Newsletter: California Inc.: Culver City pot shop set to go public — in Canada
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.
Markets are closed for Memorial Day, giving investors another day off to digest President Trump’s sudden announcement last week that he was nixing his summit with North Korean leader Kim Jong Un, which may be back on again. They’re also playing a guessing game about Trump’s trade policy toward China. “If I were Chinese officials dealing with the economy, I’d be a little bit worried [that] this is going to usher in a harsher attitude from the U.S. on China trade,” said one analyst.
LOOKING AHEAD
Pot of gold: MedMen, a Culver City company that runs a chain of cannabis dispensaries, is going public in a deal that values the firm at more than $1 billion. Its shares, listed on a Canadian stock exchange, are expected to begin trading this week. More cannabis companies are expected to go public in Canada — where marijuana is federally legal — in coming months.
Code summit: The Code for America Summit, which focuses on the intersection of technology and government, will take place in Oakland from Wednesday to Friday. Speakers include former Obama advisor-turned-techie David Plouffe, former U.S. chief data scientist D.J. Patil and the executive director at Johns Hopkins University Center for Government Excellence, Beth Blauer.
Jobs growth: The Labor Department is expected to report Friday that job growth improved in May, with U.S. payrolls expanding by 190,000 after a gain of 164,000 in April. The unemployment rate is forecast to hold steady at 3.9%, the lowest level since 2000.
Vehicle sales: Motor vehicles sales for May will be released Friday, providing a sense of big-ticket consumer spending. Most major automakers posted lower sales in April as consumer demand continued to weaken and competition intensified following a lengthy sales boom for the industry.
THE AGENDA
Monday’s Business section examines China’s growing wealth gap. The economic might of the mainland’s 31 provincial-level territories ranges from rust-belt areas in the northeast to farming areas in the central plains to Silicon Valley wannabes sprouting up in support of companies such as Alibaba Group Holding, Tencent Holdings and Huawei Technologies. The wide disparity puts some residents at the cutting edge of the developed world. At the other extreme are rural towns where water still needs to be carried on foot from a well.
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:
Mea culpa: Facebook chief Mark Zuckerberg kicked off the European leg of his contrition tour with an apology at the European Parliament for various controversies that have battered the social network’s reputation — from fake news to privacy breaches. But rather than cool hard feelings, Zuckerberg inflamed them, a reminder that resentment against the company runs deep on the other side of the Atlantic.
No brakes: The sensor system was operating normally but the automated emergency braking system on an Uber robot test car was turned off when the vehicle fatally struck a pedestrian in Arizona in March, according to a report issued by the National Transportation Safety Board. The preliminary finding raises serious questions about the state of driverless technology as more autonomous cars hit the road.
Sky high: Southern California home prices in April surged 7.2% from a year earlier to reach an all-time high of $520,000, a sharp increase at a time when mortgage rates are rising. Many economists predict that price appreciation may slow as people find it harder to afford a home, but they don’t see values falling unless the economy takes a turn for the worse.
Rule rollback: President Trump signed bipartisan legislation curtailing some of the Dodd-Frank financial rules put in place after the 2008 financial crisis, but the bill fell well short of his campaign call to dismantle the 2010 law. Instead, with the key support of some Senate Democrats, the regulatory relief focused on small and medium-sized banks that had complained they were unfairly burdened with red tape designed to prevent a future crisis.
Corporate battle: Comcast Corp. is serious about disrupting Walt Disney Co.’s plan to acquire much of Rupert Murdoch’s 21st Century Fox. The Philadelphia cable giant confirmed that it is in the advanced stages of preparing an all-cash offer intended to trump Disney’s $52.4-billion stock bid. The stakes are enormous: The power play could determine which media company will wind up being the dominant entertainment company in Hollywood.
WHAT WE’RE READING
And some recent stories from other publications that caught our eye:
Tawdry tech: From Fast Company, a glance at the dark underbelly of Silicon Valley, which would rather you didn’t think about all the things the tech industry gets wrong. “For almost as long as Silicon Valley has been an idea, there’s been evidence of the kind of bad ideas, bad faith and rapacious greed more associated with much of the rest of the business world.”
The horse they rode in on: The New York Times goes full Bullitt with a look at why Ford is phasing out its passenger cars except for the iconic Mustang. “They’re trying to preserve the sexuality of motoring the way it used to be known,” says one analyst.
Costly lessons: The Wall Street Journal casts a wary eye at America’s growing mountain of student debt. “Due to escalating tuition and easy credit, the U.S. has 101 people who owe at least $1 million in federal student loans … While the typical student borrower owes $17,000, the number of those who owe at least $100,000 has risen to around 2.5 million, nearly 6% of the borrowing pool.”
Lofty ambition: The New Yorker visits Salesforce Tower in San Francisco, which features an LED display that’s intended to be the most prominent public art in the West. “Since construction started, the tower has emerged as an icon of the new San Francisco — techie, ambitious, perhaps a little grandiose — and, like most major construction projects in town, it has been buffeted with wary controversy.”
Fire starter: The Atlantic explores the surprising major role power lines have played in starting brush fires in the West and what can be done about it. “A power line can start a fire if it breaks in the wind. It can start a fire when a tree or a branch falls across it, or when lines slap together, or when equipment gets old and fails without anyone noticing.”
SPARE CHANGE
A nifty take from the NYT on the second lives of those once-ubiquitous red phone booths in Britain (think Dr. Who and Harry Potter). “The iconic phone boxes are now staging something of a comeback. Repurposed in imaginative ways, many have reappeared on city streets and village greens housing tiny cafes, cellphone repair shops or even defibrillator machines.”
For the latest money news, go to www.latimes.com/business. Mad props to Laurence Darmiento and Scott J. Wilson for helping put this thing together.
Until next time, I’ll see you in the Business section.
