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A 17,000-bottle private wine collection including rare Burgundies and Bordeaux went on auction over the weekend and destroyed the previous record by $8 million

Wed, 04/03/2019 - 4:06pm

  • A 17,000-bottle wine collection sold for nearly $30 million over the weekend at a Sotheby's auction, Bloomberg reported.
  • The collection exceeded its estimated sale price by almost $4 million.
  • The sale crushed the previous record for a private wine collection — a highly-anticipated 2016 sale totaling $22 million — by a whopping $8 million.

A recent Sotheby's auction exceeded all expectations: A 17,000-bottle collection spanning nearly five decades sold for almost $4 million more than its estimated sale price.

According to a recent report from Bloomberg, the collection sold for $29.8 million this past weekend at the Tran-scend-ent Wines auction. Estimates leading up to the auction put the collection's anticipated price around $26 million. The auction took place in Hong Kong; China is quickly becoming one of the world's largest wine markets.

The sale set a new record for the highest value private wine collection ever sold at auction, surpassing a record previously held by billionaire Bill Koch's collection. Koch's 20,000-bottle collection sold for almost $22 million at a New York auction in 2016.

This latest Sotheby's wine auction joins the ranks of other high-stakes wine auctions, where single cases have sold for as high as $363,000.

Read more: The top 10 most expensive wines and spirits sold by Christie's in 2018, ranked

This rare collection included "grand cru" — or first-class — Burgundies and Bordeaux from an anonymous owner. According to Bloomberg, Sotheby's has yet to disclose the seller, though he was described as a "fifth-generation property developer."

The past year has seen several record-shattering liquor sales, including a single bottle of 60-year-old Macallan that sold for $1.1 million at auction. The sale set the record for the most expensive bottle of whiskey ever sold, only to be surpassed a month later by another bottle of Macallan, which sold for $1.5 million.

SEE ALSO: There are 3 staples every wine cellar should have, according to an expert at Christie's

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Carl Icahn reportedly dumped his entire Lyft stake ahead of its IPO (LYFT)

Wed, 04/03/2019 - 3:04pm

  • Carl Icahn sold his roughly 2.7% stake in Lyft ahead of its initial public offering, The Wall Street Journal says.
  • Lyft's share price has plunged more than 20% since debuting on the Nasdaq on Friday.
  • Icahn's stake was valued at roughly $550 million at the IPO price of $72.
  • Watch Lyft trade live.

Carl Icahn sold his roughly 2.7% stake in Lyft ahead of last week's initial public offering, The Wall Street Journal says, citing people familiar with the matter. No buyer was reported.

While the motivation of Icahn's sale was not announced, the activist investor may have been put off by Lyft's 2018 operating losses of nearly $1 billion and a dual class share structure which gives the founders Logan Green and John Zimmer de facto control of the company despite holding a minority of shares. Under the structure, the founders have 20 votes per share while other shareholders have one vote per share.

Icahn invested roughly $150 million in Lyft in 2015 when the ride-hailing firm was valued at $2.5 billion. While the exact price at which the sale occurred is unknown, Icahn has likely realized a significant gain given Lyft's $24 billion valuation when it went public.

Lyft's pre-IPO investors, including the founders, are subject to a lock-up which prohibits the sale of shares for 180 days from the March 28 IPO date.

Lyft's early trading has been choppy as short sellers have mounted a massive bet against the company. Analysts have expressed concerns about the company's valuation despite the significant growth potential of the ride-sharing industry.

Shares were down 20% from the $87.24 where they debuted on Friday. 

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Patagonia mocks Wall Street on Twitter after revealing plans to cut financial companies off from their beloved branded fleece vests

Wed, 04/03/2019 - 2:50pm

  • This week, news broke that Patagonia will no longer make new partnerships with financial companies to produce branded fleece vests and other clothing. 
  • On Wednesday, Patagonia mocked Wall Street on Twitter, implying that companies will soon try to improve their social and environmental policies to regain access to the beloved vests.
  • Patagonia fleece vests are a crucial part of bankers' and other finance workers' "Midtown Uniforms," which typically consist of slacks, a dress shirt, and a fleece vest. 

Patagonia isn't satisfied with simply cutting hedge funds and banks off from their beloved fleece vests. Now the American clothing retailer is trolling Wall Street on Twitter. 

This week, news broke that Patagonia decided that it would require new companies that it works with on branded apparel to align with Patagonia's values of being environmentally conscious and prioritizing the planet.

A spokesperson from Patagonia told Business Insider via email that the corporate sales program recently shifted its focus to work with "more mission-driven companies that prioritize the planet."

Read more: The Midtown Uniform is now in peril as Patagonia isn't accepting new finance clients for its ubiquitous fleece vests

Patagonia took to Twitter to mock Wall Street for the panic over the news. The tweet features a screenshot from "Silicon Valley," a show that satirizes the tech industry, including investors' well-documented obsession with Patagonia fleece vests.

 

B Corporations are companies that meet certain standards of social and environmental accountability, and 1% for the Planet is an organization that encourages people and businesses to donate 1% of sales toward environmental causes. Yvon Chouinard, Patagonia's founder, cofounded 1% for the Planet.

Patagonia fleece vests branded with companies' names have become a crucial part of the wardrobes of people who work in the finance industry. In New York City, these vests are part of the "Midtown Uniform" — typically slacks, a dress shirt, and a fleece vest. 

Binna Kim, president of the public-relations company Vested, first reported the news on Monday after she reached out to a certified reseller of Patagonia apparel to purchase branded clothing for a client. The reseller told Kim that Patagonia is now reluctant to partner with companies that they view to be "ecologically damaging," as well as religious groups, food groups, political-affiliated organizations, financial institutions, and more.

However, for financial-services companies that have already penned a deal with Patagonia, there is a silver lining. The change of focus affects only new customers, leaving existing clients with their deals, a Patagonia spokesperson said.

SEE ALSO: How the fleece vest became the unofficial uniform of Silicon Valley investors

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Peter Thiel-backed digital bank N26 is considering a cash back-type offering as it eyes US expansion

Wed, 04/03/2019 - 2:46pm

  • N26, a European digital bank, is considering developing some type of earn-as-you-spend offering as part of its launch in the US scheduled for later this year. 
  • Nicolas Kopp, US CEO of N26, told Business Insider the fintech needs to address US consumers' desire to get something in return for using a specific card or banking product. 
  • The digital bank raised $300 million in Series D in January to value it at $2.6 billion, making it the most valuable fintech in Europe. 

