The Best One Yet - Corona’s hard seltzer, Uber’s new Work app, and Square processes CBD payments

Episode Date: October 4, 2019

Liquor legend Constellation brands fell 6% even though it’s launching 4 flavors of a new spiked seltzer to save its beer sales. Uber unveiled a new app that’s purely focused on the gig economy — connecting workers with needs, not just drivers and delivery. And payment processor Square jumped into supporting CBD sellers because cannabis has a banking bottleneck.Learn 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. This is snacks daily this Friday, October 4th. I got good news and bad news. What's the good news? The good news, markets rose yesterday. Bad news? The bad news was because the economy is looking so bad,

analysts expect the Fed to cut interest. More good news. This is the best snacks daily episode we've ever put together. And even more good news, we got three great stories. Wonderful mix. What's number one? Square is a payment processor. It's going to start working with CBD shops so you can get your mother-in-law.

That's CBD cream she asked for. It's a weird gift, but the cannabis industry is inching toward legality with a new law that just got passed. The law is called the Safe Banking Act. Second Story Jack. Corona is owned by a company called Constellation Brands. Just announced its earnings report. The stock fell 6%. But it's jumping into Spike Seltzer in a Corona E way. Who's, is Snacks daily jumping into Spikeslitzer? Who isn't doing Spike Seltzer? Third and final story, Uber, it pretty much invented the gig economy. Now it's going back to its roots. A new purely gig economy app. But before we get into all that, we know what you're

thinking what are you going to do this weekend? You got to have a plan. Everyone needs a plan. Experiences by Airbnb. We've told you about them a couple times. Right. But it's taking things to the next level. This got freaky. Jack and I heard about this. We jumped in snack style, although we didn't technically book anything. What do we got going on? Airbnb has animal experiences. Let's give you a quick example. Pretty much means you can take your pet on vacation. It actually means nothing like that, but you could do that. You're totally free to. Airbnb has a bunch of curated experiences that you can go on, such as a tea party with sheep in London. This thing costs four $41 bucks in it got five stars.

So you're not booking an Airbnb like place to stay. You're booking a trip to have tea with sheep. Let's say the land isn't your thing and you're more of the water type. Paddleboarding with Mr. Beaches, the Corgi. Okay, so we heard this for like, who's going to be spending their vacation in Fort Lauderdale doing this? Apparently 284 people who left reviews. Yeah, pretty good reviews because you go stand up palaboardating and a little dog, a very well-trained dog who likes the water. We know them.

Stands on the front of the board. Now, corgis can do like anything. But the third one we found was like, this is when you want to get out there. Yeah, because the first two were domestic animals. Sheep and a dog? Yeah, they're kind of cool. The last one is a wild animal. You can go play with Arctic foxes in Iceland.

And this isn't a small thing. Not only do you got to get to Iceland, this is a nine-hour excursion with like only a couple other people. I hope Bear Grills is the leader of that experience. I'll do anything with Bear Grills, even if it involved that tea party with the sheep. You're tuned in the stuff. It's snacks you about the hair ain't food. It's air candy. They don't reflect the views of the rob of her family.

It's all informational just so. You know, we're not recommending any securities. Nope. It's not a research report or investment advice. Not an offer or sale of a security. Snacks is digestible. Business news for you. Robberhood Financial, LLC, member FINRA slash SIPC.

For our first story, Jack and I've been sitting here wondering for like years, who is going to do with the Uber for staffing? Yeah. It's a need. Turns out it's going to be Uber. It's Uber. It's going to be Uber doing this. Uber just came out with Uber works. Right, because you know, there's already Uber rides.

Uber eats. Uber freight. And now there's Uber Works. I feel like we're rounding out the Brady bunch here. It's for temp workers to find work. And the most famous temp worker ever. Are you thinking Ryan Howard? Ryan Howard.

