Meet Your New Budtender

Quote of the Day

Alexa’s not sure what her mother tongue will be in ten years’ time.”

Market Snapshot

• The S&P and Nasdaq hit records on the year’s first day of trading.
• Netflix jumped 4.7% after an upgrade from Macquarie.
• Freezing temperatures drove up demand for natural gas across the country.
• Oil eased up on the gas after initially rallying to a three-year high.

Marijuana Gets the Green Light in California

Reefer. Mary Jane. Devil’s Lettuce. Doesn’t matter how you say it, you can now legally buy recreational marijuana in California (although you could acquire it for medicinal purposes since 1996).

As a result of a 57% to 43% vote in Nov. 2016, California became the eighth state to legalize the drug, joining Colorado, Washington, Alaska, Oregon, Nevada, Maine, and Massachusetts (in that general order).

But this time...things feel different. And not just because the special gummy bear you popped has you contemplating the sheer profundity of the universe.

California is a massive market for pot

Some say the largest in the world. And the state, boasting the globe’s sixth largest economy, isn’t just a major consumer of marijuana, it’s the country’s No. 1 producer as well. The Golden State grew 13.5 million pounds in 2016 (try weighing that out on a scale)...5x more than it used.

The ultimate goal is to build out an industry worth $7 billion, a large chunk of which California hopes to see in its coffers through heavy taxation. In certain cities, you could be forking over an additional 45% to your friendly neighborhood “budtender.”

But to actually see green, California’s kosher weed community will need to win converts from a blistering black market. Of those 13.5 million pounds produced, 80% was exported to other states...illegally. Those taxes? Not gonna help shift the balance.

And the buzzkills keep coming

When legal weed went live on January 1, only 90 businesses had licenses to sell, although that number is expected to ramp up. And some large cities (Fresno, Pasadena, Anaheim) are completely passing on non-medicinal marijuana.

Officials might be studying reports out of Colorado, which began selling legal pot in 2014. There, ER visits related to marijuana increased 35% from 2013-2016, and drivers testing positive for weed jumped over 100%.

So for California to realize the industry’s (substantial) potential, it’ll need to proceed with caution.

Bitcoin Takes Another Hit(man)

Bitcoin cured its New Year’s hangover after it was revealed that Peter Thiel’s Founders Fund invested millions of dollars in the cryptocurrency.

But while Thiel’s getting in...

…some of Bitcoin’s earliest adopters—criminals—are getting out. A mainstay in the community of ne’er-do-wells, Bitcoin is getting cut out as those of the seedy persuasion move to newer breeds of privacy coins. And we were wondering why the grocery store side-eyed our Zcash.

Outlaws are putting their sticky fingers all over another cryptocurrency—Monero, specifically—because of how easy it is for Bitcoin to blow their cover. Bitcoin meticulously tracks every address associated with a transaction, including time and amount, thanks to the technology called blockchain. Some would call it evidence.

Whereas Monero’s encryption can generate a pseudo-address, maintaining the plausible deniability criminals have come to expect from their cryptocurrency.

♪ All I Do Is Weight Loss ♪

Turns out DJ Khaled has been grunting this whole time because he was overweight—but not for long.

The hip-hop artist is taking a break from burritos and becoming Weight Watchers’ newest social media ambassador, showcasing his WW Freestyle weight-loss journey. A diet, we take it, which consists of a lot less freestyling and a lot more antioxidants.

The announcement sent Weight Watchers’ stock up 7%, as investors bet on a company that knows a thing or two about celebrity endorsements. Just ask Oprah—her 10% stake paid off quite nicely following her WW slogan “you get a free low-calorie lasagna!”

But unlike Oprah, you won’t see Khaled battling for TV-time with Jenny Craig. Rather, he’ll be broadcasting his progress to his fan-crazed social media following.

Twitter? 3.92 million followers. Snap? 3-4 million views per Snap. Instagram? 8.9 million followers. And with any luck, he’ll help put the weight-loss program in front of a larger larger-male demographic.