N26 has built a successful digital banking business in Europe that's helped it nab over $500 million in funding and a $2.6 billion valuation

But as it prepares for a launch in the US later this year, the Peter Thiel-backed fintech is considering ways to better appeal to American clients. 

Nicolas Kopp, US CEO of N26, told Business Insider one nuance between the US and European markets is American customer's expectation of some type of points program with their banking products.

"Another thing that we need to address is this attitude of a lot of US consumers around earn as you spend," Kopp said. 

Read more: A Peter Thiel-backed fintech that aims to be 'a mixture of Venmo, Zelle, Mint and Chase' is launching in the US

N26's standard account in Europe currently doesn't have any points or cash-back programs, Kopp said. N26 Business, which is geared toward freelancers or the self-employed, does offer .1% cashback on purchases made with the account's Mastercard. 

Kopp declined to comment on how exactly how N26 would roll out the program beyond saying it would function slightly differently than a traditional points program typical of many credit cards. 

"We are thinking through an alternative to how we can allocate to that side of the US audience that is very aware of what they get in return for using a specific card or banking product," Kopp said. 

Points and cash-back programs that incentivize spending have become almost table stakes among banks and credit cards in the US. JPMorgan Chase's Sapphire Reserve card, which launched in 2016, kicked off a fight amongst firms to tap into an industry that has $183 billion in fees and interest. 

Nowadays, seemingly any new banking product has some type of earn-as-you-spend feature. Apple's recently launched credit card will have 2% cash back. 

However, cash-back programs are a double-edge sword as so-called 'super users' of the card are able to rack up big rewards, cutting into credit card companies' profit margins

Sign up here for our weekly newsletter Wall Street Insider, a behind-the-scenes look at the stories dominating banking, business, and big deals.

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Verizon's 5G service is here, but Apple could take over a year to build a compatible phone (AAPL)

Wed, 04/03/2019 - 2:46pm

  • Apple likely won't have its 5G phone ready next year unless its ongoing legal battle with Qualcomm is settled in a few months, UBS analysts said in a report out Wednesday.
  • Verizon announced later on Wednesday that it was launching 5G coverage in Chicago and Minneapolis.
  • Apple competitors Samsung and LG have debuted their first 5G phones, while the Chinese telecommunications giant Huawei has announced plans to enter the space.
  • Watch Apple trade live.

As the race to get in on 5G intensifies, Apple may not have a phone with the new technology available anytime soon unless its legal battle with the chipmaker Qualcomm is quickly resolved, UBS analysts speculated in two reports to clients out Wednesday.

"Barring a settlement with Qualcomm in the next few months, field work suggests Apple is increasingly in jeopardy of being unable to ship a 5G iPhone in 2020," a team of analysts led by Timothy Arcuri wrote to clients on Wednesday.

The note was distributed just before Verizon announced on Wednesday that it had launched 5G coverage in Chicago and Minneapolis. The fledgling wireless technology has been touted for years as the better, faster "evolution" of 4G LTE technology we all rely on for streaming and browsing the web, and it's finally beginning to come to market — for some.

The company's inability to offer a 5G phone next year could be a near-term challenge as Apple is already grappling with slowing iPhone sales, the analysts said. Still, they believe an improving iPhone replacement cycle could cushion the blow of missing out on the 5G party.

"While it is possible/likely this continues to lengthen, AAPL remains steadfast in its estimate that actual upgrade rates are < 3 yrs which suggest we are now actually below full replacement rates — a factor which should soften any potential impact from the lack of a true 5G phone in 2020," they said. 

Apple competitor Samsung unveiled a foldable phone earlier this year that costs about $2,000 and can take advantage of the 5G mobile network. It is expected to arrive later this month. Additionally, LG also debuted a 5G phone back in February, and said it should hit the market in the first half of this year.

In a separate report out Wednesday, a different team of UBS analysts asked whether it even mattered that Apple might be falling behind.

"We already question the benefits of 5G for smartphones and believe signs of AAPL being willing to delay adoption to 2021 suggests it might share our concerns and is not very concerned about share loss from not having 5G," analysts led by Bill Lu said.

Earlier this week, Apple slashed the price of its iPhones in China amid stiff competition from local competitors Huawei and Xiaomi.

Apple shares were up 23% this year. However, they're still trading 17% below October's record high of $233.47. 

Read more Apple coverage from Markets Insider and Business Insider:

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Investors are hot on hedge funds again, but old-school stock pickers are getting left in the cold

Wed, 04/03/2019 - 2:35pm

  • Despite coming off one of the worst performing years on record, hedge funds are enjoying renewed interest from investors, who believe there is a market slowdown coming, a JPMorgan survey finds.
  • But the one type of fund that hasn't seen a surge in interest is the one that the industry was built on: fundamental long-short equity. 
  • Investors prefer to get equity exposure in their hedge fund portfolios through quant strategies, the survey shows, and managers like Jana Partners and BlueMountain Capital have already cut back on their stock-picking products this year. 

The hedge fund industry's exponential growth over the last couple of decades can be at least partially be attributed to the near-mythological status that the early top stock-pickers enjoyed among investors.

Tens of billions poured into these funds and their spin-offs, as investors trusted investors like Tiger Management founder Julian Robertson to win big bets in the stock market.

Now, investors are turning to machines over people for their stock hit, and asking hedge funds still run by humans for strategies that can't be replicated by a computer. 

Despite bounce-back performances from well-known stock-pickers like David Einhorn and Bill Ackman this year, money has flowed out of these funds faster than any other category — bleeding more than $6 billion through February, while the overall industry is up $1.6 billion, according to eVestment. Last year, the category saw $10.7 billion leave in net redemptions. 

For the remainder of 2019, investors want to increase their investments in the hedge fund space, a survey of JPMorgan's institutional investor clients shows, but for equity strategies, quants are preferred, as investors favor the transparent and unemotional way they invest.

See more: A bunch of hedge fund managers featured in 'The Big Short' are among the casualties of Citadel's most recent cuts

Only 13% of investors in J.P. Morgan survey want to decrease their allocations to hedge funds this year, while 32% plan to increase — primarily because they see a slowdown coming in the markets, and want to build up a hedge against it in their portfolios. A new Preqin study similarly found that 61% of institutions believe equity markets are "at their peak." 

