The Best One Yet - “It’s like Ben & Jerry’s going dairy-free” — Delta’s carbon neutrality. Headspace’s $93M fundraise. Canopy Growth’s rebound.

Episode Date: February 18, 2020

The 3 major marijuana producers have had a tough year, but Canopy Growth’s latest earnings powered pot stocks up thanks to price per kilo. Delta announced plans to go fully carbon neutral by 2030 �� how can one of the most polluting industries can pull that off? And Headspace snags $93M in fresh funding to one-up its rival in the wellness app showdown.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. And this is Snacks Daily. It is Tuesday, February 18. If I've said it once, I've said it a hundred times. Every weekend should be a three-day weekend. And that's why this Snacks is the best one yet. I'm still sore from skiing.

I learned that Powder scares me and our team won a game of monikers. Jack, anything to share? Guess what? I became an uncle this weekend. Boom. It's official. I don't even know how that happens. How does that happen?

Baby Greta, I'll tell you, she is as beautiful and cute as Baby Yoda. She sounds like she runs like a jerk. and factory jack already. Congrats, Teddy and Lauren. But we got to get to our first story. Delta unveiled a bold new plan to become carbon neutral. First airline that won't pollute the skies, despite the six plastic cups they throw at you mid-flight when you just wanted one

seltzer. I just, I do not need two cups for myself. No. I don't need to double cup that thing. We're doing fine. Our second story, 2019 was a major bummer for weed stocks. CBD can soothe anything except for portfolios. But canopy growth's earnings on.

Friday, popped cannabis stocks. It's all about the PPC price per kilo. Third and final story, Jack. Our nearly unicorn of the day is Headspace. I love this company. They just snagged $93 million in fresh funding to pull ahead of calm in the wellness app race. Ironically, this is becoming extremely stressful as each one raises more money. But before we get into that, we got the inevitable question. Should President's Day have an apostrophe or not? We all dealt with that. Maybe you had an away message up and you had no idea what direction to go in. So you asked six people around you. Who knew, Jack? Is this plural? Is this singular? Is this possessive? Is this a contraction? I don't know the answer to any of these questions. So Jack and I jumped in snack style. We discovered that the AP style says there's no

apostrophe, but the Chicago manual style disagrees and thinks there should be an apostrophe. Classic Chicago contrarian views there. Technically, this is actually called Washington's birthday by the federal government since 1971, Washington's birthday with an apostrophe because that's clearly possessive. But here's where it gets confusing because Washington's birthday is February 22nd, but Lincoln's birthday is February 12th. So are we talking plural or singular? That's the cause of the confusion. I think it used to be Washington's birthday, but if you want to include Lincoln, you call it President's Day. And even more confusing, it's a federal holiday, but states are allowed to call President's Day with or without the apostrophe or any other name that they so choose.

Iowa's throwing a total curveball. They don't even recognize this as a state holiday. Meanwhile, Ohio, Utah, and Colorado, they celebrate both presidents as Washington Lincoln Day. And if you're from Nevada, New Jersey, or Oregon, you can celebrate all presidents, plural, not just Washington and Lincoln, all presidents.

And that means that 43 presidents are freeloaders and the holiday for them, even though their birthday isn't even close to February. The birthday's not even close, and they basically get a birthday. Snackers, apostrophe or not, let's hit our three stories. You're tuned in the snacks daily. We spoke to the lawyers of them.

Snacks about to hear ain't food. It's air candy. They don't reflect the views of the Robberhood family. It's all informational just so you know. 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 store, Jack, sit back, relax, and put that damn. seat in the upright position. Delta just pledged to become carbon neutral in 10 years. But mostly by planting like millions of trees. Now Snackers, this brings Jack and I to the age old question, to recline or not to recline. The fifth commandment of the airline is thou shalt recline if thou wants to recline. And Delta CEO Ed Bastion just did a CNBC interview where he said

we all have the right to recline, but you just got to let the person behind you know you're going to do it. Ed Bastion said it's the polite thing to do to turn around and be like, hey, do you mind? I'm going to lean back. You might want to brace yourself. Hold on to your drinks. I hope you don't have a coffee because he might spell it. Good thing, because Ed Bastion is like a giant. He's six foot three, and he doesn't recline.

