Ron Tchorzewski – CFO of Med-X, Inc.
Ron Tchorzewski, the CFO of Med-X, Inc. is a veteran financial mind that cut his entrepreneurial teeth in both the startup and globally recognized business worlds. For Ron, the decision the enter the cannabis space came from the successful application of cannabis to the medical world, in addition to his love for developing startup companies. He watched documentaries and read articles about the variety of uses for the cannabis plant. After researching the industry and conversing with his colleague and COO of Med-X, Matthew Mills, Ron decided this was his chance to give back to his community through this next great venture. Med-X, with the help of Ron, recently became the first medical, research, cultivation or product company in the cannabis industry to have a Reg A filing accepted by the SEC. What does this mean and how is Ron making sure Med-X is staying at the forefront of the cannabis industry? We finally tracked Ron down so that we could start up a conversation to figure out these answers.
What was the deciding factor that led you to enter the cannabis industry?
I decided to enter the cannabis industry because I saw that there was real merit to the medical side of the industry. Be it documentaries that are shining a light on the medicinal use of cannabis, or the heartwarming stories of young children or elderly citizens who are being treated successfully with this alternative medicine, it is amazing to see the impact cannabis is having. Being able to provide an insight and service to people that is as beneficial as this industry can be is amazing. The medical cannabis industry helps people and I feel like it is my personal way to give back to society.
What were you doing before you got involved in the cannabis business?
Before the founding of Med-X, I was with Pacific Shore as well as my own CFO consulting operation where I worked quite extensively with several startup companies, helping them build their infrastructure to get them out of the startup stage and on to the next level. I got the bulk of my experience with a startup company in Silicon Valley.
The medical cannabis industry helps people and I feel like it is my personal way to give back to society.
When I first joined them, they were a high-tech company that made $15Mil in revenue and had 120 employees. When I left 7 years later as Vice President, we were a global company who made over half a billion dollars a year and employed 2,500 people. Seeing the company evolve from the ground up is really exciting for me.
That’s another reason for getting into the cannabis industry. It’s a new venue for me, but also it’s somewhere I can get in on the ground level and potentially help to structure what happens in the industry. For example, banking is a big issue in the cannabis industry. It is a subject that I keep on top of so as to make sure that Med-X is following every necessary protocol, allowing us to become leaders in the space.
Have you dealt with any banking difficulties at Med-X?
No, the biggest issue or challenge regarding the cannabis industry and banking industry is for those individuals that touch the plant. That’s where it becomes tricky as far as the banking side. With cannabis being a Schedule 1 illegal product, the banks don’t want to associate themselves with cannabis businesses because of their federal regulations.
We are at the ground floor of a billion, maybe even trillion, dollar industry.
Banks are concerned that the government is going to come down on them because of the illegality on the federal level. Med-X is more of an ancillary products company right now with our Nature-Cide product and online media platform, MarijuanaTimes.org. Of course, with our research and development facilities being as advanced as they are, we might develop new products down the line that will change our current status. But as of right now, we aren’t dealing with any banking challenges for the reasons I just laid out.
Could you walk me through the point where you realized that the cannabis industry was going to be the next big boom?
I realized the potential of the industry in a discussion that took place between our CEO Dr. David Toomey, COO Matthew Mills and myself. Matthew originally came up with the idea for Med-X and he turned me on to the medicinal side of the industry. From there, I read countless articles and watch a very influential documentary by Dr. Sanjay Gupta, in which he talks about the medical benefits of the cannabis plant, especially on the CBD side. In the film, he shares how CBD had basically saved the life of a young girl, as well as the amazing impact CBD was having on seizures and pain management.
This information really broke down the door for me. It made me pay attention, and I realized there was an amazing side to this story I needed to know more about. Also, I took a step back and thought about the irony of allowing alcohol to be legal. People get a buzz from alcohol much like people get a high from using cannabis, yet one has been shown to have this potentially remarkable impact on medical treatments. After learning all of this, I decided I wanted to help push that narrative into a positive direction as best I could and Med-X is giving me that ability.
Can you share with us what it is you do at Med-X?
