The Best One Yet - 🍩 “CBDonuts” — Krispy Kreme’s IPO. Cannabis’ Either/Or. Lyft’s Millennial inflation.

Episode Date: June 2, 2021

Krispy Kreme just had its best year ever, so it’s IPOin’g with “Hot Light Theaters” and “glaze waterfalls” (their beautiful words, not ours). Earth’s biggest cannabis company, Canopy Growth, fell 7%, but it’s finally thinking beyond the flower. And yes, your weekend summer kick-off Lyft ride was 37% more expensive… and you can blame Millennial Inflation for the $$$ Uber.$DNUT $CGC $LYFT $UBER $DKNGGot a SnackFact? Tweet it @RobinhoodSnacks @JackKramer @NickOfNewYorkWant a shoutout on the pod? Fill out this form:https://forms.gle/KhUAo31xmkSdeynD9Got a SnackFact for the pod? We got a form for that too:https://docs.google.com/forms/d/e/1FAIpQLSe64VKtvMNDPGSncHDRF07W34cPMDO3N8Y4DpmNP_kweC58tw/viewformLearn more about your ad choices. Visit podcastchoices.com/adchoices Hosted on Acast. See acast.com/privacy for more information.

This is Nick. This is Jack. And this is Snacks Daily. It is Wednesday, June 2nd, Jack. Welcome, everybody. I have great news. It's already Wednesday. Jack, two days ago, I was milking a goat.

Goat-based milk. That's fantastic. It's true. Maybe better than oat-based milk. Two different things. If you had said the word almond, they would have kicked you off that ranch. No, the sheep get offended by that. They're goatly fans over there.

By the way, this pod's our best one yet. This is the TBLO-W. For our first story, canopy growth is the biggest cannabis company on Earth. That is. And they're loving their new Martha Stewart branded CBD line. All right, but here's what Jack and I thinking. They're facing an existential either or future. That's the problem.

For our second story, Krispy Cream just glazed their IPO paper. Technically, yeah. So, by the way, this is their second time going public jack. Is this considered a double dipping? You dip it once and you're done with it. Third and final story, what do we got, Jack? Memorial Day weekend, you took a ferry, must be nice. Very nice.

But that lift ride from the ferry to the house, it felt more expensive, didn't it? It did. Snackers, welcome to your first taste of millennial inflation. But snackers, before we hit those three fantastic stories. Wonderful mix today, Jack. I love this mix. There's regular online dating. Yeah, there is. You know, regular dating. Two people meet. Those two people date. Then it continues from there. Then there's meme dating.

Mem dating. New thing, Snackers. New thing Jack and I noticed in India. It's an app called schmooze. Side note, yes. I know the greatest schmoozer of all time. Is it our buddy, Timmy? Who are you thinking over this? I'm thinking to Shane. Shane is a schmoozer. It's a great name for an app. Shmooze. Great name for an app. But here's the thing. You swipe right or you swipe left, but not on a profile picture. You swipe on a meme. This app will find your future Mr. and Mrs. Wright based on shared appreciation for trending internet humor. I mean, Jack, can we whip up some examples here? Case and point. Jack, you both like sad Keanu memes? That's a match, Nick. Jack, you both scared of the disaster girl

meme. That is love. That's a match. Jack, you both loved all 100 versions of that Anakin Skywalker Padmey meme from last week. You know what we're talking about? I saw like 72 of them. That's definitely a match. Yeah, Jack, how about crying Michael Jordan? Bernie Sanders midden's success kid memes? Match, match, match.

So, Jack, what's the takeaway for our buddies who are meme dating over on the new meme date app? Bumble's algorithm will help you find love. But humor is the original love algorithm. Any baby Yoda meet would agree with that. Let's in our three stories. in the snacks daily. We spoke to the lawyers and we got to get something legal out the way. The snacks about the hearing food is air candy. They don't reflect the views of the robberhood family. It's all informational just so. We're not recommending any securities. It's not a research report or

investment advice. Not an offer or sale of a security. Right. Snacks is digestible. Business news for you. Robohood Financial, LLC, member FINRA slash SIPC. For our first story, can it be growth fell 7% yesterday. This is the world's most valuable publicly traded cannabis company. Yes, it is. And they're facing a classic either or future. This is classic. Jack, pop music. I need one word. What are you going with? Bieber. Jack, hockey. I need a name. What are you going with? Gretzky. Jack, legitimate cannabis enterprise. I need a name. What are you going to give me? Canopy growth. I'm sorry, Toronto. Hold my Shopify. Canada is number one in each. Baby. We didn't even mention Drake, Nick. By the way, I hear he's a big snacker. Canopy growth got the coveted