Khaled’s already “down 20 pounds and ready for more.” Will you join him and WW in the new year?

Bullish on Bullions

Investors are Scrooge McDuck-diving into piles of gold, leading to the bullion’s best run since 2011. And savvy business newsletters are taking notice.

That’s because this 8-day run comes on the heels of events that should have knocked the wind outta this safe haven’s sails. As evidence, we present you with the year in review:

* Three interest rate hikes—higher rates typically drive investment dollars towards bonds.
* Stock market stardom—the Dow (up 28%), S&P (up 20%), Nasdaq (up 28%).
* A brand new tax cut—better corporate earnings usually keep investors’ money in the stock market.

And did we mention gold climbed 14%? Its best yearly gain in seven years.

Well, the party looks far from over...and analysts are attributing it to one of two things: 1) skepticism about future U.S. rate hikes and 2) geopolitical and economic uncertainty.

Let’s hope it’s the former.

What Else Is Happening…

• In 2017, Amazon (+1.67%) shipped 5 billion items through its Prime service.
• Vice Media suspended two executives on allegations of sexual harassment.
• BP (+0.83%) will take a one-time $1.5 billion charge from the new tax bill. Royal Dutch Shell (+1.99%) also couldn’t avoid a $2-2.5 billion hit for Q4.
• Hoda Kotb will replace Matt Lauer as co-anchor of the “Today” show on NBC.

Economic Calendar

• Monday     Earnings: No Events

                    Economic Events: No Events

• Tuesday    Earnings: No Events

                  Economic Events: PMI Manufacturing Index (+)

• Wednesday    Earnings: Rite Aid

                        Economic Events: Motor Vehicle Sales, Construction Spending

• Thursday   Earnings: Monsanto, Walgreens

                   Economic Events: Jobless Claims, PMI Services Index, Chain Store Sales

• Friday       Earnings: Constellation Brands

                 Economic Events: Employment Situation, International Trade, Factory Orders

Hi, I'm New Here

Hi there, Brew Community! (Brewmmunity? Brewnity? Combrewnity? I’ll keep workshopping a portmanteau). I’m Nikki, the brand new content writer here at Morning Brew. I’m thrilled to be starting 2018 with everyone at the Brewery—and all of you!

A little about me

My birthday is next week (no reason I’m mentioning it), I enjoy long legs on the beach, and when I’m not nose-deep in business news, I write comedy. Sometimes, it’s hard to tell the difference—because my sense of humor is very market-driven.

And, a little more about me

I’m originally from New Jersey and sometimes fluent in Italian. (These two things are not mutually exclusive.) And I once walked the 32-mile perimeter of Manhattan—for fun.

Now, I’d love to learn a little bit about you! Reach out and tell me anything you want: your favorite thing you read last year, how you like your pizza, or your top resolution for this year. I'm excited to get to know you all!

The Breakroom

Question of the Day

Question: Your favorite chocolate bar is having a special promotion, buy 10 get 1 free! To get a free bar, simply collect 10 wrappers and turn them in for 1 free bar. What fraction of a bar is each wrapper worth?

(Answer located at the bottom of newsletter)

Business Trivia

Eighteen states boosted their minimum wages in 2018. However, there are still five states that don’t have a minimum wage. Can you name them?

Hint: they’re all in the southeast

(Answer located at the bottom of newsletter)

Stat of the Day

0—Recorded deaths on commercial passenger jets in 2017, the safest year on record.

More from the community...

Yesterday, we asked whether you would invest in HQ Trivia. And although we didn’t give out any cash prizes, you voted by the thousands. Most of you thought it was a fad.

* 41.5% said they would invest
* 58.5% will pass

Best bull response

Highly engaged audience and great format for ads will drive revenue (sponsored questions, guest hosts to promote something, etc.)

Best bear response

Passing fad with no unique value prop, rampant cheating, and doesn't pay out in bitcoin!

Breakroom Answers

Question of the Day: Each wrapper is worth 1/9 of a bar. (Explannation)

Business Trivia: Alabama, Louisiana, Mississippi, South Carolina and Tennessee.