Old-school stockpickers, who are supposed to protect against market downturns with their short positions, will not have nearly as many investors fighting to invest more with them this year, according to JPMorgan. Nearly a third of investors, on an asset-weighted basis, plan to decrease their stock-picking allocations this year, compared to only 10% that plan to increase it. 

“Beta has been cheap and effective for the past decade," said Michael Monforth, global head of JPMorgan's capital introductory group, about why investors no longer want many large funds' bread-and-butter strategy. The challenge many funds have had in making money on their shorts has also convinced investors to either move their hedge fund money out of equities entirely or into quant funds. 

Managers have responded already in 2019. Jana Partners closed its stock-picking fund to focus on its activism efforts, and BlueMountain Capital Management cut its long-short fund after just two years of trading

Quant equity funds are still a hot commodity in investors' eyes, and 21% plan to increase their allocation to computer-controlled funds compared to just 6% decreasing. Strategies that are "agnostic to the markets" can also expect to pick up assets from people leaving stock-picking funds, said Monforth. 

See more: The explosive growth of quant investing is paving the way for 'super managers' in the hedge-fund industry

At Aberdeen Standard Investments, the firm's clients have interest in more complex hedge fund strategies, such as private debt, because it is hard to replicate with an algorithm or factors, said Darren Wolf, head of alternative investment strategies for the Americas at Aberdeen. 

"There’s a high barrier to entry in those fields, unlike long-short equity, because in alternative credit you need higher starting capital, trading relationships, infrastructure, and more to pull off these types of securities and investments," he said. 

Multi-strategy behemoths like Point72 or Citadel built around their long-short strategies can take solace in the fact that investors are interested in staying with managers they have already been working with, according to Monforth. Investors are not leaving the hedge fund industry because they are frustrated with a stock-picking strategy, he said.

"You don’t sell your car if you have a flat tire, you fix the flat tire," he said. “It’s like going with the manager you know, because there’s already a relationship there, and investors can potentially push for more transparency or a better fee structure by staying at the same manager.”

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It's 'inevitable' that a self-driving car will kill someone. Here's why a VC thinks we should be investing in them anyway. (BA, GOOGL, TSLA)

Tue, 04/02/2019 - 11:57pm

  • Failures in emerging autonomous transportation systems have already led to people's deaths.
  • We should expect more such tragedies in the future, said Shahin Farshchi, a partner with venture firm Lux Capital, which has backed numerous startups in the self-driving car space.
  • But such incidents haven't dissuaded Farshchi about the industry's potential.
  • Autonomous vehicles could transform the way people get around and save lots of lives in the process, he said.
  • He's concerned, though, that high-profile accidents could warp people's perception of the risks and benefits of the technology.

People have already died as a result of failures in transportation-related autonomous systems and more will likely die in the future.

While incidents such as the crash of an Uber self-driving car last year and that of two Boeing 737 Max airplanes in the last six months concern Shahin Farshchi, they haven't dissuaded him about the potential for autonomy, particularly when it comes to vehicles. Farshchi's firm, Lux Capital, has made numerous bets on self-driving cars and related technologies, including in high-profile startup Zoox, and he's open to more such investments in the future.

Deaths that result from failures in autonomous systems are tragedies, Farshchi, a partner at Lux, said in an interview with Business Insider on Monday. But accidents like those involving Uber and Boeing "would not dissuade us or scare us or make us less interested in investing in these kinds of technologies."

Part of the reason why Farshchi remains optimistic about the industry is because he believes autonomous systems have the potential to revolutionize the way people get around. He expects that within about five years ride-sharing services such as Uber and Lyft will account for roughly one third of all miles traveled. Of those ride-sharing miles, about 10% by then will be driven by autonomous vehicles, he predicts. And that amount will only increase over time.

The basic technical challenges have been solved

His bullishness also stems from his belief that the fundamental technical challenges of creating autonomous cars are largely solved. What's left, in terms of technology obstacles, is developing the autonomous systems so that they go from being mostly reliable to almost always working and being reliably predictable when they won't work.

"All of the individual components of this problem have been solved," said Farshchi, who worked as an engineer at General Motors earlier in his career. "It's a matter of how you bring it together and harden it to make it reliable and roll it out in a way that's ultimately going to be profitable."

Read this: AI could soon be all around us — here's how that could upend 8 different industries

Part of that roll out process is going to have to involve educating the public and regulators about the potential safety benefits of autonomous cars. More than 37,000 people died in US traffic fatalities in 2017 alone, according to the National Highway Traffic Safety Administration. And the leading causes of accidents are related to driver errors — something autonomous systems promise to eliminate.

"With the problem being big enough and the thousands of people that are killed every year in the United States ... I think that motivation is large enough to get this technology out there for everyone to benefit from safer, more reliable, more available transportation," Farshchi said.

Accidents could warp public perception

Accidents such as those involving the 737 Max airplanes and the Uber car represent a tragic reality that could ultimately make the world safer and a danger, he said. The industry has an opportunity and responsibility to better understand how these kinds of systems work in the real world and to develop better ways to deploy and test autonomous systems, he said.

But there is a risk that such incidents warp the public perception of autonomous vehicles. These systems aren't perfect and accidents will happen, he said. The big question is whether the public and regulators will keep such incidents in perspective.

"It's going to be inevitable that you're going to have a driverless car who hits the child or the pet, that caused a catastrophic and a tragic loss, and so it's a question of how the public perception will change as a result," he said.

What people are going to have to keep in mind is that "business as usual, which is human drivers ... cause a lot of death and injuries already as it is today."

SEE ALSO: This VC says a shakeout is coming to enterprise software because titans like Oracle and Salesforce have 'account control' that no startup can match

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Video appears to show a Tesla Model S traveling on the road at speed with no one in the driver's seat (TSLA)

Tue, 04/02/2019 - 11:43pm

  • Video showing a Tesla Model S driving at speed on a road with no one in the driver's seat circulated on social media Tuesday night.
  • The luxury electric car appeared to be operating on Autopilot, Tesla's semi-autonomous-driving technology that allows its vehicles equipped with the feature to steer, accelerate, brake, and change lanes with driver supervision.
  • At one point, a camera pans around the cabin to reveal a person lying down in the back seat.
  • Videos showing Tesla drivers asleep or otherwise preoccupied behind the steering wheel are fairly common, even as the carmaker implores its customers to remain in control of their vehicles while operating them on Autopilot.