Ed Bastion is a gigantic person, but he definitely flies on his own California king-sized bed. Yeah, not a recliner. Ed must be nice. But in that same interview with CNBC, Jack and I noticed that he discussed a very inconvenient truth that eats at us every time we're in a window seat. Flying planes requires burning fuel directly into the atmosphere. It's like building that greenhouse above our planet contributing to global warming. Now, Delta doesn't deny this, but it also was the very first sentence on their press release about their big new carbon neutral initiative.

98% of Delta's carbon footprint is the jet fuel that powers the planes and that's burned right into the atmosphere. So Jack and I jumped in snack style, went a little further and found an incredibly long and inefficient fact that sums all this up. No, Nick, this is a good fact. I couldn't figure out a way to snackify this thing, but I think the snackers are ready for it. All right, here's the first part. One JFK to London round-trip flight generates as much carbon dioxide per passenger. One second, I need to take a break. All right.

As much CO2 per passenger as one person produces in an entire year who lives in 56 countries. We'll let that one sink in. Yeah, the most polluting people pollute more, but in 56 countries, the average person pollutes less than one round-trip flight. And so that leads us to the big question here. What exactly is Delta going to spend $1 billion on to make carbon neutrality possible in 10 years? First, they're going to make the planes more efficient. They're going to reduce the weight of the planes by taking out excess weight. They're going to use more sustainable fuel.

Just throw some ethanol into that jet fuel neck. Oh, and then they mentioned they've got these A-220 planes that are 25. percent more efficient than the ones they're replacing, these planes are in great shape. But the more colorful solutions are basically the wokeifying solutions. Get more woke at Delta. So what Delta can be doing is like planting trees to remove carbon. They're basically going to have like Delta forests flopping up around the country. Because remember, plants inhale CO2 and exhale oxygen.

Now the staff of Delta also pledges they're going to start recycling better. That means stop offering me four napkins with every drink. I don't need four napkins and stop double cupping that cup. If you ask a flight attendant to refill your cup, they look at you and they're like, what do you do? You get a dirty look. What are you doing? So basically our take here is Delta is paying $100 million per year in a voluntary carbon tax.

And the hope is them doing that and spending big on sustainability will bring in more customer love. So Jack, what's the takeaway for our buddies over at Delta? How can an inherently polluting business become carbon neutral? Snackers, both Delta and BP, both pledged carbon neutrality in just the past two weeks. Which is insane because airlines and oil are two of the highest polluting industries there are. This is like Ben and Jerry saying it's going dairy-free and sending the cows home. Yeah, how do you do this? It's inherently counter to your business. And those cows, they have families. They're working hard.

They can do it with carbon offsets. Basically, they pay for a certificate that says, you know, somebody will plant trees in exchange for this. Or Delta will pay like a million dollars and somebody else will replace their factory with solar panels instead of coal-powered electricity. But not our factory. Not our factory. Now, these carbon offsets, they aren't as good as polluting less because who knows if that forest like was actually ever built. Delta's carbon emissions are very easy to measure and verify. But Delta's carbon offsets, like planting some forest, those are hard. harder to measure. Either way, Delta is making progress while the government does nothing. For our second

story, cannabis stocks really needed a boost. And it got a boost from canopy growth's earnings on Friday. All right, Jack and I are going straight up leaf to table on this one. We're tracing cannabis stocks from the farm to the stock market. Jack, where we begin. The first Canadian cannabis companies went public in 2015 and the last IPOs kind of went through like 2018. Now, Snackers, You may remember mid-2018, Bitcoin insanity had kind of calmed down, and investors began moving over to cannabis insanity. Nick, remember the end of 2017 when if you created a new crypto, chances are it would get 10 times higher in price in like one week?

