🍃 Canopy's cannabis comeback

Monday, October 12, 2020 by Robinhood Snacks | Disclosures

The Vermont woods are looking green this fall

Last Week’s Market Moves
Dow Jones
28,587 (+3.27%)
S&P 500
3,477 (+3.85%)
11,580 (+4.56%)
$11,049 (+4.51%)

Hey Snackers,

Forget RVs, hotel rooms, and tropical beaches — the most creative "work-from-anywhere" location is a ferris wheel. This Japanese "Amusement Workation" park is perfect for screaming after Zoom calls.

US stocks notched their best week in three months. The White House raised its coronavirus stimulus offer to $1.8T on Friday, nearing the $2.2T bill Democrats passed earlier. Doesn't sound like either will get green-lit soon.

On the pod: Microsoft's letting employees WFH forever. Tune into our 15-minute pod to hear what "hybrid work" means for you (and your paycheck).

1. Cannabis stocks have their best day in months on legalization-friendly news

Defining the relationship... with the law. Marijuana stocks got high last week on two hits of legalization news (sorry, had to). Aurora Cannabis shares popped 9% while Canopy Growth and Tilray surged over 24%. The pro-weed news:

  • Sen. Kamala Harris said Joe Biden would decriminalize marijuana at the federal level (if elected) during the VP debate on Wednesday.
  • Vermont Governor Phil Scott said he would let the legalization of recreational marijuana move forward in his state.

Hash out the deets... While recreational pot use is legal in 11 US states, marijuana is still an illegal Schedule I drug at the federal level, along with LSD and heroin. That's why it's basically impossible for American cannabis stocks to trade on US exchanges. Aurora, Canopy, and Tilray (which trade on US exchanges) are Canadian. Expanding the legal pot market is key to their success — especially since the past two years have been a buzz kill...

  • The late 2018 "weed bubble" has popped. Demand for weed in legalized places hasn't met hyped hopes. Pot companies over-produced and lost billions.
  • Since the 2018 highs, Aurora and Tilray shares have lost ~95% of their value and Canopy has dropped 65%.

Investors feel uncomfy in the legal gray area… Since soaring on legalization in Canada, cannabis stocks have taken a hit partly because companies haven’t DTR’d with the US government. Their illegal federal status not only complicates costs and access to capital, but also limits the size of their market. Last week’s boost suggests weed needs to become federally legit for canna-companies to reach the next level.


Channeling Jimmy Neutron... with the jeanius energy. Levi's offset corona-losses last quarter with a 52% surge in online sales. The jean legend's total sales fell 27% from last year, but it notched a profit and the stock popped on positive momentum. Also — Levi's just launched a "recommerce" site to sell your old jeans. Denim-recycling is sustainable and bankable: Levi's can cash in on the same pair of hip-huggers five times (instead of Poshmark).

Not left on read... Cloud company Twilio helps other companies talk to customers (think: text notifications, emails, support calls). Clearly, it's a good time to be in remote communications: Twilio stock jumped last week after the company raised its sales expectations for the quarter, and has nearly doubled this year on growth. But Microsoft's new calling/messaging service brings XL-sized competition. Twilio's reported $3.2B acquisition of customer data startup Segment could help it level up — just throw in a burrito to seal the deal.


Like the NBA Finals... DraftKings brought the tension. The sports betting stock had soared since September as live sports (besides Russian ping-pong) returned. But the stock dunked 20% last week on news that DraftKings is selling 16M new shares. These fresh shares dilute the value of existing stock, so stockholders will own less of the overall company. Also potential nail-biters: company insiders are cashing out on $832M of stock, and at least three NFL teams reported new COVID-19 cases last week.

Empty out the wine cellar... and throw on the "sad tunez" playlist. Santa Barbara-based Sonos got dumped by Apple. The Fruit is done selling headphones/speakers from "outsiders" like Sonos, Logitech, and Bose — Apple's going 100% DIY-audio. That kills speculation that Apple could acquire Sonos, like it snatched up Beats in 2014. Sonos stock dropped 11% last week on the breakup. Pssst: Apple's new speakers and over-the-ear headphones could show up at its big hardware event tomorrow.

What else we’re Snackin’
  • Snooze: 5 tips for building naps into a productive WFH routine without waking up groggy (don't shame the Zzzs — embrace them).
  • Feel: Tips on dealing with loneliness, from an astronaut who spent a year in space. 60% of adults report feeling isolated since March.
  • Work: 14 Slack hacks, including GIFs, reminders and color themes (adding sections to your sidebar reduces ping-anxiety from 100 to 40).
  • Chill: How to build a morning meditation practice to start your day on a healthier note (instead of doom scrolling).
  • Think: 6 lessons from Stoic philosophy to make your life better today — it's all about what you can control.
  • Focus: 4 steps to regaining focus when you’re totally stressed — our focus level tanks when we're overwhelmed.