ticker symbol weed up in Canada, although their ticker symbol is something else down here in the States. It's a very mature management team and revenue there grew by 37% over the last year. Unfortunately, for this big weed company, they lost $1.7 billion last year. Yes, they did, but profits, they said, are coming next year. You got a way to year. You just got a way to year. I'm going to start my diet tomorrow. Okay. So Jack and I jumped in. snacks out to the last earnings. Notice they claim they were number one for market chair of the flower category in Canada. Because as a reminder, cannabis is a flower. That's right. The marijuana business

is run by florists. That's who's selling your stuff. In fact, the best rebranding in cannabis and marijuana may be just to call everyone florists. For instance, they took green kush and sour kush. Those are premium strains that canopy growth uses. And they turned those into something called tweed and simple stash, which are premium marijuana brands. Those are just two. Canopy has 13 other premium cannabis brands that they sell products out there. But here's what Jack and I find so fascinating about canopy growth right now. They're finally focusing beyond the flour. They're trying to be like the general mills, but of cannabis.

I mean, you've heard of big food. This is big bonn. Canopy growth clearly states four major differentiated product segments. Yeah, you got to go in deeper. And apparently they've got flowers, but they've also got the vape oils, the edibles, the beverages. Those are the four. But there's a fifth that they're way too modest about.

They call it other consumer products, and that grew fastest at 66% growth from last year. Worst name for a segment ever. This includes CBD-infused creams and lotions and also vaporizers to vaporize the oil plus accessories. So what we're trying to say is the stuff that people are actually using in most places is just thrown into this other consumer products category. So speaking from south of the border here in Vermont, Nick. Very close to border.

I have to talk about Martha Stewart's branded sales. CBD gums and soft gels produced by canopy, they're already a top 10 cell. Okay, when are they going to come out with like the CBD-plated Lucrucette sauce plan? That feels like the next thing on a wedding register. North of the border are friendly neighbors up north. They just launched a new raspberry iced tea with THC, which is like the hardcore part of the cannabis plan. This isn't an Arnold partner.

This is an aggressive Palmer. With five major product categories, canopy is showing Wall Street. It can become big green like General Mills has become big food. So, Jack, what's the takeaway for our buddies over at Canopy Growth Cannabis? They're facing an either or future. Yeah, Snackers, Canopies 37% growth last quarter, not reflective of a supposedly booming industry like cannabis. You would have expected more.

Canopies value is in its potential because if America decriminalizes cannabis nationwide, canopy can capitalize big. Jack, can you take me back to sports betting, Draft Kings 2018? Back then, sports betting had huge potential. So if only the American states would legalize it. Boom, the states legalized it after the ban ended in 2018. And now, Draft Kings is worth 20 times more than it was just three years ago. That could be the path that canopy follows as legalization of cannabis happens across the United States.

Or it could turn out a little different and look a little bit more like driverless cars. Self-driving car companies have been talking for years about the self-driving car proliferation in the United States. hasn't worked out the laws and the technology not quite there yet. So Canopy and other cannabis companies, they could either follow sports betting to fortunes. Yeah, they could. Or follow self-driving cars to disappoint. It's the either-or situation. For our second story, Krispy Kreme, it is going public again.

Yes, they filed their IPO paperwork, but don't call this a donut shop, Nick. Okay, Jack. First of all, lovely memory with my mom, like the age of 8, going down on the subway to the first Krispy Kreme Manhattan on 23rd Street and then not having enough money to like make it back up to our apartment. Funny you mentioned Manhattan because these donuts were invented in Winston-Salem, North Carolina, as different from Manhattan as humanly possible. We literally spent all the cash on the donut. Founded in 1937, Krispy Cream went public via an IPO in the year 2000.

And then it kind of went downhill from there, Jack. Yeah, they went bankrupt in 2005. But they got acquired in 2016. So they've been around the block. By a mysterious German coffee lover called Jab, Jab, JAB, JAB, that is a private equity firm that really just likes coffee. But now Jab is flipping Krispy Cream back to public markets and hoping to make a profit off those five years that they owned the company.

Okay, so Jack and I were hungry. We jumped in snack style. Notice that sales grew 17% for Krispy Cream last year to a whopping $1.1 billion at 8,000 locations, not too shabby. But losses for Krispy Cream doubled to $60 million. They're not making a profit because Crispy spending all this money on a quote-unquote transformation. Now, I don't know if we've said this one time or two times, Jack, maybe three times. Retail's not dead.

Bad retail's dead. And the same thing applies for food retail. Snackers, we control-fed this IPO paper. Aggressively. And we found the word theater 94 times. Weird. But then we noticed that each and every one of those 94-time theater was mentioned, it was preceded by the words hot light.

