And why the socalled techlash has only made facebook stronger. Lets start with our global cover. 10 straight weeks of when we really stepped back and thought about, what is a perspective that we can bring to the story that has not been brought . One of the things that came out of the conversation was, wheres this angst coming from right now . And one of the things that we realized was that its actually about 2047. When hong kong was handed back to china, one country, two systems being this guiding idea for how the city would be managed, 2047 is viewed as the Expiration Date of that. When you think about the stakes of this situation, five years out isnt enough time to solve that. 10 years out isnt even enough time. So really our thesis for this story by Matt Campbell was that the angst that were watching, the fury that were watching, is ultimately about 2047 and hong kongs countdown to 2047. Jason when you think about sort of the nexus of business, economics, politics, there are few other places in the world where it happens in such sharp relief as hong kong. Joel exactly. This speaks to the dilemma that president xi has. If you use force right now, obviously the situation could really escalate really quickly. On the other side, if you use a little patience perhaps, maybe the students who are a large portion of the protesters might go back to school in september. There is this dilemma between use force or be patient. The word thats now being dropped is terrorism. Terrorism would be perhaps justification to escalate and have things turn to force sooner rather than later. That obviously, all eyes on hong kong. That would become a much, much bigger challenge for the world. Jason for more, lets check in with dan ten kate. Hes bloombergs managing editor overseeing all of our government coverage in asia. He joins me from hong kong late in the evening. Dan, thank you so much for joining me. Give us a sense of what we have seen there this week in hong kong. Dan this week, we saw unprecedented scenes of the protesters going into the airports and essentially grounding all the flights. In hong kong, this is very unusual. I was in thailand in 2008 when they shut down the airports. That ended in a coup. That is not going to be the case here. Chinas firmly in control of the government here and of the territory as a whole. Taking over the airports is a drastic move. The government were fairly tolerant for the first couple days, allowing them to occupy the terminal. If you were flying into hong kong, you would see masses of people coming in. This severely affected the economy and significantly raised the stakes in this conflict. Jason dan, you provide such great historical perspective, being there on the ground. The story in this weeks magazine takes us all the way, in many ways, to 2047. Help us understand what may be to come. Dan 2047 is the date that the basic law expires. The basic law is what was put in place when the british handed over hong kong to the chinese in 1997. That was actually negotiated in the 1980s under margaret thatcher. The idea was that these two systems would converge and the democratic system would prevail. Right now, we are nearly halfway through that period and that hasnt happened. We have had significantly, over the past couple years, we have seen that system erode. Hong kongers see a future where they are subject to the communist party and they are fighting against it right now. Jason we see these pictures. For people in the Business World, for people in the financial world, this is not the hong kong that they know. This is a place that has been central to the global economy, a home to many expats from around the world. Whats at stake for the Global Financial system here . Dan a lot is at stake. Hong kong is one of the premier financial hubs in asia. It facilitates a lot of the investment that goes into china and that goes out of china. The chinese use hong kong to raise money for state run companies, to invest around the world for the belt and road initiative, which is a massive policy for president xi jinping. To lose hong kong as an International Financial center, to make businesses wary of investing in hong kong because of political stability is a significant worry. It is a huge port that does a lot of business. What we are seeing is that expats, people who have been here a long time, are very, very worried about how this is going to end. Many people think it will end very ugly. There is a lot of money already moving out of this place. Jason dan ten kate, thank you so much. Our other big story this week wall street whiplash. Sell off for stocks and sounding the alarm after the u. S. And the u. K. s yield curves invert. It is historically a harbinger for recession. Here is economics editor peter coy to make sense of it all. He is apologizing for something we wrote before most of us were born. Peter first of all, what is an inverted yield curve . It means that the longterm Interest Rates are lower than the shortterm Interest Rates, which is the reverse of the normal condition. It can be a harbinger of recession. What happened this week we had already had an inversion between the three month and the 10 year. Now the two year and the 10 year inversion, which was a considered stronger signal of impending recession. Not necessarily tomorrow, but maybe in 18 months or so. That was the big news of the week. It was one of the big factors in why the stock market did badly. Jason this is an economic story. It is a business story. It is a market story, but it is also a political story. Peter donald trump is getting nervous because if a recession hits in 2020, it will be bad for his reelection campaign. He has taken off after Federal Reserve chairman jay powell, saying the fed urgently needs to lower Interest Rates. If he did that, if the fed did that, the inversion would go away. Shortterm rates would come down and we would have more of a normal yield