to firms that are larger and guide them through the process of potentially operating in our public environment and eventually being spun off as a standalone public company if they wish.
What has been your biggest lesson about working in cannabis, and in business in general?
One of our biggest lessons that we’ve had working in the cannabis space, and in business in general, has to do with business ethics.
My role with General Electric was international business, and there I learned that there are considerable differences in the ethics of different people. In Judeo-Christian realms, they will generally believe that, “Thou shalt not lie, cheat, or steal, and no sexual hanky-panky.” In Asia, “Right thoughts, right actions, right deeds,” and “Be diligent like Buddha,” is the norm. When those two groups come in contact, there is conflict. In an area where there is great risk, like the Middle East, or in the cannabis space, the greatest guideline is often loyalty. In the cannabis space, if you are completely open and honest, follow the rules, and reveal everything to the world, some enterprising person in the attorney general’s office, or the sheriff’s office, will stop by to shut down your cannabis business and pick up all your possessions, and all the possessions of your family.
What do you see as your biggest opportunity?
Our biggest opportunity, as the United States moves toward legalization, is that we are positioned to assist to take the best entities public. That will be a large win for those entities that we teach to fit into the fully disclosed legal arena and for our shareholders as we participate in their upside.
What sets you apart to make you a potential leader in cannabis?
To say why I would perhaps be a leader in the cannabis field is uncomfortable. I could note that in this cannabis environment some people with the best of backgrounds are not allowed to participate yet, because their classic business experiences and reputations would be in jeopardy. Since I’ve been independent for about 35 years, I have more flexibility. I think I’m one of the few people involved in the cannabis world for several years with a West Point, Harvard University, Harvard Business School, General Electric, and Registered Investment Advisor background. Because I’ve been fortunate enough to have these experiences I may be able to help the push towards professionalism and integrity in the emerging cannabis space.
What is the most frustrating aspect of the cannabis industry today?
The most frustrating aspect of the cannabis industry today is the variation and illogical nature of the regulations that we’re forced to work under. For example, Mentor Capital has sponsored a glaucoma study for the application of cannabidiol (CBD) under the rules of the state of Florida. Of the first eight people that went through the program, we probably saved four eyes from having to be removed. We wanted to take the specific cannabis medicine that was being used and have it analyzed very carefully so we could determine what was causing these very positive results. But, the testing labs were not allowed to test the oil because the doctor’s office was not in the classic dispensary and distribution system.
The additional idea that cannabis is a Schedule I drug like heroin is just crazy. Of course, cannabis has great medical benefits, it is not dangerous, and it is not even that addictive.
An additional issue is that cannabis companies cannot participate in banking, which is exactly backward. To control graft, corruption, and money laundering all transactions in the cannabis space should be trackable because they are identified by a person’s name, using a credit card, or a check, and no cash transactions should be allowed.
What advice would you give to anyone looking to get into the cannabis space?
For anybody looking into the cannabis space, I would say there are two things that you have to look out for, and they are both regarding protection.
One, is you have to be very careful to protect yourself from the regulatory world out there that is uneven. Although you may be doing everything “according to Hoyle,” and following every rule, you can end up as one older fellow I know, who had all of his money including money from a sale of a previous business, his wife’s money who worked for the government, his kid’s college savings and even his mother’s savings from her husband from the 1950’s seized.
Also, if you’re dealing as a financier, and you’re coming from the outside, you have to be involved in the counting of the money, somehow to protect your investment.
What are your biggest tips for branding cannabis?
In 2013, cannabis products often looked like rice crispy bars in a baggy with a computer printed label slapped on. Now, everything has to be quality, or you just can’t compete.
Do you see any big changes coming in the future of cannabis?
The big change coming in the future of cannabis will be a national legalization in some form. That will change the landscape entirely, with significant consolidation and the entrance of major players.
Do you consume cannabis? And if so, what's your favorite way to consume?
I say all of these things from a background of not being a cannabis consumer. Nor, do I drink. I finished off a bottle of rum (I’m 65 years old) that I had bought 40 years ago, and if it weren’t for Strawberries Flambé, the rum would still be sitting in the closet.
The only use I’ve had of cannabis was after knee surgery about one month ago. By the liberal application of CBD salve on my knee, I reduced the pain, in my observation by about 50% in five minutes. I had the other knee operated on in preceding years, and I reduced the Vicodin I took from 50 pills to 6 pills. So, although as a scientist I am always a skeptic, seeing with my own eyes, or knee so to speak, has certainly made me a believer in the efficacy of this medical use of cannabis for pain relief.