At Med-X, my main role is Chief Financial Officer. I work very closely with our COO, Matthew Mills, as well as the whole team. Med-X is definitely a team effort. The main role as the CFO lies in handling the financial aspect of the business, working with the outside attorneys and putting together our Regulation A filing for the SEC, just to name a few examples. I’m also managing the audit that we are going through, making sure everything is done according to GAAP and in line with what the government’s going to be looking for from a cannabis industry company.
I love that I can help in all aspects of the business, so that if someone has a non-financial question, I can still give an answer that will solve the problem.
My passion for this project stems from the fact that this is still a startup style company, so you’re in on the ground floor and you’re involved with all aspects of the business. Yes, I handle the financial side of the company, but I also get to talk a lot with Dr. Toomey and Matthew about our testing facility protocols. We look at the different types of machinery that we have and what we might need going forward. Often times we also get together to problem solve as a group. Getting involved in all aspects of the business really gives me a rush.
You’ve spent some time working in the startup space and now you’re part of a bigger company. What is your favorite part of working in a startup?
I’d say my favorite part is really being able to get my hands around all aspects of the business. I don’t feel that I’m an expert in every area of business, but I’ve been around long enough to have acquired some very useful experience in these arenas. I’m very well rounded, whether it is from the test facilities that we have to working with the team on the digital magazine, and so on. I love that I can help in all aspects of the business, so that if someone has a non-financial question, I can still give an answer that will solve the problem.
What is your least favorite part of being in a startup?
I don’t know if there is anything that doesn’t excite me about a startup. Obviously, there have been startups that I’ve been with that have not made it to the next level, so obviously that’s a little disappointing and frustrating. I think if you talk to any venture capitalists you’re going to see that their investments, don’t always work out. No one is 100% successful and I would say the majority of most ventures are not successful. The ideas that make it all the way are really the home runs. That’s what I think we have here at Med-X, a home run.
Don’t be afraid to give your opinion. However, when you give your opinion, be ready to offer a solution as well. An opinion without a solution is just a complaint.
We are on the ground floor of the industry and we will be well set up before the adult-use side of the industry come into play in California in the next year or two. People have already begun to realize the medical benefits to this plant and the legislation is pushing further down the line to get cannabis re-scheduled as a level 2 or 3 substance. When that happens, we will be ready to evolve with the new marketplace without skipping a beat because we’re already putting that framework in place.
As an entrepreneur, when did you really realize that Med-X was going to be able to take that next step? What do you think set it apart from some of your previous ventures?
The one key thing that has set Med-X apart from others, even the one’s that have been successful, is the team. Everyone on our management team has had a great deal of success in the past and the present and has a “can do” attitude. Nobody is afraid to get his or her hands dirty and put in long hours. That’s pretty rare for a startup and I think that is a key aspect and a definite ingredient for success here at Med-X.
Med-X is the first company in the medical/research/cultivation/product cannabis space to have a Reg A filing accepted by the SEC. What do you think that filing and potential acceptance means to the cannabis industry as a whole?
I think it recognizes the fact that we are a viable business and investment opportunity for people. We’re in an industry that is, to some people, a little concerning. However, with the SEC approval and the transparency of our business model, people will realize that we’re more than just a cultivator. We’re a broad range organization that has a digital magazine platform as well as a number of products that the industry needs.
People have already begun to realize the medical benefits to this plant and the legislation is pushing further down the line to get cannabis re-scheduled as a level 2 or 3 substance.
I think being the first cannabis related company to get Reg A approval by the SEC could make us as a leader in the industry. Furthermore, I believe there was a total of 10 companies that have been accepted with their Reg A filings, most of them financial, investment or tech companies. I think that being the first medicinal products company in the cannabis industry to have this filing is definitely a feather in our cap.
Do you have any personal role models or someone who has been a mentor to you through your entrepreneurial life?
The one person that comes to my mind is the CFO of Cadence Designs Systems, which was the company I mentioned earlier that went from $15Mil when I got there $500Mil by the time I left. He was the CFO and he taught me a lot about being able to deal, not only with the private setups of a startup company, but also how to handle and deal with analysts and market setting expectations once we became a publicly traded company. He was the mentor that really helped me stay on track to get to the CFO level in my career.
If you could go back before you entered into the cannabis space and give yourself a piece of advice, what would you tell yourself?