Video showing a Tesla Model S driving at speed on a road with no one in the driver's seat circulated on social media Tuesday night.

The luxury electric car appeared to be operating on Autopilot, Tesla's semi-autonomous-driving technology that allows its vehicles equipped with the feature to steer, accelerate, brake, and change lanes with driver supervision.

At one point in the video, the camera pans toward the windshield to show the car is traveling at speed down a two-lane road. The digital instrument cluster can be seen with "115" displayed, but it was not immediately clear whether that number represented miles-per-hour, or kilometers-per-hour.

People are really stupid / this is why we can’t have nice things / WTF?! / Darwin at work pic.twitter.com/wU91HENOQH

The Midtown Uniform is now in peril as Patagonia isn't accepting new finance clients for its ubiquitous fleece vests

Tue, 04/02/2019 - 5:10pm

  • Patagonia is limiting the number of new customers it is branding its apparel for, choosing to work only with companies that align with environmentally-conscious values.
  • A Patagonia spokesperson said while the company has recently shifted its focus to target companies that prioritize the planet, current customers of all industries will be able to continue to work with them. 

Business bros be warned: A key part your workplace attire is in jeopardy of going extinct. 

Patagonia, which has become a staple of the "Midtown Uniform" (slacks, a dress shirt and a fleece vest), is no longer in the business of branding Wall Street. 

The American clothing company recently decided a requirement of new companies it works with will be that they align with Patagonia's values of being environmentally conscious and prioritizing the planet. 

The company's decision came to light Monday when Binna Kim, president of public relations company Vested, tweeted that Patagonia had informed her it was no longer producing branded vests for financial services companies.

Kim told Business Insider she had reached out to a certified reseller of Patagonia apparel making branded clothing for a client. The reseller, which is required to get approval from Patagonia, told Kim it couldn't fulfill the order because Patagonia was focusing on co-branding with "a small collection of like-minded and brand aligned areas".

"Due to their environmental activism, they are reluctant to co-brand with oil, drilling, mining, dam construction, etc. companies that they view to be ecologically damaging," the reseller told Kim via email, which she posted to Twitter. "This also includes any religious group/Churches, food groups, political affiliated companies/groups, financial institutions, and more." 

The end of the #fintech uniform?! Farewell #patagonia vests. pic.twitter.com/3PpykELkZb

— Binna Kim (@binnaskim) April 1, 2019

A spokesperson from Patagonia told Business Insider via email the corporate sales program recently shifted its focus to work with "more mission-driven companies that prioritize the planet." The change of focus only impacts new customers, as existing clients would not be impacted, the spokesperson added. 

Fleece zip-up vests have become staple of the corporate world in recent years. The outfit has become so popular it spawned its own Instagram account — dubbed Midtown Uniform — that has over 112,000 followers.

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Blue Apron is soaring after its CEO steps down (APRN)

Tue, 04/02/2019 - 4:52pm

  • Blue Apron CEO Brad Dickerson has left the company to pursue other opportunities.
  • He will be replaced by Linda Findley Kozlowski, Etsy's former chief operating officer.
  • Blue Apron shares were up more than 15% after the announcement.
  • Watch Blue Apron trade live.

Blue Apron was soaring on Tuesday evening, up more than 15% to $1.12 a share, after the company announced CEO Brad Dickerson has left the meal-kit maker to pursue new opportunities. He will be replaced by Linda Findley Kozlowski, who was most recently the chief operating officer at Etsy.

"We are incredibly excited to have an executive of Linda's caliber as Blue Apron's next CEO," Matt Salzberg, the chairman of Blue Apron's board of directors, said.

"Linda’s exceptional leadership and marketing expertise, as well as her understanding of Blue Apron customers as a long-time customer herself, will help her advance the company towards sustainable, profitable growth," he added.

Blue Apron has had a difficult time as a publicly traded company since its June 2017 initial public offering. First, Amazon announced plans to buy Whole Foods, causing Blue Apron to slash its IPO range to between $10 and $11 a share, down from $15 to $17, as investors worried about the competition such a deal would bring. Then, less than a month later, Amazon rolled out its own meal-kit business

More recently, the meal-kit maker has had trouble holding onto customers. Last August, Blue Apron said its total number of customers plunged by 24% year-over-year in the second quarter and that revenue per customer was down by $1 to $250. At that time, the stock was trading near $2 a share.

And in December, Blue Apron tumbled to a low of $0.65 before a partnership with Weight Watchers ignited a rally to more than $1.60. After giving up some of those gains, shares hovered near the $1 level for much of the past month before Tuesday evening's news sent them to their best level since the end of February.

Blue Apron was down 5.3% this year through Tuesday's closing bell. 

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Andreessen Horowitz, one of Silicon Valley's most prominent tech investors, is renouncing its status as a venture-capital firm

Tue, 04/02/2019 - 4:30pm

  • The Silicon Valley stalwart Andreessen Horowitz is renouncing its status as a venture-capital firm as it moves closer to the world of financial services, cofounder Marc Andreessen told Forbes. 
  • All 150 firm employees and partners will register as financial advisers.
  • The differentiation allows the firm to make higher-risk investments in areas that the Securities and Exchange Commission says requires more oversight, such as cryptocurrency or token sales.

Andreessen Horowitz, one of Silicon Valley’s flagship institutional tech investors, has renounced its status as a venture-capital firm and is in the process of registering as a financial adviser. 

Cofounder Marc Andreessen told Forbes that the entire firm will register as financial advisers. The new approach allows the firm to take larger, riskier bets in the markets for emerging technologies that the Securities and Exchange Commission (SEC) says requires more oversight, including cryptocurrency.

Read more: Andreessen Horowitz is launching a $300 million fund to invest in crypto — and it hired its first-ever female general partner to lead the effort

Traditionally, venture-capital firms are allowed to invest in shares of private startups — generally considered to be high-risk assets — because of a special exemption to SEC regulations that doesn’t require it to play by quite the same rules as a traditional financial-services firm. By waiving that exemption and getting its employees certified as financial advisers, Andreessen Horowitz is able to broaden the types of investments it can make.

