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Marijuana Stocks Underperformed in 2018: Here’s Why — 5 Points

1. Surprisingly, Marijuana stocks have had a rough year in 2018. This past year has been groundbreaking in the pot industry. Canada legalized recreational marijuana. Two more U.S. states, Utah and Missouri, legalized medical marijuana and two others, Vermont and Michigan, legalized adult-use recreational marijuana. Despite this growth pot industry, stocks have faltered.

2. Specifically, the Horizons Marijuana Life Sciences ETF, which is the first publicly traded exchange-traded fund (it debuted in 2017), “was down 45% year to date, and has given up better than three-quarters of its gains since inception.”

3. Why have marijuana stocks performed so poorly this year? The following 3 reasons help to explain, in part, why stocks have been underwhelming. First, there has been a shortage of cannabis, for two reasons. 1) Cannabis growers haven’t had time to complete their grow and sell their product; 2) In Canada, there is a lot of red tape surrounding pot production and distribution. Canadian pot growers need a cultivation license, and it is taking a while for the government to keep up with the influx of applications.

4. Second, since about mid-October, investors have been scared away from pot stocks. Earning results weren’t as substantial as expected, and now actual earnings is becoming more important than potential earnings. Specifically, “Seven of Canada’s largest growers combined to lose nearly $300 million in their most recent quarter.”

5. Lastly, not many marijuana stocks “have been able to secure access to nondilutive financing options. The result has been a reliance on bought-deal offerings to raise capital.” Bought-deal offerings can be fine, but they can also weigh on a company’s share price, as well as potentially leading to reduced earnings per share.


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Chicago Sun Times Lists Top 10 People in the Cannabis Industry in 2018

1. Charlie Bachtell — CEO and Co-Founder, Cresco Labs.

2. Ben Kovler — CEO and Founder, Green Thumb Industries.

3. Teddy Scott — CEO and Founder, Pharmacann.

4. George Archos — CEO and Co-Founder, Verano Holdings.

5. Mark de Souza — CEO, Revolution Enterprises.

6. Dina Rollman — Chief Compliance Counsel, GTI and Founder, Illinois Women in Cannabis.

7. Dan Linn — Executive Director, Illinois NORML and General Manager, Maribis

8. Donte Townsend — Founder, Chicago NORML.

9. Kelly Cassidy — Illinois State Representative (Democrat, Chicago).

10. Heather Steans — Illinois State Senator (Democrat, Chicago).

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The Cost of Tariffs: U.S., China Trade War Resulted in Billions of Losses for Both Economies in 2018 — 5 Things to Know 

1. The trade war between the United States and China resulted in billions of dollars in losses for both sides in 2018. The auto industry, tech industry, and agriculture industry in the two countries took the biggest hits.

2. Specifically, “due to Beijing’s tariffs on soybeans, corn, wheat and sorghum alone,” the United States and Chinese economies each lost around $2.9 billion annually. China is the worlds largest soybean importer and relies on the U.S. for $12 billion worth of soybeans. With the tariffs, though, China has had to import soy from Brazil instead. For the U.S., this dropped the price of soybeans per bushel from $9.76 to $8.75 from July to December.

3. Overall in the agricultural industry, U.S. exports to China fell by 42 percent, or $8.3 billion, in the first 10 months of 2018 compared to a year earlier. Specifically, soy farmers in North Dakota, which exports crops to China, are facing “$280 million in losses because of Beijing’s tariffs.” Mark Watne, president of the North Dakota Farmers Union, added, “You could almost put another $100 million on top of this because all commodity prices are down and that affects North Dakota farmers indirectly.”

4. Not only did the U.S. and China lose money in the agricultural market, but “China also suffered as products such as phone batteries were hit by U.S. tariffs, and customers began looking to buy from other countries.” Specifically, tariffs on imported Chinese products cost the tech industry $1 billion per month.

5. Retail, manufacturing, and construction also drove losses after the tariffs were imposed. The Dallas Fed said, “Input price pressures remained elevated in part due to tariffs, particularly in manufacturing and construction, and firms were struggling to pass these higher costs onto customers.” GM, Ford, and Fiat Chrysler said tariffs will cause a loss of $1 billion for each of their companies in 2018.


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Pot to Continue Growth in 2019: Analysts Predict $16 Billion Investment into Industry Next Year — 4 Things to Know

1. In 2018, investors put $10 billion into the legal cannabis industry in North America. That $10 billion was already two times more than what was invested in the previous three years combined. That number is expected to continue to grow in 2019 — Beau Whitney, vice president and senior economist at New Frontier Data, predicts that investors will put $16 billion into the pot market in the coming year. 