curve. Jason talk to me about the story you have this week. You go all the way back to a businessweek cover story 40 years ago. Peter 40 years ago, august 1979, businessweek a cover story called the death of equities. People are still giving us a hard time about it because, of course, equities have done quite nicely. The article came out at a time when inflation was very high. What we were observing was that stocks did not seem to be a very good hedge against inflation. What was a good hedge was gold, diamonds, singlefamily homes, and, my favorite, stamps. Jason that was my favorite too. I cannot believe that was a thing. Peter can you imagine . What happened after that is that the article was right for three years because of stocks continued to go down and down. In 1982, after paul volcker, the chairman of the Federal Reserve, managed to squeeze inflation out of the system through two punishing backtoback recessions, the conditions were set for the rebound. If you look at the market now, the s p, if you invested in dividends over that period of time, we have 7000 since that article came out. Not bad for a corpse. Jason a story right in the shortterm but very wrong in the long term. Glad that our readers are keeping us honest and that we are owning up to it. Peter coy, thank you. Coming up, as that 2020 election approaches, are the polls prepared for hackers . Plus, rebirth in baltimore. Ecommerce reviving the american citys neglected industrial hub. This is Bloomberg Businessweek. Jason welcome back to Bloomberg Businessweek. Im jason kelly. Join us for Bloomberg Businessweek every day on the radio from 2 00 to 5 00 p. M. Wall street time. Also, catch up on our daily show. Listen, subscribe to our podcast. Get that at itunes, soundcloud, and bloomberg. Com. You can also find us online at businessweek. Com and on our mobile app. As the 2020 election approaches, it is democracy versus the hackers. This weeks solution section exposes how efforts in illinois to protect its voting systems show how vulnerable states are still to outside attacks. Here is editor dimitra kessenides. Dimitra we got a little preview when Robert Mueller went before congress a few weeks ago to testify. Putting aside Everything Else about that event, he kept hitting on this message, that this is a very, very serious threat that we are confronting. That is what the takeaway was from that report first and foremost. I think when we get into the details like we do in this story that Kartikay Mehrotra has written about focusing on illinois, but thats emblematic of what is happening across the country. It is a huge problem that is becoming bigger and that is really hard to contend with for a number of reasons. Jason illinois got hacked. Dimitra one of two states that were clearly singled out in muellers report and that is really owning up to the hacking and really trying to say this is what happened to us and we do not want to repeat this. We really want to be prepared. What is happening is there is a concern that the hacking of 2016 was almost like a practice run for what they are going to do in 2020. The number of parties is going to be more. The number of countries that are doing these kinds of geopolitical moves we are aware now it is not just russia. It is north korea and its china. The resources you need to contend with this are tremendous. While a lot of resources have been devoted, it is a fraction of what is necessary. Jason we are talking low double digits percentagewise of what a state like illinois would need. Lets talk about the electoral system. One of the things i was reminded of in this story as well is it is incredibly complicated and it is really decentralized in a lot of ways. Dimitra it is statebystate. It is localities. You have election boards and secretaries of state that deal with it. You have different positions and you really have to figure out how you are going to persuade, since it is not centralized, all of those people about the necessity to really invest. The first thing this comes down to is money. A lot of them do not have the money and they are not getting quite as much as they need from the federal government. When you are saying try to find the money, 30 million more than what you are devoting to actually contend with this, they look at it and say, well, who are we and why would anybody want to hack us . Jason that is exactly right. That was such an important point of this. You have local officials that are essentially saying, i know they might go after voting in chicago or the state of florida. That is the ground zero for a lot of this and you talked to the governor of that state, ron desantis, as well. But a small county in kansas or town in kansas, theyre going to be like, who cares . Dimitra but a lot of damage can be done there. It is not just messing with the voting machine. It is getting at databases ahead of time, messing with the roles, with the names of voters. Ways that they have that will just really create a lot of chaos. No confidence in the system ultimately. What you are also doing is a psychological kind of war. Which is going to lead people to say, why should i vote when this is all happening . Jason from illinois, lets go east to maryland, specifically baltimore. A renaissance story that may set a template for other American Cities hollowed out by forces of globalization. Here is reporter tom maloney on a 3100 acre fixerupper. Tom this is a story about Tradepoint Atlantic, which is a development thats on the edge of baltimore city. It used to be called sparrows point. It used to be one of the biggest steel mills in the world, at its peak employed more than 30,000 people. Then started falling on hard times at beginning of the 21st century like a lot of other steel sites in the u. S. And went through a series of owners. It finally went bankrupt in 2012 and was bought out by this company hilco, which is really more of an asset stripper. After spending some time at the site, a couple of years, i realized it could be incredible valuable as a logistics center, which is what it is becoming today. Jason you have some big names, wellknown names in the Business World who have been betting big on this, not the least of which is kevin plank from under armour. Has been one of the biggest champions of the hometown of his company. How does he play into this narrative . Tom under armour opened a facility there very recently. It is 1. 