That means that Andreessen Horowitz will be allowed under SEC rules to do things such as hold a portfolio of cryptocurrencies or take a position in a public company, neither of which it was allowed to do previously. In short, it makes Andreessen Horowitz a little bit more like a financial-services company. 

According to Forbes, the firm is also in the process of closing a new growth fund that will add $2 billion to $2.5 billion for David George, the firm’s newest partner, to invest across its existing portfolio and other high-growth startups.

Andreessen founded the firm in 2009 with his former colleague Ben Horowitz after selling Opsware to HP in 2007. Since its founding, the namesake firm has generated an estimated $10 billion in profits for investors. The firm was an early investor in Lyft, which went public in March, and expects no fewer than four additional portfolio companies to go public over the next year, including Airbnb, PagerDuty, Pinterest, and Slack. Andreessen himself was also an early investor in Facebook and sits on the company's board.

Read the full interview with Marc Andreessen in Forbes here>>

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GameStop is sinking after the company said it won't issue annual earnings guidance (GME)

Tue, 04/02/2019 - 4:28pm

GameStop shares plunged more than 7% in after-hours trading on Tuesday after earnings results fell short of analysts' estimates. The company also said it will not offer earnings per share guidance to investors.

"Given the planned cost savings and profit improvement initiative and the announcement of a new CEO starting on April 15, 2019, the company is not providing annual earnings per share guidance at this time," the company said in a release.

Here's what GameStop reported, compared with what analysts surveyed by Bloomberg expected.

  • Adjusted earnings per share (EPS): $1.45 versus $1.58.
  • Revenue: $3.1 billion versus $3.27 billion.
  • Comparable sales: +1.4% versus -2.1%.

On Monday, GameStop announced an agreement with two activist investors, Hestia Capital Partners and Permit Capital Enterprise Fund, that would add two new independent investors to its board.

The report comes as the company's shares trade near the lowest level since 2005, having crashed earlier after GameStop's board earlier this year terminated plans to sell the company. The Texas-based consumer electronics chain has struggled to stay relevant in a changing gamer landscape

GameStop has fallen 20% this year through Tuesday's market close.

Read more markets coverage from Markets Insider and Business Insider:

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California marijuana company Vertical is talking to banks about an IPO for its CBD business and just raised a fresh $58 million in preparation

Tue, 04/02/2019 - 4:25pm

Vertical, a California marijuana producer, closed a $58 million funding round to lay the groundwork for its hemp and CBD spinoff to go public on the NASDAQ this year.

The series A round was upsized from $20 million to $35 million last year and was still oversubscribed due to investor demand, the company said. The round was led by Merida Capital Partners, a New York City private equity fund that exclusively invests in the cannabis industry, with the rest of the capital coming from a mix of high-net-worth individuals and family offices.

Smoke Wallin, Vertical's president and the CEO of the incoming CBD spinoff, Vertical Wellness, told Business Insider in an interview that despite widespread interest from institutional investors, the bulk of the round came from family offices that aren't bound by the same rules that a large private equity fund or hedge fund typically is.  

Read more: Lawmakers just took a huge step toward passing a critical bill that could pave the way for banks to work with marijuana companies

Wallin said while they met with a lot of special situation groups at larger hedge funds — which he said have a "broader mandate" to pursue unique investments — they didn't end up participating in the round. 

"We got great meetings and spent a lot of time getting them up to speed on our industry and then obviously our company," said Wallin. "But at the end of the day, their in-house counsel and outside law firms couldn't see a way to go forward given the federal prohibition that it still exists. That was pretty much universal." 

Vertical will use the new capital to build out new grow facilities on their California campus, and finish building a food and beverage manufacturing facility, said Wallin. 

"These are some of these things you might say, well, why are you raising equity to do capex [capital expenditures] and to build buildings," said Wallin. "Well, that's because we're in cannabis, right? Like you can't go get a mortgage, you can't get normal financing on equipment" like in any other industry. 

Most THC-touching cannabis companies in the US are unable to use debt financing for any capital expenditures because THC is federally illegal, and banks are unwilling to risk working with the industry. 

Congress is debating a few pieces of legislation, namely, the SAFE Banking Act, that would alleviate some of these problems but the bill's path through the Republican-controlled Senate looks uncertain.

Read more: The CEO of Whole Foods just dropped a hint it could soon start carrying marijuana products. It's a sign the biggest consumer companies are 'looming' over the industry.

Since the Farm Bill passed last year, hemp and hemp-derived CBD were legalized in the US, and the Food and Drug Administration is working on a pathway to allow CBD to be added to food products

While Vertical will remain focused on California, which Wallin said is the biggest cannabis market, the company is also investing in assets in Arizona and Ohio which both recently legalized medical marijuana.

"But we eventually want to have a foothold in all the legal states," said Wallin.

What Wallin said sets Vertical apart from other cannabis companies — namely, the big publicly traded Canadian companies like Canopy Growth and Aurora Cannabis — is that they look for "distressed" deals, where the operators may hold a valuable license but may not be operating efficiently. 

"Then we'll step in and fix that," said Wallin. "The difference between me and the Canadians is that we don't overpay."

An IPO in the fourth quarter of this year 

Wallin said he's looking to raise another $50 million in a private round in the coming months to prepare for the initial public offering. He's aiming for the IPO to happen in the fourth quarter of this year, though he cautioned that "would obviously be very fast."

Though Vertical has not selected bankers for the IPO, Wallin said he's in talks with Cowen and Canaccord Genuity, which have been active in the sector. He's also had discussions with major bulge bracket banks who see the Farm Bill as a path to getting involved in the CBD side of the industry. 

"I think we'll meet all the criteria that NASDAQ would require," said Wallin. "So the idea is to get everything lined up and have scale. We'll be very, very profitable next year — so I think we'll have a great story to tell the street." 

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A $23 billion drugmaker and a $2 billion biotech upstart are racing to develop a type of 'silver bullet' drug for aggressive cancers that has eluded their industry for 30 years

Tue, 04/02/2019 - 4:20pm

  • Pharmaceutical companies long wanted to develop a drug that would target KRAS, a common gene mutation seen in cancers. But every effort so far has failed.
  • The pharmaceutical company Amgen and biotech Mirati are backing two new drugs that are raising those hopes again, though it's still early days.
  • If these experimental products are successful, they could rake in billions in sales and help patients with few treatment options. 