Ryan Howard from the office. From the office. Makes a lot of sense. Dunder Mifflin. Now, Uber's got a situation going on right now. It's got profit problems. And it's in search of a profit puppy. Uber had an insanely huge loss last quarter.

But it needs to find a business line that's actually going to deliver profits in the short term. Uber rides and Uber rides and Uber rides. and Uber eats, it's two like biggest businesses. They're not bringing them enough revenue to cover the costs. Right. That means they're not profitable. And if this new California law that requires them to treat drivers as employees goes mainstream, we mentioned this one like a month ago.

Profitability will get even worse for Uber's core business. Because they're going to have to start paying for benefits and other things that employees get that gig workers don't. So now Uber is basically trying out a new business. All right. So if you're Uber, here's the situation. You just IPOed. You're basically like a former college student who just graduated.

waited. Yeah, you don't know what to do with your skills. So you're trying things out. Maybe you do a little delivery, you do a little taxi driving. You work at the family business for a year. You're making some money, but you're not covering your rent. You've got to figure things out. If only Uber had a better guidance counselor in high school. And that's why they're focusing on a new area that they think could become a profit puppy. It's called Uber Works. And it's pairing temporary workers with businesses that need temporary workers. Think of this as like the most purest form version of the Uber app. I downloaded the Uber Works app. Jack. jumped in snacks style. It's in the app store. It only has nine reviews, a ridiculously small number

for something Uber-made. Full disclosure, Jack's like side hustling as a painter now these days. So if you are thinking about downloading the app, it's going to walk you through, it's going to try to sell you on it. Yeah. You can find work opportunities that fit your schedule and fit your skills. Jack, this is incredible. Tell us more about what you do. And then it's got three images to like help you imagine what you might do. What are you seen here? You got a man moving chairs at an event. Sounds exciting. You got a woman boxing things in some generic wear. Sounds hard, but nice wearhouse. And then he got a guy cleaning dishes with rubber gloves on.

Smiling or you don't see faces on these? Actually, they're all vaguely smiling. Okay, that's good. They're like working a good car. If they're happy, they're happy. So like rides, like Uber rides, an algorithm is going to set the wage based on supply and demand. So if like, let's say it's holiday time and not many workers are available, the prices are going to go up to attract them into doing your gig work. The prices, of course, being dollars per hour you get.

So there's going to be surge pricing, you can make some money. Now, even though this is like a new thing for Uber, it's not. a new thing overall. Yes. Fiverr and Upwork are both publicly traded companies that do freelance work. Freelance is kind of just the more professional version of gig work, right? But here is the app that's making it possible to connect the someone with the need with the someone willing to do the work. Starts in Chicago as of yesterday. Now, I'm a little freaked out here because after each gig job, I know what you're thinking, you're going to get rated. You're going to get that five stars? Like you know, on an Uber ride, you get a five star rating? In a funny way, Jack and I also get

rated every day. Oh yeah, we do. Which, by the way, If you want to drop five stars to rate this podcast, we're more than welcome to. We would love it. In the meantime, Jack, what is the takeaway for our buddies over at Uber? This could avoid Uber's whole independent contractor problem. Remember that California law that Jack just mentioned, that's about how they're going to treat drivers as employees potentially. It's going to raise costs for workers by like 30% in Uber. But a core element for that for Uber is that its core business happens to be drivers right now.

Yes. And that is the test of the California law. For Uber work, Uber's entering a new space. It's now the pure, pure middleman. It's not just about taxi riding. Right. Remember that test? If it's the core business, then you have to treat them like employees.

No one's going to say that catering the wedding or painting the house or whatever happens on Uber work is Uber's core business. It won't have to treat those workers as a result as employees. Uber just takes a fee from the business that signs up and it's nice and clean. A potential profit puppy. For our second story, Liquor Legend Constellation Brands, its stock just fell. 6%. But it's getting into Corona Seltzer, which we're calling Corona Sprintz. He's been wanting to say that for so long. Constellation is not just a liquor company. No. A vice company. It's such a vice company.

