15.10.2018


High Hopes for Cannabis Legalization

In less than 48 hours, Canada will become the second country in the world (behind Uruguay) to completely legalize the sale of recreational cannabis. So, what does that mean for the Canadian economy? For one, it’s a huge business opportunity. The Canadian Imperial Bank of Commerce recently predicted that by 2020, Canadian spending on cannabis will exceed our spending on spirits, reaching sales of around$6.5 billion annually. When considering its overall impact on the economy, including employment, TD Economics estimates that legalization will add between $7-8 billion to Canada’s real Gross Domestic Product. From a multinational perspective, Canada’s dive into legalization offers Canadian companies a lucrative opportunity to establish themselves as global leaders in the cannabis industry, just as more countries consider their own legalization (Bernie 2020?). If you’re considering investing in cannabis, make sure to do plenty of research. While many early cannabis investors have been rewarded with attractive returns, there’s a ton of hype around “pot stocks”, which means quite a bit more speculation (read: risk for your bank account) than the stock market as a whole.


You Probably Heard Something About the Stock Market

That’s right. On Wednesday and Thursday, stock markets in the US declined sharply, sparking concern about the economic health of the world’s largest economy, and reverberating onto European and Asian markets. While the American market managed to bounce back slightly on Friday, some experts are warning investors to get used to this type of volatility. As the US’s biggest trading partner, it’s important for Canadian businesses to understand America’s ups-and-downs. So what exactly caused this week’s instability? Experts are pointing to two key factors:

  1. The US-China trade relationship is growing more heated by the day, as the two countries continue to slap reciprocal sanctions on one another. Generally, markets get skittish when they sense a trade war brewing, and that’s especially true when it involves two economic superpowers. All eyes are fixed on the upcoming G20 summit, where Chinese leader Xi Jinping and Trump are scheduled to meet and (hopefully) work things out.
  2. America’s central bank, The US Federal Reserve (Fed for short), which is independent from the political system (ie Trump has no control over it) recently boosted interest rates. Higher interest rates mean businesses and individuals are less likely to spend money, and therefore the economy might slow a little. Trump hasn’t helped matters by lobbing insults at the Fed, further spooking markets.

Truaxe gets the Axe

Deciem, the Canadian beauty brand with a global cult following, has had a turbulent week. On Monday, CEO Brandon Truaxe posted a video onto Deciem’s official Instagram in which he proclaimed that all of Deciem’s operations would be immediately shut down and alluded to “major criminal activities” and “financial crimes” committed by employees. Both the online shop and physical storefronts remained closed for the remainder of the week, concerning employees, customers, and suppliers. That didn’t sit well with Estée Lauder, which owns 28% of Deciem. On Friday, a court sided with Estée Lauder to give Truaxe the boot. Filling the CEO role is Nicola Kilner, who had been fired by Truaxe in April. The judge also agreed to the appointment of PricewaterhouseCoopers to investigate Truaxe’s financial crime allegations. In the meantime, all eyes are on Kilner to salvage the Deciem brand and meet sales expectations that were projected to exceed $300 million by the end of the year. The debacle is drawing comparisons to other *outspoken* CEOs like American Apparel’s Dov Charney and Tesla’s Elon Musk.


And Finally, Some Good News

While we’re not doing a full profile, this week’s #moneycrushmonday goes out to Kathy Warden (Northrop Grumman), Phebe Novakovic (General Dynamics), and Marillyn Hewson (Lockheed Martin).  Together, these womxn are at the helm of three of the five largest aviation and defence corporations globally. This is big news, especially considering the industry’s macho reputation, and the fact that women make up only 24% of the industry as a whole. While corporations have begun to publicly promote their gender diversity efforts in recent years, the amount of womxn actually holding the top job is declining. The amount of female CEOs in Fortune 500 companies is down to 24, from 32 in 2017. What’s more? Almost all of those jobs are held by white women. It’s not news that most major corporations have a diversity problem, but it’s statistics like these that make the achievements of Warden, Novakovic, and Hewson even more worthy of celebration.