5 million square feet warehouse. That is the size of 23 football fields or Something Like that. Just an enormous ecommerce facility. What was interesting speaking to the guys at Tradepoint Atlantic, they said even though kevin plank is a really big baltimore booster, he was looking across the east coast for this facility and he just saw that Tradepoint Atlantic is unique in a lot of ways. What made it attractive as a steelmaking facility, being right on the water and close to rail and the interstate highways, isthe same thing that makes it ideal as an ecommerce logistics facility. They can have ships unloading goods right there and then get them straight onto trains, straight onto the highway. 24 hours from about a third of the u. S. Population. Jason still to come, my exclusive interview with private equity legend don gogel on how to invest in a period of chaos. This is Bloomberg Businessweek. Jason welcome back to Bloomberg Businessweek. I am jason kelly. You can also listen to us on the radio on sirius xm channel 119, also a. M. 1130 in new york, 106. 1 in boston, 99. 1 in washington, d. C. , am 960 in the bay area, and london on dab digital and through the Bloomberg Business app. Now to a businessweek exclusive. Don gogel has worked at private equity firm cd r for three decades. He became the companys ceo back in 1998, overseeing about 18 billion in assets. He has seen some things in his time. In todays period of chaos, hong kong, brexit, volatility here in the u. S. , i asked him what role pe plays right now. Don i think private equity can be a bit of a buffer during these periods. To be fair, private equity firms, virtually all of them, are not foolhardy and they do not say, well, we are going to buy on a downturn. One of the challenges that private equity has now to play that buffer role is it is harder now to deploy capital than it has been in a while. I say that because, notwithstanding the chaos, valuations and private equity transactions have remained stubbornly high. They have been growing over the last four or five years. You cannot reverse the laws of supply and demand. With all of the money that has been raised, as you know, this dry powder that is available, the animal instincts of good private equity firms are trying to put it to work. The equity values, valuations, have moved up and up and it is harder to put money to work. The only way you justify it is if you see this not unbroken but longterm trend up. Given the chaos in a number of industries caused by factors that we do not need to enumerate now, all you need to do is watch bloomberg and you find out those factors, it is harder to put money to work. Some of the technical factors are still favorable, although High Yield Fund flows have been diminished. I think there has been 38 straight weeks of people taking money out of High Yield Funds. There is Still Available capital. It is a profitable product line. There is still investor demand. The capital will still be there. There is plenty of equity there. It is a matter of selectivity, but in these periods of time, there is a rush to businesses that seem to have a lower risk profile. Then the price gets bid up. For us and many others, navigating your way to find the right transaction, the right risk reward, the right capital structure, the right management team, the right prospects, the right path through regulatory maze, if it is a business Like Health Care where we invest often, it is complicated. I still view it as a flexible buffer that can normalize economies and companies when needed. Jason you have the ability and probably the need to be talking to ceos all the time, both ceos of companies you control, ceos of companies you might want to control. You have a whole network at your disposal. If you can generalize how the leaders of Big Companies and maybe Small Companies are feeling right now, what would you say . Don there is high anxiety, appropriately so. Anxiety about the economic and macroeconomic political conditions that you described. I think Public Company ceos feel under more pressure than ever to show at least some level of performance improvement. Its a function both of stock market, which gives you a report card every day, activists that come in and let you know exactly what youre doing wrong and what they think you should be doing right, boards that feel that they have to respond to a lot of those pressures. If you look at the statistics, i am going to phrase it in a way that sounds shocking but it is just math, if you recognize it, about one in five s p 500 ceos change every year, that means that there is the ceo change in the s p 500 about every four or five days. That is just math. If you are the ceo, you are looking at those numbers and youre looking to the left, the right. You like to have eyes behind you and it is not that you do not trust your board or that people are not going to give you some time, but it is a measure of the environment that it is tough and ceo tenure is being reduced and ceos have a tough job in Public Companies. It is tough everywhere. Leadership is always hard. Now, the scrutiny social media, activists, shareholders, 24 7 global makes it very hard to be a Public Company ceo. Jason for my entire conversation with don gogel, including what he has learned from hiring and firing literally dozens of ceos over the years, check out our businessweek extra podcast wherever you get your podcasts. We turn now from anxiety in the board room to anxious students and graduates and the lasting burden of student debt. Here is the businessweek explainer from the finance section. Jason do the math on americas 1. 