Last year, we saw pro-pot lawmakers attempt to load up any and every COVID-19 aid bill with marijuana industry wish list items. Though none of those attempts proved successful, they are back at it again.
Last week, Rep. Ed Perlmutter (D-Colo.) offered the SAFE Banking Act as an amendment to the annual military spending bill known as the National Defense Authorization Act, or NDAA. The NDAA is a must-enact defense spending bill that Congress has passed into law each year for 60 years in a row. Which renders Perlmutter’s move especially shady.
Outside of full, federal legalization, passing the SAFE Banking Act into law is the top priority of the marijuana industry. The bill would allow the industry access to the federal financial system, opening it up to take out loans, have FDIC-insured bank accounts and accept all major credit cards without having to resort to loopholes. But the real reason why this bill is so critically important to Big Pot is that it would finally allow pot companies access to institutional investment.
You see, there are currently billions of dollars sitting on the sidelines, waiting to be invested into the pot industry by major investment firms, hedge funds, pension systems and other major corporate interests. These interests, according to former House Speaker and pot advocate John Boehner, want to “dive head-first into cannabis.”
As it stands, the giants of Big Tobacco and Big Alcohol are deeply invested in the marijuana industry across our northern border in Canada. Altria, the maker of Marlboro cigarettes, invested $2 billion into Cronos, a Canadian weed company, while Constellation Brands, one of the largest alcohol conglomerates, pumped $245 million into another Canadian marijuana company, Canopy Growth.
But while these two giants of the addiction industry are unable to fully invest in American marijuana companies, their well-heeled lobbyists are working the halls of Congress, pushing for the SAFE Banking Act.
The most direct, immediate result of this bill would be billions of dollars in investment flowing into pot companies that can then be spent on research and development of new, highly potent products and new marketing campaigns that will further normalize marijuana use and result in more youths using the drug.
As an aside, don’t be fooled into thinking the pot industry is marketing the 5-percent-THC pot smoked in the 1960s and ’70s. Today’s marijuana regularly contains upwards of 30 percent THC — the main, psychoactive compound — in flower and 99 percent THC in concentrates such as dabs and vaping oils. This new, high-potency pot has been linked to a litany of serious mental-health issues, such as anxiety, depression, schizophrenia and psychosis.
The pot lobby has promulgated lie after lie to convince lawmakers to support this bill. They say they are forced to operate as a “cash-only” industry due to the lack of conventional banking access. This has repeatedly been shown to be false, as many marijuana dispensaries readily accept card payment. Furthermore, the pot lobby claims that its (false) status as “cash-only” makes dispensaries a prime target for robberies. While it’s true marijuana dispensaries are oftentimes robbed, many such robberies are not after cash that is locked away in a backroom safe, but the marijuana products on the shelves.
In short, the SAFE Banking Act is nothing more than the federal government signing off on corporate investment in the marijuana industry. And what’s worse, it could set the precedent for banking access to other industries that traffic in federally illegal substances. Former officials from the Carter, Reagan, Bush, Clinton and Obama administrations have even warned this bill could grant cover for criminal cartels to engage in money laundering.
To the point at hand, marijuana-industry banking access has absolutely nothing to do with the funding of our military and other national-security operations; the inclusion of this amendment is just another example of the desperation of the marijuana industry. The American people should reject these shady tactics and put kids before the pot industry.
Kevin Sabet, a former three-time White House senior drug-policy adviser, is president of Smart Approaches to Marijuana and author of “Smokescreen: What the Marijuana Industry Doesn’t Want You to Know.”
Simon Kronenfeld: Best Performing Stocks on TSX in 2021
Simon Kronenfeld is well-experienced in analyzing stocks across North American markets. Recently he has turned his attention to the Toronto Stock Exchange in particular. Although less liquid than US exchanges, there remains strong potential for reliable returns if you know your way around the TSX. Spotting the stocks with the potential to survive and thrive in changing times will be a key skill in 2021.
Simon Kronenfeld dwells upon three companies that are performing well on the TSX in 2021.
- Goeasy Ltd: Goeasy’s success is a reflection of the wider financial sector in general. The company primarily offers loans for home appliances and furniture through their easyHome and easyFinancial divisions.