2. Whitney claims that as the marijuana industry continues to grow, investors will have more clarity and a higher incentive to invest. “Investors are getting much savvier when it comes to this space because even just a couple of years ago, you’d throw money at it and hope that something would stick. But now investors are much more discerning.”

3. Previously, investors, including big name corporations, were hesitant to invest large sums of money into the industry until more states began legalizing weed. Now, with 66 percent of U.S. states legalizing marijuana in some capacity, and more planning to make that move, investors are much more likely to dive into the industry. Even Coca-Cola, for example, has stated publicly that it has interest in joining the industry and just needs a few more states to legalize the product recreationally.

4. Additionally, to start 2019, Democrats will take control of the House and “want to use it next year to pass legislation that eases federal restrictions on the legal marijuana industry.” Accordingly, legislation allowing state-approved commercial cannabis activity under federal law would “open up banking for the marijuana industry nationwide and make it easier for cannabis companies to secure capital.” This, of course, would incentivize further investment into the industry.


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Sears Chairman Eddie Lampert Submits $4.4 Billion Bid to Save Company, 50,000 Jobs — 5 Points

1. On Friday, Sears Chairman and former CEO Eddie Lampert announced that he is submitting a $4.4 billion takeover bid for the U.S. retailer. In October, Sears filed for bankruptcy, and it has been trying to escape both liquidation and laying off 10,000-plus workers ever since. 

2. Lampert’s $4.4 billion bid is being backed by “$1.3 billion in financing from three different financial institutions.” Bank of America Corp, Citigroup Inc, and Royal Bank of Canada are those backers. Lampert and Sears are hoping the money will preserve around 425 yet-to-be-closed stores along with keeping 50,000 workers, out of the 68,000, employed. 

3. An ESL Investments (Lampert’s hedge fund) spokesman said, “Factoring for all considerations, we believe that our going concern bid provides the best path forward for the company, the best option to save tens of thousands of jobs and is superior for all of Sears’ stakeholders to the alternative of a complete liquidation. Much work remains and there is no assurance our proposal will be completed.”

4. The next step for Sears is to determine whether the bid is viable. It is possible that the company could still reject the bid. And, without a proper, viable bid or another buyer (which a bankruptcy court judge must approve of), Sears would have to close permanently after 125 years.

5. Sears employees are desperately hoping that the bid helps the company stay open. Not only do they want to keep their jobs, but they feel particularly attached to the company. Bill Rudolph, a Sears employee, said, “It was a place where people cared for each other. Mattie Hughey, another employee, added, “It feels like family.”

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Becker Group Business Strategy 15 Minute Podcast: Episode 6 – Quint Studer

This episode features Quint Studer interviewed by Scott Becker. Quint is the extraordinarily successful founder of the Studer Group. He shares his thoughts on what it takes to succeed in business. Everyone can benefit from his core concepts and thoughts. Quint also discusses his deep efforts in philanthropy as to building vibrant communities and talks about his work in owning a minor league baseball team. This is a must listen episode!

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Becker Group Business Strategy 15 Minute Podcast: Episode 5 – Marion Crawford

Marion Crawford is the founder and CEO of a fast growing marketing and PR firm that serves multi-billion dollar clients in healthcare, finance, tourism, and education. Here Marion’s shares her thought son business growth and development.  

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Becker Group Business Strategy 15 Minute Podcast: Episode 4 – Julie Silverman

In this episode of the Becker Group Business Strategy 15 Minute Podcast features Julie Silverman. Julie is a highly successful sales professional.    Here Julie describes how she became so successfuland her core tips for sales and business success.   

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Becker Group Business Strategy 15 Minute Podcast: Episode 3 – Howard Sutker

This episode of the Becker Group Business Strategy 15 Minute Podcast features Howard Sutker, founder and CEO of Sutker Advisors. Mr Sutker provides financial and CFO services to mid-market companies. Mr Sutker has built a highly successful firm in a short period of time.  

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Becker Group Business Strategy 15 Minute Podcast: Episode 2 – Jim Keller

This episode of the Becker Group Business Strategy 15 Minute Podcast features Jim Keller the name partner in Keller and Keller. Mr Keller has built a regionally dominant firm and has great ideas on how to win in business.