The pharmaceutical industry has spent 30 years and wasted billions of dollars chasing a type of cancer drug in a quest that some have declared impossible.

Today, though, it's back, with two drugmakers racing to see if theirs is the winning approach. Though it's early days still, their focus and potential has the industry abuzz. 

There is "huge enthusiasm for figuring out how to drug that pathway," SVB Leerink analyst Andy Berens told Business Insider. He called this and another cancer-fighting approach "probably the silver bullet," adding that it "would be a tremendous victory for biotech and oncology, if it works."

Behind all this is the KRAS gene, which works in the body as a traffic light that signals the go-ahead for cells to grow and change. Mutations in the gene, though, could turn cells cancerous — and give them the green light to grow explosively.

Read: Pfizer has a new strategy for fighting cancer that could generate $5 billion a year. We got a look inside.

Indeed, KRAS mutations are common, seen in lung, pancreatic and colorectal cancers, among others. 

Stopping that mechanism has been the aim of scientists for a long time, but their lack of success has led many to think that it is "undruggable." 

One of those companies is also leading the renewed focus on KRAS: the $23 billion pharmaceutical company Amgen. Amgen has started testing its drug, AMG 510, in humans in a early-stage research trial, and initial results — expected this summer at a prominent cancer-research meeting — are hotly awaited.

If the drug is promising, Wall Street expects sales of at least $1 billion or $2 billion a year. 

The $2.5 billion biotech Mirati Therapeutics is also racing to develop its own KRAS-targeting drug, and its shares have surged nearly 65% since the start of the year, when Amgen began talking up the potential of AMG 510. Mirati hasn't yet tested its product in humans but isn't far behind, analysts say.

A discovery made from a 'library' of new potential drugs

Amgen believes that AMG 510 works in a unique way that makes it more powerful, and thus could set it apart from other, failed drug development efforts. 

The experimental drug came out of a collaboration that the pharmaceutical company had with the Berkeley, California-based biotech Carmot Therapeutics, developing "libraries" of new molecules that could one day be new drugs. 

The companies focused that effort on a specific mutation, KRASG12C. Amgen estimates that it is a relatively common mutation, making up about 12% of all KRAS mutations across different types of "solid tumor" cancers. 

Amgen is interested in studying the drug in lung cancer and likely in colorectal cancer, as well as other solid tumors.

What excited the company about AMG 510 was way it behaved with the protein, doing a type of dance that opened up a flap in the molecule and exposed a deep pocket.

That pocket lets the drug get in, where it should be able to keep a firm hold and prevent KRAS from giving that "green light," explained Dr. PK Morrow, Amgen global product general manager and team lead for AMG 510.

Potential in lung and colorectal cancers

If it works, it could be an option for patients with non-small cell lung cancer, the most common type, for example, as a second or third treatment option where "the options are often quite limited," Morrow said. 

"This has been a program that has created within our company such a sense of true excitement and gratification for being able to develop something that has the potential to help patients in such grievous need," Morrow told Business Insider. 

AMG 510 also has potential as a combination, Amgen believes, and is being studied in animal research with another Amgen drug, Vectibix, something that could potentially be used in colorectal cancer. 

But, like with all drug development, there's no guarantee that these results will be as promising in humans. 

And being able to block the KRAS pathway, meanwhile, "doesn't necessarily mean it’ll translate to the tumor dying and patients having improved outcomes," SVB Leerink's Berens said. 

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Boeing is ramping up inspections after the US Air Force rejected its new KC-46 tanker planes again (BA)

Tue, 04/02/2019 - 4:03pm

  • The United States Air Force has once again rejected taking delivery of new Boeing KC-46 Pegasus tanker jets after discovering foreign object debris (FOD) left inside the aircraft by Boeing workers.
  • According to the USAF, its inspectors found tools and other debris inside the planes.
  • This is the second time in a month the Air Force has halted delivery of the KC-46 for the same reason.
  • Boeing delivered its first KC-46 tanker in January. 

The United States Air Force has once again rejected taking delivery of new Boeing KC-46 Pegasus tanker jets after discovering foreign object debris (FOD) left inside the aircraft by Boeing workers. This is the second time the USAF has stopped accepting deliveries of new KC-46s this year for the same exact reason, Reuters reported. 

The Air Force initially halted deliveries of the Boeing 767 airliner-based tanker planes for two weeks in early March. At the time, assistant secretary of the Air Force for Acquisition, Will Roper, told reporters that debris such as tools was left in parts of the plane that could be a potential safety hazard, Defense News reported. 

According to Reuters, the Air Force decided to halt deliveries again on March 23. 

"The Air Force again halted acceptance of new KC-46 tanker aircraft as we continue to work with Boeing to ensure that every aircraft delivered meets the highest quality and safety standards," a USAF spokesperson told the Air Force Times in an emailed statement. "This week our inspectors identified additional foreign object debris and areas where Boeing did not meet quality standards."

Read more: FAA expects Boeing to come up with new software to fix the grounded 737 Max in a matter of weeks.

"Resolving this issue is a company and program priority — Boeing is committed to delivering FOD-free aircraft to the Air Force," Boeing told Business Insider in a statement. "Although we’ve made improvements to date, we can do better."

"We are currently conducting additional company and customer inspections of the jets and have implemented preventative action plans," the Boeing statement went on to say. "We have also incorporated additional training, more rigorous clean-as-you-go practices and FOD awareness days across the company to stress the importance and urgency of this issue. Safety and quality are our highest priority."

Boeing commenced deliveries of the KC-46 tanker in January. The plane was originally slated for delivery to the Air Force in 2017. However, development delays pushed the plane's entry into service back. 

The KC-46 is expected to replace the USAF's aging fleet of Boeing 707-based KC-135 tankers.  

SEE ALSO: Boeing just unveiled how it's going to fix the 737 Max that was grounded after 2 fatal crashes in recent months

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Car insurance rates are going up for women across the US — here's where they pay more than men

Tue, 04/02/2019 - 3:43pm

  • Men and women pay different car insurance rates in many US states.
  • In 2016, women's car insurance rates were higher than men's in 12 states, according to an analysis by car-insurance comparison site The Zebra.
  • By 2018, women paid more for car insurance in 25 states, and the cost disparity is growing.
  • California recently joined five other states in banning gender-based car insurance pricing.

It turns out many insurance companies care whether or not you drive like a girl. 

