Dear Early Investor,
Even when the government is doing nothing, it’s still screwing it up. The much anticipated January 24 launch of Bakkt, a crypto exchange being built by the parent company of the New York Stock Exchange, Intercontinental Exchange (ICE), is now in doubt because of the government shutdown.
Bakkt needs regulatory approval from the Commodity Futures Trading Commission (CFTC) to launch. But guess who isn’t working? That’s right. CFTC regulators. A limited number of CFTC staffers are working on market surveillance and active litigation. But that’s it (S&P Global).
Regulators will certainly have some questions regarding Bakkt. In fact, Andy Gordon is writing about some of those issues for tomorrow’s Mailbag. But given ICE’s track record at running exchanges, this is as close to a regulatory rubber stamp as you can get.
ICE disclosed the possibility of a delayed launch on New Year’s Eve (ICE). Hopefully the government gets its act together and gets back to work. But we’re not holding our breath. Now on to the News Fix!
One of the worst possible ways to make an investment decision is by judging logos. Logos say absolutely nothing about a company’s viability or profitability. But for some reason, equity crowdfunding investors are doing just that (Forbes).
A research team with members in Canada, France and the United Kingdom found that investors were more likely to back startups with complex logos.
Please don’t do this. It’s like betting on a horse just because you like its name. It’s a terrible way to invest – especially when you have people like Adam Sharp and Andy Gordon around to help.
Back in November, we warned you that NIMBY (not in my backyard) syndrome could slow the growth of the recreational marijuana industry in Michigan. This week, we found out 60 cities in Michigan (so far) have opted out of the system – meaning you can’t sell recreational weed there (Detroit Metro Times).
This is just the beginning of the NIMBY movement in Michigan. More cities will opt out over time.
There are currently no recreational marijuana dispensaries in Michigan because the state is still writing regulations for the industry to follow. Hopefully this regulatory scheme won’t be as bad as Michigan’s medical marijuana framework, where more than 70 dispensaries have been closed because they don’t have a state license.
Obviously, you need a license to operate. But if you’ve been granted a temporary license, the state shouldn’t be able to shut you down until your license application has been reviewed. But that’s what’s happened in some of these cases (WXYZ).
Come on, Michigan. Get your house in order.
Meanwhile, Ohio’s first fully licensed medical marijuana dispensary is expected to open on January 15 (Cleveland.com). And in Las Vegas, a recreational dispensary recently sold the most expensive legal pot product that we know of – an $11,000 cigar (cannagar!) stuffed with marijuana (Newsweek).
And finally, if you’re interested in the rise and fall of crypto mining giant Bitmain, Blockonomi has a pretty good read.
And that’s your News Fix.
Have a great weekend.
Senior Managing Editor, Early Investing