__Someone got Smirnoff Ice'd...__ and it's __[Brown-Forman](https://www.robinhood.com/stocks/BF.B)__. Sales for the liquor legend behind Jack Daniel's only rose 1% last quarter, but would've jumped 5%. It's blaming European tariffs on its booze:
- __1st punch:__ The US slapped tariffs on steel and aluminum that Americans buy from Europe.
- __Retaliatory punch back:__ Europe threw tariffs on pure Americana: Harley-Davidson, Levi's, and Jack Daniel's — That [made](https://www.reuters.com/article/usa-trade-europe/update-3-europe-targets-u-s-bourbon-bikes-blue-jeans-for-trade-riposte-idUSL8N1QK2SZ) $3.5B/year worth of US goods 25% more expensive in Europe.

__Jack can't afford another round...__ Yesterday, we learned the price tag of these tariffs in dollars for Brown-Forman:
- A hefty __60%__ of the American whiskey that Europe imports [is](https://www.wsj.com/articles/tariff-fights-are-a-drag-for-maker-of-jack-daniels-11559763689) Brown-Forman’s (Old Forester. Woodford Reserve. It's got a lot of bourbon brands).
- The company has __lost $125M__ in potential sales.
- And the CEO is taking it personally: “We view these tariffs as a targeted campaign against Brown-Forman.” *That's because they are.*


__Tequila was the savior — Now it's not...__ Tequila's only 3% of Brown-Forman's sales so far, but the Herradura and el Jimador brands are growing fast (sales were up 13% last quarter). But Agave prices have surged by 7X as supplies are ([barely](https://www.courier-journal.com/story/news/local/2019/06/05/brown-forman-estimates-annual-retaliatory-tariffs-to-cost-125-million/1352410001/)) keeping up with tequila demand. And just as Brown-Forman's leaning on its south-of-the-border spirits, new tariffs on Mexico are scheduled to arrive this weekend.

Jack Daniel's owner revealed it’s losing $125M because of tariffs 

__If anyone believes these two should not be wed...__ please speak now. __[Fiat Chrysler](https://robinhood.com/stocks/FCAU)__ spoke. About itself. The car-glomerate left Europe's __Renault__ on the altar, withdrawing the $40B merger offer it had announced just two weeks ago. Here's the strange family background behind the deal:

- The __French government__ is Renault's biggest shareholder.
- Renault also has a __loooong relationship with Japan's Nissan__, which it owns 43% of (and Nissan incestuously owns 15% of Renault).
- Fiat Chrysler is __part Italian, part American__, with a dozen brands including Alfa Romeo, Jeep, and Ram. 

__Straight up family drama...__ All those underlying relationships created tension — And within just a few days, a series of events broke up the wedding while the prenup was still getting signed:

- French officials went into a __"[marathon](https://www.wsj.com/articles/fiat-chrysler-withdraws-merger-offer-for-renault-11559773129) board meeting"__ to discuss the deal Wednesday.
- __Their main focus:__ Don't let the deal affect Renault's special relationship with Nissan.
- Then Nissan indicated it __may end its relationship__ with Renault if the deal went through, feeling betrayed it hadn't been consulted before the deal offer became public.
- So __France asked to delay__ the vote on the merger — That's when Fiat Chrysler withdrew its proposal.

Break-ups

__This reflects Europe's national divides...__ With dozens of brands, Europe's carmakers are constantly competing with each other. Alliances or mergers could save money and boost efficiency so that everybody wins — Fiat Chrysler thought committing to Renault would be "transformational" to take on Germany's __[Volkswagen](https://www.robinhood.com/stocks/VWAGY)__. But now it's back to national rivalries.

That huge Fiat Chrysler / Renault merger is off because of family drama

__Extra green vibes...__ Last year Canadian cannabis icon __[Cronos](https://www.robinhood.com/stocks/CRON)__ was the first "pure play" pot stock to list on an American exchange. On Wednesday, its shares enjoyed a mellow 11% lifting sensation.

- __Cause:__ CEO Mike Gorenstein said his company will be "aggressive" with its CBD expansion to the United States, expected [this year](https://markets.businessinsider.com/news/stocks/weed-stocks-cronos-plans-us-cbd-market-entry-2019-6-1028257779).
- __Effect:__ Bank of America's analyst who covers Cronos upgraded the stock by two notches, from "Underperform" to "Buy". 

__Cronos is hungry for USA...__ Currently, 99.6% of its sales are in Canada, where recreational Cannabis was legalized last fall. The US is still working on that, but CBD (cannabidiol, which delivers weed's "chill" effect without the "whoa") [looks](https://www.nytimes.com/2019/05/06/us/cbd-cannabis-marijuana-hemp.html) like it's on the faster track to legalization. The [TSA](https://news3lv.com/news/local/tsa-to-allow-some-travelers-to-fly-with-cbd-hemp-products) is letting some passengers fly with it, and the [FDA](https://www.upi.com/Top_News/US/2019/06/04/FDA-hearing-leaves-CBD-industry-concerned-about-future/7011559600121/) is holding hearings on its medical benefits.

Impressed

__Altria + Cronos = Big Corporate + Weed Dealer...__ The analyst highlighted Cronos' 45% owner: American tobacco giant __[Altria](https://www.robinhood.com/stocks/MO)__. Altria's access to 230K US stores (Altria already sells cigarettes in them) is key for Cronos to get to US customers before the competition. PS: Cronos' weed brands are compelling — look at this [slide deck](https://ir.thecronosgroup.com/static-files/d02a0916-b7d5-4120-8e51-49e1419f5891), page #8: 

- __"Spinach"__ is Cronos' recreational marijuana brand, offering "Farm-To-Bowl" for "consumers that don't take life too seriously."
- __"Cove"__ is for "premium weed customers... focused on every detail of the process." The stuff is "hand-trimmed."

Jack Daniel's owner revealed it’s losing $125M because of tariffs

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