A lot of people thought we were coming out with crypto snacks. Never was the thing, though. I swear, six months later, it felt the same with cannabis stocks. They were going crazy high. And that's when Jack and I noticed a big three of cannabis began to emerge. They're all listed in Canada, because... because that's a more marijuana-friendly country. Aurora, Canopy, and Tilray.

Those were tiny companies that hit multi-billion dollar valuations on just thrill and excitement for the legalization of marijuana. And then Snackers, a key step happened in October 2018. Canada legalized recreational weed becoming the second country in the world where you could smoke pot and not worry about the cops. But life is all about expectations, and investors kind of expected that this would be like a Willy Wonka

opening up his chocolate factory for the masses situation. They expected pandemonium miscalculated. Demand did not meet investor sky high expectations. And that's when the bubble popped last year. Get this, Snackers. Aurora's stock has fallen 83% from its highest point. Tilrey's stock is down 89%. And Canopy, rounding out the big three,

its stock is down 56%. That's why Jack and I were so fascinated with Canopies' earnings report that came out on Friday because it's the biggest of Canada's big weed. So we jumped in snack style and there's a key metric that we watch in cannabis earnings, the price per gram of weed. That's the key supply demand item that drives profits for a company like canopy. Okay, for canopy last quarter, the average kilogram of marijuana, cannabis,

whatever you want to call it, sold for $7.23. That is down just 10 cents from the previous year when they were selling for $7.33, Now, that may not sound like a lot, but it's a big deal when you consider that the price per gram plummeted 24% during the previous quarter. So canopy stock jumped 18% on Friday on excitement that the dropping of price of their core product may have hit a bottom and might be turning up. And that caused Aurora and Tilray stocks to also hit highs jumping 8% on Friday each. So, Jack, what's the takeaway for our buddies over in cannabis over at canopy? Cannabis investors are searching for the bottom of the dip. Snackers, many still believe that cannabis stock could hit a high

thanks to the fundamental trends supporting cannabis growth. One trend is the opioid crisis in America. Right. Marijuana could be a safer alternative for pain control. Another trend, policy and legal 180 that has happened in the United States regarding marijuana. We're talking like easing criminality of marijuana, legalizing it and like finding it everywhere. Finally, the fact that wellness is more important than the social stigma you might get, if you are a weed smoker. Yeah, made-up snack fact here, one out of three snackers have a CBD toothpaste for their cat. The market's reaction Friday to canopy stock suggests that they think the worst could be over for the cannabis industry. That's why we could be past the bottom and

stocks could go up from here. But the whole cannabis industry is still praying and hoping for legalization in the United States, which hasn't happened yet. But politics could change everything in either direction really quickly. By the way, this is Nick and I still own one. Bitcoin. His name is Ben. For our third and final story, Headspace, the wellness app, just raised $93 million in fresh funding. It kind of makes the meditation app rivalry a little more stressful. Jack and I have seen how Zen Headspace's press releases and website are, but we're like wondering if that even carries over to behind the scenes like pitch sessions to investors. Excuse me, venture capital. Be present, focus on your breathing, and purposefully write as a check for $93 million. Or is it really

more like, uh, we need $93 million right now if we're going to be the top wellness app. Please, please, please give us a check. Please give us a check. Please give us a check. Please give us a check. And the reason they may be a little stressed out over at Headspace is because there are two leaders when it comes to wellness apps focused on guided meditation. Calm and Headspace. Both offer five, 10, or 15 minute audio recordings. You listen to in the morning. You start your day by getting your head in a clear place with some meditation and some mindfulness. Boom. Your balance is to start.