🍪 Thanks for Snacking with us! Want to start getting Snacks daily? Sign up here for our daily market newsletter.

Snacks Daily Podcast

This year, Disney is shelling out $3B to pay its shareholders cash dividends. But one of its big investors thinks Mickey should use that money to beat Netflix with more Disney+ hits, instead.

Tune into our snackable 15-minute pod to hear why Disney+ subscribers are 1/12th as valuable as Netflix ones — and why splurging on original content could change that.

This Week

Disclosure: Authors of this Snacks own shares of Apple and Disney

ID: 1362832

Subscribe to Robinhood Snacks

Our Editorial Principles
Robinhood Financial LLC and Robinhood Crypto, LLC are wholly-owned subsidiaries of Robinhood Markets, Inc. Equities and options are offered to self-directed customers by Robinhood Financial. Robinhood Financial is a member of the Financial Industry Regulatory Authority (FINRA) and the Securities Investor Protection Corporation (SIPC), which protects securities customers of its members up to $500,000 (including $250,000 for claims for cash). Explanatory brochure available upon request or at www.sipc.org. Cryptocurrency trading is offered through an account with Robinhood Crypto. Robinhood Crypto is not a member of FINRA or SIPC. Cryptocurrencies are not stocks and your cryptocurrency investments are not protected by either FDIC or SIPC insurance.

Getting “early access” to options or Web is defined as signing up with a valid email address for a spot in Robinhood Financial’s respective waitlist queues for Web or for options. Getting “early access” to Robinhood Crypto is defined as signing up with a valid email address for a spot in Robinhood Crypto’s waitlist queue. Early access to the waitlist for Web, options, or Robinhood Crypto should in no way be construed as confirmation that a brokerage account with Robinhood Financial has been opened or will even be approved for opening. Priority may be given to Robinhood Gold subscribers and existing customers of Robinhood Financial.

Free trading of stocks and options refers to $0 commissions for Robinhood Financial self-directed individual cash or margin brokerage accounts that trade U.S. listed securities via mobile devices or Web. Relevant SEC & FINRA fees may apply. Please see the Fee Schedule.

Robinhood Financial is currently registered in the following jurisdictions. This is not an offer, solicitation of an offer, or advice to buy or sell securities, or open a brokerage account in any jurisdiction where Robinhood Financial is not registered. Additional information about your broker can be found by clicking here.

Margin trading involves interest charges and risks, including the potential to lose more than deposited or the need to deposit additional collateral in a falling market. Before using margin, customers must determine whether this type of trading strategy is right for them given their specific investment objectives, experience, risk tolerance, and financial situation. For more information please see Robinhood Financial’s Margin Disclosure Statement, Margin Agreement and FINRA Investor Information. These disclosures contain information on Robinhood Financial’s lending policies, interest charges, and the risks associated with margin accounts.

Investors should consider the investment objectives and unique risk profile of Exchange Traded Funds (ETFs) carefully before investing. ETFs are subject to risks similar to those of other diversified portfolios. Leveraged and Inverse ETFs may not be suitable for all investors and may increase exposure to volatility through the use of leverage, short sales of securities, derivatives and other complex investment strategies.

Although ETFs are designed to provide investment results that generally correspond to the performance of their respective underlying indices, they may not be able to exactly replicate the performance of the indices because of expenses and other factors. A prospectus contains this and other information about the ETF and should be read carefully before investing. Customers should obtain prospectuses from issuers and/or their third party agents who distribute and make prospectuses available for review. ETFs are required to distribute portfolio gains to shareholders at year end. These gains may be generated by portfolio rebalancing or the need to meet diversification requirements. ETF trading will also generate tax consequences. Additional regulatory guidance on Exchange Traded Products can be found by clicking here.

Options transactions may involve a high degree of risk. Please review the options disclosure document entitled the Characteristics and Risks of Standardized Options available through https://about.robinhood.com/legal or https://www.theocc.com to learn more about the risks associated with options trading.

The cash management program is expected to be offered by Robinhood Financial LLC. The cash management program, when operational, will be an added program to Robinhood brokerage accounts and will not be a separate account or a bank account. Robinhood Financial will provide additional information on the cash management program once it is operational to help customers, including those with “early access,” to determine if they want to add the program to their brokerage account.

