California Inc.: Legal weed apparently makes homes more valuable

May 27, 2019 5 AM PT

Welcome to California Inc., the weekly newsletter of the L.A. Times Business Section.

I’m Business columnist David Lazarus, and here’s a rundown of upcoming stories this week and the highlights of last week.

Put this in your pipe and smoke it: A new study finds that legalizing retail marijuana can increase housing values by about 6%, or $15,600 a property. At least this is what happened in Colorado, where researchers suggest that a newly legal marketplace created “unprecedented business and employment opportunities.”

LOOKING AHEAD

Markets closed: Today is Memorial Day, which means financial markets are closed in observance of the service and sacrifice of our men and women in uniform.

Home prices: The latest Case-Shiller home price index comes out Tuesday, providing a pulse-reading of the nation’s housing market. In February, home prices rose 4% from a year earlier, down from a 4.2% annual gain in January.

Consumer spending: New figures for all-important consumer spending will be released Friday. Spending surged in March, rising 0.9% after a 0.1% gain in February. This was the largest monthly gain in almost 10 years.

Tiny dancer: “Godzilla: King of the Monsters” opens Friday for some good old-fashioned city stomping. For those who prefer crocodile rocking to city stomping, check out the Elton John biopic “Rocketman,” which received strong early buzz and, of course, has lots of great music.

THE AGENDA

Monday’s Business section takes note of the abandoned farms caused by the global coffee craze. Both Brazil and Honduras last year reported record coffee output, while Colombia has been producing its highest levels since the 1990s. But demand has not kept pace, and there is a massive oversupply in the market. Farmers, in turn, are going out of business.

STORY LINES

Here are some of the other stories that ran in the Times Business section in recent days that we’re continuing to follow:

Smartphone ruling: A federal judge has decided that Qualcomm Inc. violated antitrust laws by using its dominant position in smartphone chips to extract excessive patent license fees for its cellular inventions. The Federal Trade Commission had brought the case against the San Diego company two years ago noting its dominance in 3G and 4G smartphone processors, where it supplies 50% of the global market.

Hollywood IPO: Endeavor, the Hollywood talent agency and media behemoth, filed for its initial public offering despite a historic feud between talent agencies and Hollywood writers. The company had $231.3 million in profits last year on $3.6 billion in revenue but is under pressure to boost its results amid an influx of private equity investments in the talent agency business over the last decade.

Joshua Tree project: An abandoned iron mine on the doorstep of Joshua Tree National Park could be repurposed as a massive hydroelectric power plan t under a bill with bipartisan support in the state Legislature. The bill is being pushed by NextEra Energy, a Florida-based company, but critics say the Eagle Mountain project would drain desert groundwater and sap springs that nourish area wildlife.

Max problems: Boeing Co. is reportedly facing a probe by the U.S. Securities and Exchange Commission over whether the company properly disclosed to shareholders issues related to its 737 Max airplanes. The SEC action would just be one of myriad problems the Chicago-based plane maker is facing after two fatal crashes by the plane. It’s also paying $2,000 a month to park each of the planes while they await a fix.

Tech upheaval: The world-changing technology of the last 40 years has relied on supply chains crisscrossing the Pacific. But the Trump administration’s decision to blacklist Huawei, China’s largest telecommunications firm and smartphone manufacturer, from doing business in the U.S. or with U.S. suppliers could break those chains, hitting companies and consumers on both sides of the trade war.

WHAT WE’RE READING

And some recent stories from other publications that caught our eye:

Who’s your daddy: It’s good to be the boss. The New York Times says it’s not so hard nowadays being a chief executive, and the pay is great. “Compensation for top bosses grew at double the pace of ordinary workers’ wages, according to our annual analysis. Topping the list: Elon Musk, with a $2.3 billion package.”

Full house: The Wall Street Journal visits Deming, New Mexico, to see what happens when the U.S. Border Patrol drops off migrants. “While townspeople have turned out in droves to volunteer, bringing food, clothes and toys, tensions are flaring. Many wonder how long Deming can afford to be so welcoming.”

Along for the ride: An interesting take from the Atlantic about Silicon Valley’s love affair with Uber. “Uber was the most valuable private company in history, but the public market has not been as enthusiastic. The reason why explains a lot about how the tech industry works.”

Cashing in: From the New Yorker, a look at Rivada Networks, which counts Republican strategist Karl Rove among its investors and aims to cash in on unused Defense Department radio spectrum. “If Rivada’s proposal were to be adopted, it would create a new asset class — bandwidth — that could be traded on the commodities market, like oil or soybeans. And it would make Rivada, which holds patents to run this market (a process known as dynamic spectrum arbitrage), an extremely lucrative company.”

Wealth detective: Bloomberg Businessweek profiles Gabriel Zucman, a French economist who helps track down the hidden accounts of the super-rich. “He encountered data showing billions of dollars moving into and out of big economies and smaller ones such as Bermuda, the Cayman Islands, Hong Kong and Singapore. He’d never seen studies of these flows before.”

SPARE CHANGE

I don’t mind saying that any time I’ve gone up against a Rubik’s cube, the Rubik’s cube won. So it was with more than passing interest that I checked out this Wired video, which purports to explain how anyone — anyone — can learn to unscramble one of these suckers in just seconds. Welcome to the world of speedcubing.

For the latest money news, go to www.latimes.com/business. Mad props to Laurence Darmiento for helping put this thing together.

Until next time, I’ll see you in the Business section.