In 44 US states, insurance companies can use gender to determine a driver's car insurance rate. There's a lot of opposing data about whether men or women are riskier on the road, but insurers often use their own research to determine car-insurance premiums, which has led to widespread disparities. 

Car insurance rates are also based on age, credit, car make and model, driving record, and location. The average price of car insurance premiums nationwide is $125 a month.

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But a new analysis by car-insurance comparison site The Zebra reveals that in 2018 women paid more for car insurance on average in 25 states, while men paid more in 20 states and Washington DC.

Earlier this year, California banned gender-based car insurance rates, joining five states — Hawaii, Massachusetts, Montana, North Carolina, and Pennsylvania — that already prohibit the practice.

Here's who paid higher car insurance rates in every state in 2018:

Though the total number of states where women pay more versus where men pay more is nearly the same, it wasn't that way just two years ago.

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According to The Zebra, women paid more on average in just 12 states in 2016. The Zebra concluded that women's rates are increasing compared to men's in many places and the cost differences are also becoming more stark. In Nevada, for example, women paid just $14 more on average than men in 2016 compared to $121 more in 2018.

Here's who paid higher car insurance rates in every state in 2016 vs. 2018:

The Zebra's analysis used the following base profile to compare insurance rates: A 30-year-old single male or female driving a 4-year-old Honda Accord EX with a good driving history; coverage limits of $50,000 bodily injury liability per person, $100,000 bodily injury liability per accident, and $50,000 property damage liability per accident with a $500 deductible for comprehensive and collision.

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Senate investigating whistleblowers' claims that government safety inspectors who approved Boeing's 737 Max plane lacked sufficient training (BA)

Tue, 04/02/2019 - 3:07pm

  • Senators wrote a letter to the Federal Aviation Administration on Tuesday saying that agency whistleblowers have come forward with potential safety issues.
  • The Committee on Commerce, Science and Transportation said the workers point to a lack of training in aircraft certification programs that lead to the approval of Boeing's 737 Max aircraft.
  • Boeing is the source of multiple government investigations after the plane crashed twice since October. 

The Senate transportation committee said Tuesday that multiple whistleblowers have warned of serious safety issues in the government’s safety inspection program for new aircraft, including Boeing's 737 max jet that’s crashed twice since October.

"Allegation from these whistleblowers include information that numerous FAA employees, including those involved in the Aircraft Evaluation Group (ARG) for the Boeing 737 MAX, had not received proper training and valid certifications," the Committee on Commerce, Science and Transportation said in a letter to the FAA’s acting administrator on Tuesday. 

"Some of these FAA employees were possibly involved as participants on the Flight Standardization Board (FSB)," the letter continued. 

The committee, led by Republican Roger Wicker of Mississippi, says it’s concerned this lack of training could have lead to "an improper evaluation" of the Maneuvering Characteristics Augmentation System (MCAS), which investigators have said is a leading suspect in the investigation of Ethiopian Airlines crash in March. The letter comes after the Department of Justice in March subpoenaed Boeing as part of a criminal investigation into how the deadly plane was certified to fly.

Read more: JPMorgan warns Boeing's 737 Max crisis could drag down the entire US economy

Last week, multiple reports said the FAA would soon announce changes to its aircraft certification program, which currently allows manufacturers to run some safety checks on their products in the FAA's name, in light of the crashes

"According to the information obtained from whistleblowers and a review of documents obtained by the committee, the FAA may have been notified about these deficiencies as early as August 2018,” the letter said. "Furthermore, the committee is led to believe that an FAA investigation into these allegations may have been completed recently."

You can read the Senate committee’s full letter below:

Wicker Elwell Letter by Graham on Scribd

 

SEE ALSO: Boeing's 737 Max crisis could have a bigger effect on the US economy than the government shutdown

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Here's the pitch deck a New York startup used to raise $5.5 million to expand its apartment-rental service

Tue, 04/02/2019 - 2:49pm

  • UpTop, a New York startup, just unveiled its housing-rental service.
  • Renters can use UpTop's service to view listings, apply for apartments, and pay rent.
  • Landlords can use UpTop to manage their properties and do background checks on prospective tenants.
  • The company just announced that it had raised $5.5 million in seed funding to expand its service.

Landlords and tenants are often at odds, but the creators of UpTop think they've come up with a rental-market service that both groups will love.

Using the New York startup's app, renters can search for apartments, schedule times to view them, apply to rent them, sign leases, and even pay their rent. Landlords can list their properties in UpTop's marketplace and use its property-management service for free.

"It's not just a listing site. It's not just property-management software," Jonathan Foux, UpTop's chief marketing officer, told Business Insider, adding, "We combined it all into one."

CEO Frank Barletta got the idea for UpTop from his experience as a renter, Foux said. In one eight-year period, Barletta moved 10 times and was repeatedly frustrated with the rental experience, he said.

UpTop plans to make money in part by charging a convenience fee when people pay their rent through its service. Depending on what the landlord decides, sometimes renters will pay the fee, and sometimes the landlord will. It also plans to charge landlords for background checks on prospective tenants, something it will offer as an optional service.

The company has only about 1,000 listings so far, but that's because it just started publicizing its service, Foux said. Founded about three years ago, UpTop was until recently testing its offerings in Ithaca, New York.

It plans to soon offer its service in a lot more places. The company announced last week that it had raised $5.5 million in seed funding from KAL Investments. It's used that money to expand its team to 16 people, building out its product and business development teams, Foux said.

Read this: Here's the pitch deck a Virginia startup used to raise $6 million after seven years of bootstrapping its business

Though UpTop is based in Manhattan and is born out of Barletta's experiences in the rental market there, he and his team think the business has much wider appeal.

"This is not just a New York problem," Foux said, adding that it's a countrywide issue, "maybe an international one as well."

Here's the pitch deck UpTop used to raise its seed round:

SEE ALSO: Here's the pitch deck AI startup Skymind just used to scoop up $11.5 million in funding







See the rest of the story at Business Insider

There are 3 key questions you should ask before buying a vintage watch, according to a Christie's luxury watch specialist

Tue, 04/02/2019 - 2:22pm

  • Ryan Chong, a watch specialist at Christie's Auction House, says there are three main questions you should ask when you're looking to buy a vintage watch.
  • The most important question is what kind of condition the watch is in, which includes whether it has all of its original parts as well as its box and paperwork.
  • You should also ask to see the service history to see if any original parts have been changed.
  • And finally, Chong says, you should ask yourself if you really love the watch, or if you just want to buy it in hopes of making money off it later.

