News Fix: Bitcoin Is Back and 12 Governors Are Uniting for Marijuana Reform

Bitcoin is back. It’s up 114% on the year as I write. And it seems like we’re potentially entering a new bull market.

That doesn’t mean it’ll be an easy ride from here. Crypto markets are still volatile, and there will be more dips and corrections to come. But in the end, it will be worth it. Especially for bitcoin. As Adam Sharp wrote this week…

People all over the world want digital alternatives to fiat, and right now bitcoin has a big lead on all the competition. It has a strong network effect and the best security track record by a mile.

This is why we recommend keeping most of your crypto portfolio in bitcoin. Bitcoin has the best brand, security and adoption rate of any crypto so far. And it’s only getting better.

If you’ve been holding your bitcoin, congratulations! It feels good to be rewarded for your patience.

We intend to keep holding. And we’re looking forward to what’s next.

On to the News Fix!

Cannabis

Bipartisan governors join forces for marijuana reform: The governors of 12 states teamed up to demand congressional leaders pass bipartisan legislation that would let states legalize and regulate marijuana without fear of federal intervention (Marijuana Moment).

Though the government has assured states with legal marijuana programs that their programs would be protected, the governors wrote in their letter that the policy needs to be codified. And the way to do that is through the Strengthening the Tenth Amendment Through Entrusting States (STATES) Act.

“The States Act is a logical step for Congress because it honors state action by codifying protection at the federal level for those businesses and consumers operating in accordance with state law,” they wrote. “The States Act is not about whether marijuana should be legal or illegal; it is about respecting the authority of states to act, lead and respond to the evolving needs and attitudes of their citizens.”

Colorado green lights public consumption: On Wednesday, Colorado Gov. Jared Polis signed a bill that legalizes and regulates public cannabis consumption. The bill will allow music venues, art galleries, yoga studios, restaurants and hotels to obtain public consumption permits and even licenses for limited cannabis sales. There are even temporary permits for special events (High Times).

It’s not all-encompassing – Colorado towns can still opt out and ban public and social consumption licenses. But the law could still have a massive impact on Colorado’s retail cannabis industry. Just imagine all the 4/20 events that’ll move from some guy’s basement to the yoga studio on Main Street.

California cannabis operators fed up with illegal shops: Legal cannabis operators in Los Angeles are still at odds with their unlicensed counterparts. The California Minority Alliance (CMA) said it may sue the city attorney’s office if the agency doesn’t ramp up enforcement against illegal businesses (Marijuana Business Daily).

The CMA wrote a letter saying lawbreaking pot shops in South Los Angeles have “been overlooked and ignored” by the city attorney’s office and the “lack of enforcement has turned safe communities into havens for illicit activity encouraging the proliferation of unlawful cannabis operations.”

Unfortunately, California’s legal pot industry has been struggling to compete with its black market since the state legalized recreational marijuana. It will probably take some time to resolve, but hopefully the Golden State gets a handle on it.

Startups

Female-founded unicorn startups emerging at a historic rate: 2019 is on track to be a record year for female-founded unicorns (Crunchbase News). While still rare, they’re being born at a historic rate.

Globally, there were 12 unicorns born that had at least one female founder last year. And now, less than halfway into 2019, 10 female-founded companies have become unicorns. Katie Ann Rosen Kitchens, who founded unicorn FabFitFun, said she noticed white men were still running the majority of fashion businesses. So she intentionally sought out “people who don’t fit that mold” to partner with for products. And that intentionality has been powerful, she said.

Peloton wants to go public quietly: Fitness startup Peloton, which makes in-home exercise equipment and offers on-demand fitness classes, announced on Wednesday that it has filed to go public confidentially. It has yet to determine the number of shares to be offered or the price range (Crunchbase News).

Since Peloton was founded in 2012, it has raised nearly $1 billion. Its most recent raise was a $550 million Series F that was announced last August at a $4.15 billion valuation.

NFL quarterback launches venture capital fund: Green Bay Packers quarterback Aaron Rodgers has founded a new venture and growth-stage fund, Rx3 Ventures, focused on consumer brands.

General partners include Byron Roth, CEO of Roth Capital Partners, and Nate Raabe, who formerly ran Roth’s private capital group. All three invested seven figures into the fund, and they raised the balance of the $50 million fund, based in Orange County, California.

Rodgers was the highest-paid NFL player in 2018, earning $76 million. We’ll see if his fund can generate even more.

Crypto

Lightning co-creator tackles bitcoin scaling problem: Tadge Dryja, who co-authored the original paper underpinning bitcoin’s experimental lightning payments network, is working to resolve bitcoin’s scaling problem (CoinDesk). Dryja has released a new research paper proposing a scaling solution that he’s been working on for the past year. His plan introduces Utreexo, a method for reducing the storage needed to run a bitcoin full node (a program that fully validates transactions and blocks on the network).

We’ve written a lot about the smart people working behind the scenes to improve bitcoin. This is a great example of that. It’s an exciting development that brings bitcoin (and crypto) one step closer to widespread use.

Japan missing $93 million in crypto taxes: Japanese tax authorities say Japan-based entities failed to report their crypto gains valued at 10 billion yen ($93 million) over the past several years as of this past March (The Asahi Shimbun). Asahi reports that about 30 crypto-related businesses and 50 individuals did not declare their revenues from crypto trading allegedly because of the high tax on this kind of income. (Surprise, surprise.)

Japanese regulators reportedly tax crypto-related revenues at 55% (ouch). Local entities who earn more than 200,000 yen ($1,850) in such income on an annual basis are required to disclose it. But that may change, as earlier this year, the Japan Association of New Economy asked the Japanese Financial Services Agency to consider reducing crypto taxes from 55% to 20%. The association has also asked the regulator to impose no taxation for crypto-to-crypto transactions.

Japan is second only to the U.S. in crypto exchange traffic. So it’ll be interesting to see how this plays out.

Have a great weekend!

Allison Brickell

Assistant Managing Editor, Early Investing