I wish I had known more about the medicinal benefits to cannabis and how large a market that really was. Obviously, growing up in the 60’s and 70’s, cannabis’ medicinal side was never even covered, let alone thought about. People were only talking about the recreational side of things. I think if we talked more about the benefits early on, this industry would be further along than it is.
What do you do in your free time?
I enjoy spending my free time with my family. I like the outdoors, playing golf, going to the beach and watching football and baseball. I relocated to San Diego a while ago and loved my time down there. Now I’m in the Los Angeles area, but still have access to the beach and everything. My wife and I enjoy visiting wineries.
Are you really good at golf? What’s your best round?
My best round is 79. When I played consistently I was single digit handicap. Right now I’m probably mid-teens because I haven’t been playing that much, but I definitely still enjoy it.
Are you a big reader? Could you share with us maybe a book that’s helped you as an entrepreneur or you’ve been inspired by?
There are two books that I can think of, both by Jack Welch, the former head of General Electric (GE).
One is ‘Straight from the Gut’ and the other is ‘The Four E’s of Leadership’.
What intrigued me and stays with me to this day is his philosophy of, “To be the best you have to surround yourself with the best people.” I think that is exactly what we have here at Med-X. Matthew Mills, our COO, surrounds himself with the best people in their areas of expertise. I do the same with the people we have here working on my side. It really makes for a solid organization. Having the energy and ability to energize people gives you the extra edge that allows you to take your company to the next level.
Tell us about a personal achievement you are very proud of.
I’m very proud of what I was able to accomplish with the company I worked with after I left the startup company in Silicon Valley I mentioned previously. I became CFO of a private company and took the company through the IPO process. I wound up developing them from, sort of a startup stage, into becoming a publicly traded company who was listed on the Nasdaq.
What’s the best advice that you have received?
The best advice that I’ve received was from my mentor, the previous CFO that I had mentioned. He told me to always be honest above everything else. Don’t be afraid to give your opinion. However, when you give your opinion, be ready to offer a solution as well. An opinion without a solution is just a complaint. If you offer a solution to fix the problem, then you are moving the ball forward.
I think being the first cannabis related company to get Reg A approval by the SEC could make us as a leader in the industry.
As far as advice I give to people, be honest and transparent when you’re talking to people. Don’t sugar coat things. The last thing you want to do is set expectations that aren’t really accurate. It’s like I used to tell my kids when they were growing up, “if you do something wrong, admit it.” Don’t lie about it, ’cause the punishment’s going to be worse than it would have been because you lied about it.’
What is on the horizon for Med-X?
Progress. We want to progress the company on to the next level. Part of that is getting through the Reg A filing situation with the SEC, but also, the ability to start doing some of the extraction and development of CBD oils. We want to start looking at the medicinal impact that Med-X could have in that space. We are working to get all that structured and in place, conducting the proper testing and developing the strain or strains that we will use.
Having the energy and ability to energize people gives you the extra edge that allows you to take your company to the next level.
It will be an organic product, of course, as we don’t treat the plant with toxic insecticides or pesticides. We use our all-natural Nature-Cide product to control insect infestation, as well as other associated issues.
We are also excited about our patent-pending insecticidal soil that we have developed. We want cultivators to be able to grow their plants in an environment that’s going to be safe, right from the start. We are very excited about this new project because we see it as an enormous market in the industry. Everyone needs soil to cultivate their crop; we want to make sure that soil is as natural as can be.
Let’s say we’re sitting across from each other a year from now. What do you think we’re going to be talking about as it pertains to the cannabis industry?
A year from now I am hopeful that we get more clarification as to the Schedule 1 versus Schedule 2 or 3 status of cannabis. Additionally, I hope that the banking problem is a little bit more feasible. For Med-X, we will be talking about our next big project, which could mean getting into cultivation while continuing our work on the extraction process of CBD oils. Our goal is to develop different strains that are geared towards the high CBD, low THC levels.
Anything else you would like to share with our readers?
We are at the ground floor of a billion, maybe even trillion, dollar industry. As we grow, we can have a positive impact on not only the environment but also the individual consumer and their use of cannabis. These are definitely exciting times and we are looking forward to the positive developments that lay ahead of us.
What do you think about Med-X’s accepted filing with the SEC? How do you think that helps to legitimize the cannabis industry? Join the conversation and comment below!