your day even though you've got 400 emails in your inbox. Now, last year, we went over KOM, which had hit a unicorn status, $1 billion with its latest fundraise. Both KOM and Headspace are private companies, but they're both trying to become unicorns, and KOM is doing it by hiring Matthew McConaughey. There's actually a feature in their app where he will whisper you a lullaby so that you can fall asleep. Sounds pretty epic. There's nothing like going into a dream guided by Matthew McConaughey. But Headspace, they don't have McConaughey. Headspace has been around longer. They're about to turn 10 years old. Yeah, their co-founder became mindful as a monk in India. So mindful that he moved to Silicon Valley in California to start a startup that he could

turn into a billion dollar company and eventually get insanely rich when he someday IPOs. Now, technically, Headspace has 62 million downloads, but what impressed Jack and I is that they've got two million paid subscribers who are getting like fancy hell-non wellness support. These things are like between $50 and $100 per year. It's really impressive. They've got two million people to sign up. Now, Snackers, shocker here, both companies obviously based in California, one in San Francisco, one in L.A. But ironically, these companies put a lot of pressure on their employees who seem really stressed out. Yeah, Jack and I jumped into the Glassdoor employee reviews of the companies, and they've mentioned it's a fast-paced culture with a lot of pressure. Sounds like Headspace needs more

headspace for its headspacers. Now, the most interesting thing about Headspace, it seems more interested in your boss than it is to you. Jack and A were fascinated about this. They've got a new feature called Headspace for Work that launched in 2017. This helps businesses get their employees becoming more mindful through meditation. Right. The idea is if you've got a clear head, that leads to good ideas. Good ideas lead to good profits. I actually use Calm like every other day, probably, with Alex who uses it every day. And I think it's made our snacks better. Half of Jacks and my good ideas come during Shavasana. I'm like tempted to bring in a whiteboard to class. And that's why Starbucks, General Electric, and Hyatt hotels are among these 600 corporate clients that have signed up for

Headspace for Work for work for all their employees. And that's why Headspace for works revenues have doubled annually since 2017. So Jack, what's the takeaway for our buddies over at Headspace? Headspace is taking on the existential question, B to B or B to C. Right. Snackers, B2B is business to business, companies that sell to other companies. But you just see is business to consumer. That's when companies are trying to sell you and me and us products because we're just regular consumers. But here's the thing Jack and I have noticed about the wellness tech industry. The answer is both. Fitbit, One Medical, Headspace. These are all techie wellness health care companies that are trying to sell directly to my boss and directly to me at the same time. But Headspace is going to use

$93 million to focus on more B2B. Jack, can you whip up the takeaways for us over there? Delta is paying an extra $100 million a year to offset the carbon emissions from its flights. An inherently polluting business can get carbon neutral thanks to carbon offsets. Our second story, the price per gram of cannabis sold by canopy stopped plummeting last corner. So investors bought the dip, hoping cannabis stocks go up from here. Our third and final story, Headspace just got $93 million from private investors as it keeps

growing before its mindful IPA. Clear your mind so you can pitch your company's HR department on adding headspace for employees. Time for our snack back today. This one sent in by Kalyani Lameh from Mumbai, India. Kaliani, this is kind of depressing, but kind of shocking. All right, we've heard of Steve Jobs. We've heard of, is it Steve Wozniak? Let's go with Steve. Okay, two steves. So two famous Steve founders of Apple. But have you heard of Ronald Wayne. Ronald Wayne is the forgotten third founder of Apple, and he did something that he probably regrets. Twelve days after the company was founded, he sold his 10% stake of Apple to Steve Wozniak, and he's like, I'm out of here. I don't think you guys are going to create an iPad, an iPhone, an iPod,

trillions of dollars. That 10% was worth just $800 then. The shares now would be worth $140 billion. Jeez, Kalyani. We're really kicking this guy while he's down. with this snack fact. Snackers loved having you with us. We missed you yesterday. I missed you the whole long weekend. I'm excited to be back. Can't wait to snack tomorrow. We'll catch you tomorrow. 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.