(Tom Williams/Getty Images) |
Some say it's high time for a change |
|
|
I upvote, therefore I am. Philosophers are researching modern morality by studying Reddit's "Am I the A-hole" forum. If only Descartes were around to chime in. Stocks didn't budge much yesterday after the Fed kept interest rates steady. But traders seemed heartened after J. Powell said the central bank likely wouldn't hike rates at its next meeting. Today investors have eyes on earnings from Apple and Big Oil. |
|
|
Grass gets greener… In a seismic shift for US cannabis policy, the Biden admin this week began the process of loosening restrictions on marijuana. Under the proposal, pot would become a Schedule III drug (on par with anabolic steroids). It's been classified as a Schedule I drug (on par with heroin) since 1970. Although the move wouldn't amount to decriminalization, cannabis-related stocks and ETFs soared on the news as investors bet it could reignite the beleaguered $35B industry. |
- Write-off: Moving to Schedule III will pull canna-businesses out of a section of tax code that bars them from writing off things like rent and salaries, a potentially massive tax cut.
- Smoke test: Reclassifying cannabis would make it easier for researchers to further study its health effects and pharma applications.
- Nug #s: Medical or recreational weed use is now legal in 38 states and Washington, DC. But the cannabis industry is still waiting for federal decriminalization.
|
Weed needed a hit… Despite pot's slow 'n' steady legalization spread, the industry's fallen on dank times. The state-by-state legal hodgepodge has made it hard for Canadian pot biggies like Tilray and Canopy to plant roots in the US (and for American canna-companies it's been a buzzkill to even get listed on US exchanges). A day before the reclassification news, MedMen, previously a pot unicorn (valued at $3B in 2018), filed for bankruptcy. Last year, Mastercard cracked down on the use of its debit cards as payment for weed products. Venture cannabis investment was just $550M last year, down 80% from 2021. |
|
|
There's still a lot to hash out… Reclassification isn't legalization, and doesn't solve the cannabis industry's biggest problems. Just a fraction of financial institutions (fewer than 700) do business with weed companies because of the drug's illegal federal status, and experts say moving from Schedule I to III won't change that. Getting small-business loans will still be similarly difficult. |
|
|
Whole Foods vibes… for Great Value prices. Walmart's dropping its largest private store brand in two decades. The label, Bettergoods, will feature products like cardamom rose raspberry jam, curry-chicken empanadas, oat-milk ice cream, and hot honey seasoning. Walmart said it plans to add 300+ Bettergoods items to its shelves this year, and most will cost under $5. Walmart is already America's largest grocer, and it said that its store brands are growing across all demographics (especially Gen Z). |
- Generics giant: Bettergoods will join Walmart's other private labels, including its popular Great Value line. At Walmart's Sam's Club, private labels drive 30% of sales.
- Coupon clip: Walmart and other low-priced grocery chains like Aldi and Trader Joe's have benefited as shoppers opt for budget-friendly purchases.
|
Retail's private-label push… Higher-income customers have been moving to discount retailers as inflation hikes the prices of weekly grocery runs. Recent data showed households making $100K to $150K were Walmart's second-largest group of shoppers last year. As more folks trade down, retailers are adding more-affordable store brands to keep carts full. Kroger said it plans to release 800+ new private-label products this year. And last month Target launched a toy label, adding to its store brands like Dealworthy and Up&Up. |
|
|
Brand-agnostic is in… Shoppers are trading down from price-hiked brand names like Pepsi and Kraft Heinz (which both recently reported slipping US sales) and leaning toward store brands. With private labels, grocery retailers can cater to a variety of shoppers and boost loyalty with products that can only be found at their stores (think: TJ's seasonings). |
|
|
- GPYes: Garmin stock neared a record after its Q1 sales surged 20%, fueled by its fitness-tracker unit, which jumped 40%. While Apple leads wearables, Garmin's gained wrist real estate with athletes.
- Fried: Yum Brands' quarterly sales fell 3% as appetite for KFC and Pizza Hut fizzled, though Taco Bell grew. Rival McDonald's also disappointed as Middle East tensions ate into international sales.
- PayOut: Johnson & Johnson offered to pay $6.5B over 25 years to settle thousands of lawsuits claiming its talc products caused cancer (which J&J denies). J&J stopped selling talc baby powder last year.
- Sneeze: CVS stock dropped 17% yesterday after the pharmacy chain reported bummer earnings and slashed its annual forecast. CVS blamed spiking medical costs, which have been plaguing insurers like UnitedHealth.
- Ketchdown: Kraft Heinz's sales slumped last quarter after customers refused to stomach higher prices. The mac-maker said its price hikes pay for costlier ingredients, though it's been accused of "greedflation."
|
|
| - Weekly jobless claims
- Earnings expected from Apple, US Steel, Kellanova, Amgen, Shell, ConocoPhillips, Cigna, and Wendy's
|
Authors of this Snacks own shares of: Apple, CVS, Kraft Heinz, Reddit, and Walmart |
|
|
Sherwood Media, LLC produces fresh and unique perspectives on topical financial news and is a fully owned subsidiary of Robinhood Markets, Inc., and any views expressed here do not necessarily reflect the views of any other Robinhood affiliate... See more |
|
|
|