The company has issued around $5 billion in loans to date, and they continue to help Canadian borrower’s build their credit scores, with 60% of customers increasing their credit scores within a year. Despite the pandemic, the company’s stocks have continued to deliver great returns over the last year. In fact, its share prices have risen 210% since August 2020. Considering the wider economy, Goeasy is looking like a sound investment for the future.
- TFI International: TFI International had some negative news at the start of the year as its stock prices slipped, but they have bounced back to triple the value of that period. These temporary dips are not a major obstacle for smart companies with the right plan.
TFI International is a logistics company with over 500 access points across North America. This company covers all the major sectors of the industry, including Package and Courier, Truckload, and Logistics, and provides more than 31,000 jobs.
The company recently acquired UPS’s Less-Than-Truckload freight service, which has led to a major transformation in their revenue distribution. Now the company predicts 75% of their revenue to come from the US market, where there is more growth potential. Simon expects to see long-term growth and value from this one, despite the stock price boost it has already experienced.
The company has made major improvements to its efficiency following the acquisition, putting it on the right path to make further inroads into the US market.
- Shopify: Shopify is the most widely-used e-commerce marketing platform, used by small businesses and major operations alike to create online stores and sell products, thanks to its streamlined design process and in-built payment platform.
Business was already booming for Shopify before the pandemic, and the shift towards online shopping in the last year has only served to compound its successes. As a result, it has experience growth of 32% in the last year, and Simon expects this trend to continue.
Simon Kronenfeld is not only a businessman, he is also a business expert in today’s world. He founded the company Electronic Liquidators Inc. in 1999 and paving the way for many opportunities as he sold it and made his way into real estate. Now after 2 decades, Simon Kronenfeld is a real estate mastermind who plans to build luxury housing by the beach. If we think about what the driving force behind Simon Kronenfeld’s success has been, we can say that it is his self-motivation to do better.
First U.S. futures-based bitcoin ETF begins trading, bitcoin nears record
The first U.S. bitcoin futures-based exchange-traded fund began trading on Tuesday, sending bitcoin to a six-month high and within striking distance of its all-time peak, as traders bet the ETF could boost investment flows into cryptocurrencies.
The ProShares Bitcoin Strategy ETF began trading on Intercontinental Exchange Inc’s NYSE Arca on Tuesday under the ticker BITO after being greenlighted by the U.S. Securities and Exchange Commission.
Bitcoin futures have been overseen by the Commodity Futures Trading Commission for four years and ETFs – securities that track an asset and can be bought or sold on a stock exchange – are regulated by the SEC, offering some level of investor protection, SEC chair, Gary Gensler, said on Tuesday.
“Yet it’s still a highly speculative asset class and investors should understand that underneath, there is the same volatility and speculation,” he told CNBC.
Bitcoin, the world’s biggest cryptocurrency, touched $63,337.54 after the listing, its highest since mid-April and near its record of $64,895.22.
Known throughout its 13-year life for its volatility, bitcoin has risen by some 40% this month on hopes the advent of bitcoin ETFs – of which several are in the works – will see billions of dollars managed by pension funds and other large investors flow into the sector.
The BITO ETF was last at $40.95, up slightly from its $40.88 open.
“It has traded tightly, within a penny of fair value pretty much all morning, so it’s part of the ecosystem,” said Dave Nadig, chief investment officer and director of research at ETF Trends.
The ETF had traded around $500 million worth, notionally, by late morning, which is “about what we would expect for a media-darling first launch in the space,” he said.
Much of BITO’s initial volume appeared to be from retail investors, as there were only four block trades, above 10,000 shares, all morning, Nadig said.
Nasdaq Inc on Friday approved the listing of the Valkyrie Bitcoin Strategy ETF, and Grayscale, the world’s largest digital currency manager, plans to convert its Grayscale Bitcoin Trust into a spot bitcoin ETF, the company confirmed.
Crypto ETFs have launched this year in Canada and Europe amid surging interest in digital assets. VanEck and Valkyrie are among fund managers pursuing U.S.-listed ETF products, although Invesco on Monday dropped its plans for a futures-based ETF.
The SEC has yet to approve a spot bitcoin ETF.
Bitcoin futures were up 2.21% at $63,035.