They own Corona. Which, by the way, is like 99.9% gluten free. You're hedging yourself there, I noticed with the 0.01%. It's just, there's a smidge of gluten. There's one gluten. But it's basically a gluten free beer. It's a single gluten. They also own Robert Mundavi. Who? Yep. Robert Mondavi. is an Italian-American legend who put Napa Valley Vineyards on the map. Jack's saying that because he's part of their wine club. And they own high west whiskey and they've got Ballast Point Beer and they've got Pacifica. Constellation is a full liquor cabinet. Now everyone, you know, when we heard this earnings report, it seemed like the company was doing pretty well. Beer sales rose by 7%

last quarter from the year before. Okay, there we go. Overall sales were up 2% from last year. But one situation here, just like you can invest in stocks, companies can invest in stocks. Yeah. And Constellation bought $4 billion of the stock of canopy growth, which is a cannabis company. It's the world's biggest cannabis company. One problem. That investment just lost $1.3 billion last quarter as canopy stock dropped. Yeah, Canopy's stock dropped from 4860 when Constellation bought $4 billion of the shares to 3645, what they are now.

So the core business of Constellation is profitable in doing well. But overall, it had a loss because of that downer canopy investment. All right. So that's why the stock fell 6%. But that's not what we're focused on. We're focused on four words. Four words. Ready?

Corona branded hard salsa. Let that sink in. It's coming. What are you doing with a lime in that situation? I think you put it in. I think you always put it. And we also talk about four flavors. All right.

Get this. Here's the first one. Tropical lime. My God, that is a terrible idea. Tropical lime. Beer seltzer? Yeah. Sounds bad.

Okay, we're concerned with that. The other three flavors are mango, cherry, and blackberry line. This sounds like a hazing opportunity for like a sorority. So we got a corona, alcoholic, seltzer thing coming. and that's because of the trend. Alcoholic Seltzer sales tripled in the past year. Not a justification to get into tropical wine-flavored sparked

Seltzler, but they're doing it anyway. Yeah, I'm concerned about that tropical wine-flavored corona. They may go back from the drawing board on that one. So, Jack, what's the takeaway for our buddies over Constellation? You don't just jump into a new alcohol category. You strategize and do it so strategically. In fact, we noticed three things in this announcement

that led us to that takeaway. The management said Spike Seltzer had an impact on our bare franchise. That's the reason why they're getting into this is because Spike Seltzer is actually taken away from the beer market. Hot Girl Summer. They also said spiked Seltzer is quote unquote here to stay. No laws when you're drinking claws. And this is the third and final thing we noticed that was the biggest of them all. They think that the spike seltzer trend is going from low end to high end. So right now you got Trulie and White Claw, which are at the low end. We're talking like Bachelor Party gear here. Constellation thinks it

can position itself at the high end of these spiked seltzer. And they said, quote, unquote, that's where we have the most market share when you're pricing things a little bit higher. And that's where they think they can win. For our third and final story, Square, the payment processor, we'll start working with CBD sellers. Get the gummies out. This comes after news last month. Shopify, the e-commerce. Remember it well.

We covered it. Handles all your e-commerce. Yep. It started letting CBD companies use Shopify. Now, Square is saying, hey, we know that you're swiping us when you're like buying that almond milk latte. It's got those little tablets in the little terminal you can stick your credit card in. They're very squarely. And they always say, do you want to tip 20%?

And you're like, no, because I just bought a kind bar. Full disclosure, this is a pro-tipping podcast. Yeah, we actually are very much into tipping. But what they're saying is, hey, now we're going to let CBD selling companies and shops use our payment process. So we're seeing CBD and cannabis to a lesser extent moving from the black market, which is illegal, to the white market, which is legal. In the meantime, they're in like a gray market. There's definitely some shades of gray. Lack of clarity on this one.