6 trillion student loan balance and the bottom line is pretty grim. A Bloomberg Businessweek analysis found student loan borrowers are paying down about 1 of their federal debt every year. For the average borrower, that is akin to only 300 on a typical 30,000 loan. At that rate, the debt wont be paid off for a century. No wonder it has become a political issue. Progressives propose a bailout because tuition has far outpaced inflation and wages. Conservatives blamed the government for promoting outofcontrol borrowing. About 8 million borrowers are in incomebased plans to let them reduce Monthly Payment and can lead to Debt Forgiveness in as few as 10 years. That has led to fewer delinquencies and defaults. They have lead to slower repayments and rising balances. That is while unemployment is at a 50 year low and the economic expansion is the longest in history. If times get tougher, the student loan crisis is likely to get worse. Still ahead, chipmaker amd is back to making life difficult for intel. And the ftc and facebook why the techlash is only making the social network stronger. This is Bloomberg Businessweek. At comcast, we didnt build the nations largest gigspeed network just to make businesses run faster. We built it to help them go beyond. Because beyond risk. Welcome to the neighborhood, guys. There is reward. Beyond work and life. Who else could he be . There is the moment. Beyond technology. There is human ingenuity. Every day, comcast business is helping businesses go beyond the expected, to do the extraordinary. Take your business beyond. Jason welcome back to Bloomberg Businessweek. Im jason kelly. Still ahead, last months 5 billion privacy settlement with the ftc may actually make facebook even stronger. Plus, premium, personalized weed is the next stage of the business of Legal Cannabis. But first up, technology. American chipmakers found themselves in the crosshairs of the trade war between the u. S. And china. And one is thriving. Heres taylor riggs with a chart. Hi. Taylor. Exactly. That one is amd. As you know, its all been a big rivalry between amd and intel. In the broader sox index, thats the major chipmakers. Amd is in white, up 600 in the last five years. The sox broader gauge of chipmakers is in yellow. Intel only up 50 or so in blue. You know there is a rivalry between these two, even with everything going on with the trade tariffs and china. Pretty impressive at least from the markets perspective. Jason it is amazing. That outperformance is really something. Taylor, thank you so much. Amd is thriving thanks to a heads down ceo, lisa su, and her efforts to exploit intels woes. Heres reporter ian king in san francisco. Ian being a little volatile, and as you expect from amd, they have had huge run ups and huge declines on not a lot of news. But in general, i spoke to one fund manager who said, look, i dont want a rock star. We have had rock stars or people who thought they were rock stars running this company in the past and it never turned out well. I am much more comfortable with somebody whos comfortable in her own skin, whos just focused on the job. Shes the kind of person that goes to the lab and checks on people and checks on how things are going and checks whether the chips will be out on time when they said it was going to be rather than the person out there on stage. That appears to have resonated with investors and analysts. Jason look at the other side of the coin. The intel side. Obviously, that is a company and you and i have talked about this several times over the last couple of years it has had some management challenges. Its also had some technical challenges as it has tried to continue down that road of shrinking things on Semi Conductors, shrinking down to 10 nanometers. Do i have that right . Ian you do, yeah. I mean, nobody has ever seen this from intel. Like any company, they have ups and downs, but this appears to be fundamental. This is the thing they have used to beat up everybody. Amd is remarkable in the fact that its a survivor. Youll remember back in the day all manner of Companies Used to try to compete with intel in microprocessors. All of them are gone. Nobody could stand in their way. That is because they ran the best factories on the planet. That was their boast and it was hard to argue with it. Normally, a year, 18 months, and we are on to the next node of processing. That gives not just cheaper costs, as it does in other industries, but makes these chips perform better. Nobody was even coming close to what intel was capable of in these High Performance chips. But now, 2017 was when they promised 10 nanometer. Not going to happen in server chips, their most important products, until next year. Jason one of the things you point out in your story which i think is so fascinating is that lisa su and her team made a key decision around their own manufacturing which has allowed them to step in at a time when intel has stumbled. Ian this is an example of her pragmatism and what people tell us about her. She makes decisions not based upon becoming a mini intel or trying to compete with intel on its on terms but doing the best for her company and positioning themselves. What she has done is shift production to a Company Called taiwan Semi Conductor manufacturing, tsmc as Everybody Knows it. That company has really pulled ahead in the last couple of years if you believe the analysts and if you believe its own results. That company, which only does outsource manufacturing, is benefitting from a fundamental shift in the chip industry. The vast majority of volume now comes from smartphone processors and memory. A lot of what goes on in chip factories, of course, is pure science. Its material science, applied physics and