(Reporting by John McCrank in New York, Tom Wilson in London; additional reporting by Tom Westbrook in Singapore and Katanga Johnson in Washington; Editing by Kim Coghill, Jason Neely and Andrea Ricci)
Opinion: Caisse's investment in a cryptocurrency company at odds with its pledge to fight climate change – The Globe and Mail
The Caisse de dépôt et placement du Québec’s first-ever investment in a cryptocurrency company is providing Canadians with a reality check on its climate commitments.
With the ink barely dry on its new climate change strategy, Canada’s second-largest pension fund manager announced last week that it is taking part in a US$400-million investment in Celsius Network, a New Jersey-based cryptocurrency-lending platform.
U.S. private-equity firm WestCap Group is the lead investor in that transaction. Nonetheless, the Caisse’s involvement is raising eyebrows. That’s because Canadian pension funds, which generally have conservative risk appetites, have largely eschewed significant investments in crypto companies. But this particular investment is also curious because it is inconsistent with the Caisse’s recent environmental evangelism.
To be clear, Celsius Network is not a cryptocurrency. Rather, the company facilitates cryptocurrency lending to retail and institutional investors.
Celsius Network, though, does earn some revenue from cryptocurrency mining. That’s the process through which computers create new digital coins by solving complex mathematical equations to verify transactions and record them on a public digital ledger.
Since cryptocurrency mining requires significant computing power, the process is energy intensive, results in greenhouse gas emissions and contributes to climate change.
Although Celsius Network is not primarily a cryptocurrency miner, digital currencies are integral to its business model. That means Celsius Network (and by extension the Caisse as one of its investors) reaps benefits from other people’s mining.
For its part, the Caisse is defending its investment in Celsius Network.
“Celsius is a lending platform – not a cryptocurrency – that provides access to fair, rewarding, and transparent financial services, with mining operations that account for a small portion of revenue and are based exclusively in North America, where it can primarily rely on renewable energy sources,” Alexandre Synnett, executive vice-president and chief technology officer at the Caisse, said in an e-mailed statement.
“More importantly, it is also a carbon-neutral business and we expect this to continue going forward,” he added.
The devil, of course, is in the details. For instance, the Caisse can’t guarantee that all cryptocurrency deposited and lent out on Celsius Network’s platform was created using renewable energy.
To illustrate this point, one only needs to consider the environmental impact of bitcoin, which is the world’s most popular cryptocurrency.
Although some proponents have previously claimed that a majority of bitcoin miners use renewable energy, a 2020 study from the University of Cambridge concluded that renewables comprise only 39 per cent of the total energy consumption for mining.
It’s also worth noting that until recently, the vast majority of bitcoin mining took place in China, which generates much of its power from coal. (China banned cryptocurrency mining and trading in May, prompting miners to seek out other jurisdictions. The United States is now the world’s largest bitcoin mining centre.)
This year, a Bank of America report suggested that purchasing a single bitcoin was akin to owning 60 gas-powered cars. Former Caisse chief executive Michael Sabia has also taken a dig at bitcoin, previously comparing it to a lottery ticket – although he did distinguish the cryptocurrency from its underlying blockchain technology.
The Caisse declined to say how it will provide its stakeholders with climate-related disclosures for its Celsius Network investment from here on out.
Other institutional investors are paying close attention to the Caisse’s debut investment in this space. That’s precisely why the Task Force on Climate-related Financial Disclosures should provide detailed guidance on divulging the nitty-gritty of crypto-related investments.
The Caisse’s investment in Celsius Network, however, is just the latest indication that there are limits to its commitment to fight climate change.
Although the pension fund manager plans to sell off its remaining oil-producing assets and establish a $10-billion fund to decarbonize other high-emitting industrial sectors, it won’t divest its investments in oil and gas pipelines.
So, oil-producing assets are unacceptable, but pipelines and an investment in a cryptocurrency company are A-okay? It takes mental gymnastics to reconcile these exceptions with the Caisse’s public pledge to protect the environment.
The Caisse should just admit that it’s a casual climate crusader that has every intention of cherry-picking its goals. It should also come clean about any other caveats in its new climate change plan.
This issue doesn’t just concern Quebeckers. The Caisse has $390-billion in assets, which means its investment decisions matter to the country as a whole.
We get it. It’s not easy being green. But please spare us the spin.
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