🍃 Bud’s big break

…and Walmart’s private-label push (Tom Williams/Getty Images) Some say it’s high time for a change   Yesterday's market moves Dow Jones 37,903 (+0.23%) S&P 500 5,018 (-0.34%) Nasdaq 15,605 (-0.33%) Bitcoin $57,825 (-4.61%) Dow Jones 37,903 (+0.23%) S&P 500 5,018 (-0.34%) Nasdaq 15,605 (-0.33%) Bitcoin $57,825 (-4.61%) Hey Snackers, I upvote, therefore I am. Philosophers are [researching]( modern morality by studying [Reddit](’s “Am I the A-hole” forum. If only Descartes were around to chime in. Stocks didn’t budge much yesterday after the Fed kept interest rates steady. But traders seemed heartened after J. Powell [said]( the central bank likely wouldn’t hike rates at its next meeting. Today investors have eyes on earnings from [Apple]( and Big Oil.   CANNABIZ [The DEA’s marijuana reclassification may ease the cannabis industry’s strain]( Grass gets greener… In a seismic shift for US cannabis policy, the Biden admin this week began the process of loosening restrictions on marijuana. Under the proposal, pot would become a Schedule III drug (on par with anabolic steroids). It’s been classified as a Schedule I drug (on par with heroin) since 1970. Although the move wouldn’t amount to decriminalization, cannabis-related stocks and ETFs [soared]( on the news as investors bet it could reignite the beleaguered $35B industry. - Write-off: Moving to Schedule III will pull canna-businesses out of a section of tax code that bars them from writing off things like rent and salaries, a potentially massive tax cut. - Smoke test: Reclassifying cannabis would make it easier for researchers to further study its health effects and pharma applications. - Nug #s: Medical or recreational weed use is now legal in 38 states and Washington, DC. But the cannabis industry is still waiting for federal decriminalization. Weed needed a hit… Despite pot’s slow ’n’ steady legalization spread, the industry’s fallen on dank times. The state-by-state legal hodgepodge has made it hard for Canadian pot biggies like [Tilray]( and [Canopy]( to plant roots in the US (and for American canna-companies it’s been a buzzkill to even get listed on US exchanges). A day before the reclassification news, MedMen, previously a pot unicorn (valued at $3B in 2018), filed for bankruptcy. Last year, [Mastercard]( cracked down on the use of its debit cards as payment for weed products. Venture cannabis investment was just $550M last year, down 80% from 2021. THE TAKEAWAY There’s still a lot to hash out… Reclassification isn’t legalization, and doesn’t solve the cannabis industry’s biggest problems. Just a fraction of financial institutions (fewer than 700) do business with weed companies because of the drug’s illegal federal status, and experts say moving from Schedule I to III won’t change that. Getting small-business loans will still be similarly difficult.   GOODS [Walmart rolls out a fancy private-label grocery brand to lure wealthier shoppers]( Whole Foods vibes… for Great Value prices. [Walmart](’s [dropping]( its largest private store brand in two decades. The label, Bettergoods, will feature products like cardamom rose raspberry jam, curry-chicken empanadas, oat-milk ice cream, and hot honey seasoning. Walmart said it plans to add 300+ Bettergoods items to its shelves this year, and most will cost under $5. Walmart is already America’s largest grocer, and it said that its store brands are growing across all demographics (especially Gen Z). - Generics giant: Bettergoods will join Walmart's other private labels, including its popular Great Value line. At Walmart’s Sam’s Club, private labels drive 30% of sales. - Coupon clip: Walmart and other low-priced grocery chains like Aldi and Trader Joe's have benefited as shoppers opt for budget-friendly purchases. Retail’s private-label push… Higher-income customers have been moving to discount retailers as inflation hikes the prices of weekly grocery runs. Recent data showed households making $100K to $150K were Walmart’s second-largest group of shoppers last year. As more folks trade down, retailers are adding more-affordable store brands to keep carts full. [Kroger]( said it plans to release 800+ new private-label products this year. And last month [Target]( launched a toy label, adding to its store brands like Dealworthy and Up&Up. THE TAKEAWAY Brand-agnostic is in… Shoppers are trading down from price-hiked brand names like [Pepsi]( and [Kraft Heinz]( (which both recently reported slipping US sales) and leaning toward store brands. With private labels, grocery retailers can cater to a variety of shoppers and boost loyalty with products that can only be found at their stores (think: TJ’s seasonings).   What else we're Snackin' - [GPYes](: [Garmin]( stock neared a record after its Q1 sales surged 20%, fueled by its fitness-tracker unit, which jumped 40%. While Apple leads wearables, Garmin’s gained wrist real estate with athletes. - [Fried](: [Yum Brands](’ quarterly sales fell 3% as appetite for KFC and Pizza Hut fizzled, though Taco Bell grew. Rival [McDonald’s]( also disappointed as Middle East tensions ate into international sales. - [PayOut](: [Johnson & Johnson]( offered to pay $6.5B over 25 years to settle thousands of lawsuits claiming its talc products caused cancer (which J&J denies). J&J stopped selling talc baby powder last year. - [Sneeze](: [CVS]( stock dropped 17% yesterday after the pharmacy chain reported bummer earnings and slashed its annual forecast. CVS blamed spiking medical costs, which have been plaguing insurers like [UnitedHealth](. - [Ketchdown](: Kraft Heinz’s sales slumped last quarter after customers refused to stomach higher prices. The mac-maker said its price hikes pay for costlier ingredients, though it’s been accused of “greedflation.”   Snack Fact of the Day [Novo Nordisk’s market cap is bigger than the economy of Denmark, its HQ](   Thursday - Weekly jobless claims - Earnings expected from Apple, US Steel, Kellanova, Amgen, Shell, ConocoPhillips, Cigna, and Wendy’s Authors of this Snacks own shares of: Apple, CVS, Kraft Heinz, Reddit, and Walmart   [Instagram]( [Twitter]( [Sherwood Logo](sherwood.news) Sherwood Media, LLC produces fresh and unique perspectives on topical financial news and is a fully owned subsidiary of Robinhood Markets, Inc., and any views expressed here do not necessarily reflect the views of any other Robinhood affiliate... 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