That's right. So first of all, some shock here that they even mentioned the word theater once in the IPO paperwork, impressed that they have a thing called hot light theater. Hot light theater is a new store concept for Krispy Kreme that is shooting for experiential retail. All right, here's how this breaks down. They have these hot now signs outside of the Krispy Kreme locations that they light up when the donuts are like just finished. So you're driving down like the sunset highway.

You're going home. You got plans. And suddenly that hot now light lights up and you're like, like you pull in. You got to get those hot baked, perfectly done donuts. I pulled over. Sir, he can't pull over anymore. It's like, honey, we have plants.

The donuts are hot. You peek behind the counter at a crispy cream. There's a glazed waterfall and you've got a swimsuit for one. You peek behind a Dunkin donut counter. You're seeing Dahlin pumping hazelnine. I'm sorry, but darling, that's the reality of the situation. And the start of this experiential. food retail experience is the ultimate profit puppy, the donut. And there's a reason why Jack and I

are calling this the ultimate profit puppy, because first of all, we notice that donuts get exponential marketing. According to Krispy Kreme's IPO paperwork, 75% of their sales come in a sharing quantity of like a dozen because you're bringing them to other people. I mean, Jack, you think back about every time you've had Krispy Kremes. It was in a consumer pitching and feeding you that Krispy Kreme donut situation. It's someone's birthday party at work. It's a baseball game. Which then leads to why we also think it's the ultimate profit puppy because donuts have the ultimate positivity association. Again, these donuts are Krispy Kreme. They're being eaten at nice events with friends like weddings, birthday parties, the hockey game.

You can't talk about Krispy right now without mentioning that they gave away 1.5 million donuts to people who have been vaccinated. Yeah, to people who've proven their vaccinations. And guess what? Those free donuts got posted online generating $7.6 billion of free marketing via social. social media earned media. And considering each donut, cost about 10 cents to make, feels like the ultimate profit puppy. Genius marketing. So, Jack, what's the takeaway for our buddies dripping over Krispy Kreme?

Indulgence beats habits. Snackers, you'd think that every single dieting, health, and wellness, gluten-hating trend wouldn't help Krispy Kreme. You'd think people wouldn't be celebrating with a dozen donuts with their buddies in the socially distanced year of the pandemic. But you'd be wrong. Both. Crispy Cream calls themselves an affordable indulgence for a reason.

And here's what's so fascinating about that. Indulging, it isn't cyclical. It's not like travel. It's not like a luxury handbag industry. Good times, bad times, rich, poor. Humans indulge. It transcends culture, incomes, and tastes. And that's why Krispy Cream's $1.1 billion in sales last year that we just mentioned,

that was actually their all-time record for annual sales. By making an indulgence affordable, Krispy Cream can defy those dieting megatrends, we mentioned. And its stock is. is set to trade publicly, probably in about one to two months. For our third and final story, Snackers, it's not just you. Uber and Lyft rides, they are more expensive right now. We're calling it millennial inflation. Now, Jack, get around, get around, to quote the Beach Boys, I get around.

Yes, yes, we all do. And if you're one of the three and a half million Americans who flew this Memorial Day weekend, there's a good chance you took an Uber left to and from the hotel. And you know what you do. I mean, Jack, you take out your phone. You open both apps. You shuffle back and forth between them. And you notice it's $27 to LaGuardia on Uber, $29 on Lyft.

But this weekend, it was a little different. You spat out your contraband salted peanuts when price comparison shopping because it was $45 and $50 instead. Boom. We mentioned a month ago this might happen while Uber and Lyft have both confirmed that prices for rides are way up from last year. They won't say how much, but some fantastic reporting from the new. New York Times says it's 37% more expensive for an Uber and Lyft ride on average compared to last year. Now, Jack, everyone's talking like inflation these days, inflation, inflation, inflation. The Godzilla stuff.

This is where it's actually easy and you can clearly see and feel the higher prices. I mean, your dad talks about inflation. They're talking like loaf of bread, lumber, truck prices. I mean, who cares? Why do they always include a loaf of bread? It should be like an app download. That should be like in the basket of things that they measure. Prices for Uber and Lyft, they are higher, and this is specifically an example of inflation.

That's why we call prices of Uber and Lyft rides millennial inflation. And pretty clear reason here, it's caused by riders flooding back into the ride hail apps. Drivers, though, not so much coming back quickly. The result is basically a constant state of surge pricing on these apps because the algorithms jack up the price in an attempt to balance supply and demand. So some riders decide to walk instead. Some drivers decide to pause the next. Netflix, jump in the car and drive instead. And those countering forces create a price equilibrium. But funny thing, Jack, and I noticed about this millennial inflation, ride inflation situation,

it kind of solves Uber's biggest PR problem. Yeah, there's a constant negative narrative when it comes to Uber and Lyft that their independent contractor business model abuses the workforce. Boom, now drivers are in such high demand. They're getting up to 50% more money per hour. Instead of being thrilled that they're big. most thorny PR issue has been solved. Thought they'd be happy.