The prestigious Christie's Auction House is known for curating some of the world's finest art, jewels, wines and spirits, and of course, watches

I recently visited Christie's at Rockefeller Center in New York City and met one of the auction house's watch specialists, Ryan Chong.

Christie's watches department comprises a global team of 30 people with auction sites in Dubai, Geneva, Hong Kong, and New York. The team sells about $100 million worth of watches each year from luxury brands that include Patek Philippe, Rolex, Vacheron Constantin, Omega, and Audemars Piguet, Chong said. 

The auction house's specialty, though, is vintage watches. 

"Our bread and butter at Christie's, as an auction house, are vintage watches," Chong said at a press event at Christie's. "Those brands, the top three are Patek Philippe, Rolex, and Audemars Piguet."

Anything over 20 years old is considered a vintage watch, he said.

Read more: The top 10 most expensive watches sold by Christie's in 2018, ranked

If you're in the market for a vintage watch, the first thing you should do is find a dealer or a store that has a good reputation, Chong says. Many dealers specialize in a certain brand.

"Work with a specialist, someone who knows vintage watches and what to look for," he said. "Because otherwise, it's a little bit like the Wild West."

Once you have your eye on a particular vintage watch, there are three main questions you should ask before you buy it, Chong told me. 

1. What kind of condition is it in?

"Vintage watches, the main thing with those to look for when purchasing, is condition," Chong said. "Condition trumps everything. That would mean unpolished, all original, with box and papers if possible."

That means the watch should ideally come with its original box and paperwork, which could include the manual, warranty information, and any certificates of authenticity. 

Having those is important "because it helps to back up where [the watch] comes from — where it was born, you could say," Chong said.

2. Is there a service history?

If there's a service history, you'll definitely want to see that, Chong said.

"You want to see if anything has ever been changed in terms of parts, if movement work has been done," Chong said. "Because as I mentioned, the biggest factor in value of vintage watches is condition, and that mostly applies to originality. So if the case is unpolished, if the hands are original, if the dial's been refinished, that could all affect the value."

3. And finally, do you really like it?

Vintage watches can be great investment pieces.

But Chong says you should always buy what you like instead of buying solely for investment purposes.

"Because if you buy for investment purposes and it goes down and you don't like it, then you're stuck with an asset that's decreased in value and that you don't like," Chong told me. "So you've got to make sure you love it."

Buyers are willing to drop some major cash on watches they love at Christie's.

In 2018, the 10 most expensive watches sold at the auction house ranged in price from $566,000 to $3.2 million. The year's most expensive sale was an 18K gold Patek Philippe chronograph watch, signed by Philippe and featuring a perpetual calendar and moon phases, which went for $3,234,905.

SEE ALSO: From a $100 Swatch to a $20,000 Rolex, these are the watches worn by the most powerful people in business and finance

DON'T MISS: There are 3 staples every wine cellar should have, according to an expert at Christie's

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Regulators just gave some legal hope to food and drink makers using cannabis extract CBD

Tue, 04/02/2019 - 2:21pm

  • In a statement on Tuesday, federal regulators hinted at the possibility of a future in which some foods and drinks made with the cannabis extract CBD could be legal.
  • The move is a slight departure from the Food and Drug Administration's previous messaging on the matter.
  • In the past, the agency suggested that CBD products would be banned because a CBD-based drug called Epidiolex also exists.
  • Valued for its purported wellness benefits, CBD is a $1 billion industry that some analysts predict could skyrocket to $16 billion by 2025.

The $1 billion market that includes creams and cupcakes made with the highly touted cannabis compound CBD has recently been clouded by a legal haze. But in a statement on Tuesday, federal regulators hinted that foods and drinks made with CBD could have some kind of legal future.

Although it doesn't get you high, CBD has been associated with therapeutic properties and is the main ingredient in the first federally approved cannabis-based epilepsy medication.

CBD can be derived from both hemp plants, which are legal, and marijuana plants, which are not. That's led to a flurry of expert speculation about how the industry — which some analysts have projected will soon blossom into a $16 billion market — will shake out.

In the statement, the outgoing US Food and Drug Administration (FDA) chief Scott Gottlieb hinted at the possibility of legal CBD-based foods and drinks at some point — so long as they meet or are below a level that the agency deems permissible.

"There are open questions about whether some threshold level of CBD could be allowed in foods without undermining the drug approval process or diminishing commercial incentives for further clinical study of the relevant drug substance," the statement said.

The announcement is a slight departure from the agency's previous messaging on the matter. In the past, the FDA has said available foods and drinks made with CBD are illegal because they have not gone through the same regulatory approval process as the CBD-based epilepsy drug Epidiolex. In that framework, a company making a CBD tea that claims to soothe anxiety would have to have their drink approved by the FDA.

But that framework is not yet set in stone and may be shifting.

From a 'warning shot' to a 'flexible' regulatory approach

Last winter, in what analysts called a "warning shot" to the CBD industry, the FDA released a statement saying it would police foods and beverages made with CBD. On the heels of that statement, state health departments in New York, Maine, and Ohio began cracking down on retailers that were selling unapproved cookies and beverages containing CBD.

But Tuesday's announcement suggests there could be a world in which CBD-containing teas, coffees, and desserts are sold legally. Analysts have previously called the approach "flexible."

Read more: On the heels of hemp legalization, regulators have fired a 'warning shot' to the $1 billion CBD industry

For example, the agency has formed an internal working group that will "explore potential pathways for dietary supplements and/or conventional foods containing CBD to be lawfully marketed," the statement said.

Still, the agency has some concerns about allowing foods and drinks made with CBD to be sold. Those include safety considerations when people are consuming CBD from various sources at once; how the way they're consumed (eaten vs. inhaled, for example) affects exposure; and how CBD products could interact with other substances, such as drugs and medications.

The FDA is holding a public hearing on cannabis at the end of May and taking comments from the public on the topic. Gottlieb officially leaves his post on Friday.

DON'T MISS: A mysterious syndrome that makes marijuana users violently ill is starting to worry doctors

SEE ALSO: Wall Street thinks the $1 billion market for CBD could explode to $16 billion by 2025

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