Robinhood Snacks newsletters and podcasts reflect the opinions of only the authors who are associated persons of Robinhood Financial LLC and do not reflect the views of Robinhood Markets, Inc. or any of its subsidiaries or affiliates. They are meant for informational purposes only, are not intended to serve as a recommendation to buy or sell any security in a self-directed Robinhood account or any other account, and are not an offer or sale of a security. They are also not research reports and are not intended to serve as the basis for any investment decision. Any third-party information provided therein does not reflect the views of Robinhood Markets, Inc., Robinhood Financial LLC, or any of their subsidiaries or affiliates. All investments involve risk and the past performance of a security or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk, it does not assure a profit or protect against loss. There is always the potential of losing money when you invest in securities or other financial products. Investors should consider their investment objectives and risks carefully before investing. The price of a given security may increase or decrease based on market conditions and customers may lose money, including their original investment. Robinhood Financial LLC, member FINRA/SIPC.

Testimonials may not be representative of the experience of other customers and are not guarantees of future performance or success. Robinhood Financial LLC, member FINRA/SIPC.

Third party information provided for product features, communications, and communications emanating from social media communities, market prices, data and other information available through Robinhood Markets, Inc., Robinhood Financial LLC or Robinhood Crypto, LLC are meant for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of any financial instrument or cryptocurrency or as an official confirmation of any transaction. The information provided is not warranted as to completeness or accuracy and is subject to change without notice. Any information about Robinhood Crypto on any Robinhood website (including www.robinhood.com and blog.robinhood.com), the Robinhood platform, e-mails, or any other communications, are meant for informational purposes only and are not intended as an offer, solicitation, or advertisement for Robinhood Crypto or any goods or services offered by Robinhood Crypto. The Robinhood website provides its users links to social media sites and email. The linked social media and email messages are pre-populated. However, these messages can be deleted or edited by users, who are under no obligation to send any pre-populated messages. Any comments or statements made herein do not reflect the views of Robinhood Markets Inc., Robinhood Financial LLC, Robinhood Crypto, LLC, or any of their subsidiaries or affiliates.

Investors should be aware that system response, execution price, speed, liquidity, market data, and account access times are affected by many factors, including market volatility, size and type of order, market conditions, system performance, and other factors.

All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk it does not assure a profit, or protect against loss, in a down market. There is always the potential of losing money when you invest in securities, or other financial products. Investors should consider their investment objectives and risks carefully before investing.

Cryptocurrency is a digital representation of value that functions as a medium of exchange, a unit of account, or a store of value, but it does not have legal tender status. Cryptocurrencies are sometimes exchanged for U.S. dollars or other currencies around the world, but they are not currently backed nor supported by any government or central bank. Their value is completely derived by market forces of supply and demand, and they are more volatile than traditional currencies. Trading in cryptocurrencies comes with significant risks, including volatile market price swings or flash crashes, market manipulation, and cybersecurity risks. In addition, cryptocurrency markets and exchanges are not regulated with the same controls or customer protections available in equity, option, futures, or foreign exchange investing. Cryptocurrency trading requires knowledge of cryptocurrency markets. In attempting to profit through cryptocurrency trading, you must compete with traders worldwide. You should have appropriate knowledge and experience before engaging in substantial cryptocurrency trading. Cryptocurrency trading may not generally be appropriate, particularly with funds drawn from retirement savings, student loans, mortgages, emergency funds, or funds set aside for other purposes. Cryptocurrency trading can lead to large and immediate financial losses. Under certain market conditions, you may find it difficult or impossible to liquidate a position quickly at a reasonable price. This can occur, for example, when the market for a particular cryptocurrency suddenly drops, or if trading is halted due to recent news events, unusual trading activity, or changes in the underlying cryptocurrency system. Several federal agencies have also published advisory documents surrounding the risks of virtual currency. For more information see, the CFPB’s Consumer Advisory, the CFTC’s Customer Advisory, the SEC’s Investor Alert, and FINRA’s Investor Alert.

Robinhood Crypto, LLC has a seller of payment instruments license in Georgia, with reference number 61417.

Robinhood Crypto, LLC has a money transmitter license in New Jersey, with reference number 1803456-C22.

Please note that an Alaska money transmission license does not cover the transmission of virtual currency.

Check the background of Robinhood Financial LLC and Robinhood Securities, LLC on FINRA’s BrokerCheck.

Robinhood Terms & Conditions    Disclosure Library    Contact Us    FAQ

© 2020 Robinhood. All rights reserved.