Uber and Lyft are kind of terrified about this. Yeah, they are. Because you know what? It's not sustainable, which leads to our takeaway. Jack, what's the takeaway for our buddies over at Lyft and Uber? Consumers practice natural selection. They adapt to survive. Snackers, every time we complain about Uber prices,

we are one step closer to buying a car instead. Each time your ETA for your Uber driver to arrive is 19 minutes, you think about taking the bus and subway again instead. Jack, surge pricing literally caused Molly and me to do airport parking. Never had done airport parking before. Full disclosure. You grabbed one of those tickets from the machine and you put it under your visor. I had to click it like six times.

I lost it. I had to remember the spot. It was like F6 over at SFO. You went three floors underground to finally find an empty parking spot. It actually was kind of stressful. But it was cheaper than Uber or Lyft. Uber and Lyft have been fighting for years to earn your transportation routine, whether that's your routine for going out, for going to the airport,

or commuting to work. So the higher prices for drivers, that's great. And Uber's getting a bigger cut of the fare too seemed nice. But sustained higher fares for Uber and Lyft, that risks consumers adapting to a different mode of transportation instead. Yeah, because if your lifting routine becomes too expensive, then you're going to pick a whole new transport routine. That's why instead of celebrating these developments,

Uber and Lyft are reacting with incentives to desperately try to bring more drivers and to lower prices. They're trying to adapt to the driver's shortage before. consumers do. Jack, can you whip up the takeaways for us over there? Canopy growth is the most valuable cannabis stock. And they can either blow up like sports betting or disappoint like self-driving cars. For a second story, we thought Krispy Kreme had the simplest business model ever.

Bake donuts, sell donuts. Instead, we learned that affordable indulgences, that beats habits. Uber and Lyft prices are rising, something we call millennial inflation. Uber and Lyft, they want that to stop before you adapt. They're really scared. you're going to adapt. Now, time for our snack fact of the day. This one sent in by Stephen Liu from down the street in lovely San Francisco. Ford Motor Company, the Ford Motor Company, actually has a shareholder discount. Which the best part about this might be the name. They call it X plan. If you own stock

of Ford and you've held stock of Ford for at least six months, you can get a discount on an eligible brand new Ford car. Now, it's not that much from what we understand, but it is something. Be cream, we hope you're listening. Yes, we do. One cent off a donut would be pretty nice for eligible crispy cream shareholders. Terms and conditions apply. Snackers, you look fantastic today. Jack, I feel like I should clarify that the goat milking was a weekend activity thing and not part of my daily routine. Sure, that was your Memorial Day weekend thing. Should you do this tomorrow? I'll be here. Let's do it. Say that. And before we go, congrats to Alan Gabrile, who was returning home to Massachusetts after being in Europe for 18 months away from his family.

because of COVID. Welcome back. And Milo X, happy day of birth born in Portland, aka Rip City. Congrats to Matt and Rose, who just got engaged in Arlington, Virginia. Let's see some ring picks. And George and Alexis, congrats on the third anniversary down in San Antonio. And two Cal Berkeley Golden Bears, Paige and Joe, just got engaged. Love two bears together. Allie and Tim Hamilton, congrats on the anniversary over in Columbus, Ohio. And Russell Ujjay is graduating in Fresno, California. And Evan and Adolfia, second wedding anniversary. Can't beat it. down in Miami. Happy birthday to Joseph Runcic in Clarksville, Tennessee. And to Laura Dawkins in Maplewood, New Jersey. And happy birthday to Pramad Molina and sunny Redondo Beach, California.

And to Cesar in Rochester, Minnesota. And Matt is celebrating a seven-year work anniversary in... Jack, don't tell me where. Don't tell me where. Don't tell me where. Logistics. In Chicago. This is Jack. I own stock of Bumble. Nick owns stock of Shopify. The Robin Hood Snacks podcast you just heard reflects the opinions of only the hosts who are Associated Persons of Robin Hood Financial LLC and does not reflect the views of Robin Hood Markets, Inc. or any of its subsidiaries or affiliates. The podcast is for informational purposes only and is not intended to serve as a recommendation to buy or sell any security and is not an offer or sale of a security. The podcast is also not a research report and is not intended to serve as the basis of any

investment decision. Robin Hood Financial LLC, member FINRA, SIPC. I pulled over, sir, he can't pull over anymore.