For example, CBD has been legalized federally because it comes from hemp. And hemp became legal when the farm bill passed Congress earlier this year. But here's the problem. Technically, cannabis, which is different than hemp, is still illegal federally. Yes. And the result, we're going to shifting to cannabis here, the result of federal illegality for cannabis, even in states where it's legal, it's illegal for banks to work with cannabis companies. Case in point, let's say you're walking around Berkeley, California.

Maybe just stopped. You got a nice juice. maybe an assayee bowl. There's a cannabis shop right there. On your left. California has legalized cannabis. But if you try to walk into this cannabis shop, you're going to be met with a TSA-style metal detector and a bunch of warning signs.

You're going to see a bunch of warning signs that say, we take cash only cash. And inside the shop, there's going to be a full aisle, just stock full of ATMs, because you didn't bring enough cash. Exactly. And that's because it's a federal crime for a bank to be involved in transactions of an illegal nature. and this is what's known as anti-money laundering laws. Yes.

So hemp is legal, but cannabis is still federally illegal, so banks don't want to be involved in any company doing anything with cannabis. Even if it's just CBD. And even if it's in a state where it's been legalized. So, Jack, what's the takeaway if you're a shop, just trying to sell some CBD or cannabis? Lack of financial services is keeping both industries down. This is the banking bottleneck. Loans, electronic payments, bank accounts, those haven't been available for cannabis companies.

Except there was a recent development last month, the Safe Banking Act, S-A-F-E. It was passed by the House and attended to the Senate. If it becomes law, it will allow banks to work with cannabis companies that are doing legal business in the state like California, where it's been legalized. And there are about 10 states that have done that legalization. So that would allow cannabis companies to stop working with Pat and Penn, cash and cashier, and keep all their cash in a vault, would let them join the modern financial system. In the meantime, banking is the bottleneck when it comes to cannabis.

Jack, can you whip up the table? takeaways for us over there. Uber just rolled out another app. It's called Uber Works. And this app for temp work could become its elusive profit puppy. Constellation brand stock tanked on news that its cannabis investment has performed badly. But it's jumping in hard with like the spike seltzer with Corona hard seltzer. Which is top shelf hard selts. That's what they're aiming. Third and final story. Square is welcoming CBD companies to its electronic payment universe. And it's because cannabis is moving slowly from the black market to shades of gray and banking's the bottleneck. time for a snack back to the day. This one sent in by Ari Abram in lovely Schenectady, New York.

Yes, Schenectady New York has a GE plant. Home of my grandfather worked there. Yeah, Ari works at GE, and she works in the wind power generation. Now, Ari spent a lot of time crunching the numbers here. Jack and I had to get an abacus at TI83 and three chalkboards to double check this stuff. So the top offshore wind farm in America is just off the coast of Block Island. I've seen it in Rhode Island. Very nice place, very charming. It produces 30 megawatts of power. Okay, I'm following you. In a year, that's a year. That is 262 million kilowatt hours. Big number.

Following you still. Now, an electric vehicle has a tank, and it goes about 60 kilowatt hours. Give or take, you know, these tanks. And each tank goes 240 miles before you have to recharge. Okay, here we go. So the wind power facility off Block Island produces one billion miles of energy. I'm following you. Big number, got it down.

Per year. Okay. The average lift ride. Yep. Nick. Is six miles. Okay, not that far. In conclusion.

Yes. the wind power facility off of Block Island, Rhode Island. Of course. Has 175 million lifts of energy per year. Exactly. Ari knows our favorite unit of measurement is a lift. Nailed it, Arne. You crush it on this one.

Ari, we appreciate it. Send us your address because we got to get you a T-Boyd. I think she deserves a snack. That was a T-boy, no doubt. Remember to send us your snack facts at Robin Hood Snacks. I love being with you guys. Thanks for snack, and we'll be back with you Monday. Have a great way.

Can't wait. The Robin Hood Snacks podcast you just heard reflects the opinion 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.