chemistry, but its also experience based, putting the machines in the right order, the simple blocking and tackling of making sure these things are working flat out. Tsmc is the best at doing that right now. Amd is using their factories and has, in theory, better manufacturing than intel. Jason staying with technology, the techlash has only make facebook stronger. Didnt see that coming. The ftc begins an antitrust probe of the social network, but we are looking at the fine print last months 5 billion privacy settlement. Heres sarah frier. Sarah think about facebook and what makes facebook work. This 70 billion revenue in advertising business this year, its all about data. The data facebook has compiled, not just from its users, but from third parties, from tracking people around the internet, understanding what they click on and watch and care about, that is the value at the center of their advertising business. And so when the ftc comes and tells them you cant share that data with anybody else, great facebook loves that, in a way. They are big enough now that they do not really need to rely on other companies building other kind of products. There used to be a reason for facebook to share its data with all of the developers for games for facebook and quizzes and all the things you remember from the facebook of five or six years ago. But now, the company is big enough that it does not need to rely on that network. So the ftc is punishing a version of facebook that no longer exists. Jason it is such a provocative idea. I loved reading this story because it turned it on its head. It made me think about this in a whole different way. You go back to the Cambridge Analytica story, which is part of the reason we are even talking about this. Sarah right. In Cambridge Analytica, there was a developer who used a tool to gather information on millions of people, not just the people who used the quiz but their friends, and sold that data to Cambridge Analytica, this political consultancy. It worked for conservative campaigns including trump. That was an uproar, but that happened before 2015. The fact that facebook knew about it and did not do anything about it that is a big problem. But we will continue to see leaks like that from the past. These breaches of user data that will come back to haunt facebook. But the facebook of today, the facebook of the future, is not the same company. So when regulators think about how to fix the current problem of this company with tremendous power over our society and how we think and what kind of information we get and who we connect with, that facebook is not the one sharing data with third parties. It is not the one relying on people to make personality quizzes. In fact, it is just trying to become a selfsufficient network of its own making and combine its messaging app so they have this network to work with. It is a very different company. Itll be interesting to see if regulators start to think about the future of what they are looking at. Jason up next, the next stage in Legal Cannabis cultivating returns. This is Bloomberg Businessweek. Jason welcome back to Bloomberg Businessweek. I am jason kelly. Join us every day on the radio from 2 00 p. M. To 5 00 p. M. Wall street time. And catch up on our daily show, listen and subscribe to our podcast. And find us online at businessweek. Com. Turning to a story you can find online, here is our reporter on how weed is normalizing by going upscale. We are talking about an industry where sales were over 10 billion in the u. S. Last year. It is becoming big business. There are 11 states where adults can buy marijuana, another 24 with medical access. The latest progression is Luxury Products and customized products. We talked to a company from colorado that will make custom blunts, a cigar filled with marijuana. They sell for 1200 a pop. People are buying these for their weddings. We are seeing more and more people doing this for bachelorette parties and rap groups that are getting custom joints. So the progression and a normalization is now the emergence of Luxury Products. Jason its interesting. The celebrity angle, i feel like one of the subheads could be smoking weed, its not just for snoop dogg anymore. You are talking about chelsea handler, jayz, willie nelson, obviously. There are a lot of celebrities that have been out there with it going back to the 1960s, way before, when this was demonized. And you are seeing again, this is about the normalization. In new york, it is still illegal. There are still those stigmas. If you go out to california, it is a very different attitude. People are moving away from drinking. Happy hour, people think its crazy that people would go out and get drunk after work because they have to get up early and do yoga or do all these other things. Cannabis has been positioned as part of an active lifestyle and i think you are seeing more and more celebrities. Martha stewart is a great example of somebody that has come out there. She has a friendship with snoop. I guess you turned her onto it. I think the important piece here is how this is being embraced by people across the cultural spectrum. Jason walk me through where we have come over the last two years. Weve got big Institutional Investors coming into this. That feels like evidence of a step forward or a maturing of this industry. 100 . About a year ago this time is when Constellation Brands put 4 billion into the worlds most valuable cannabis company, that was the inflection point. This was a big, Public Company in the u. S. Saying we think this is real and we are betting on that. In the fall, we had a slew of u. S. Companies going public in canada. Since then, it has been a steady drumbeat. The big banks are largely on the sidelines. Federal prohibition is keeping the goldmans, the credit suisse, those guys are staying away. It is small enough for them to ignore still, despite the fact that it is growing, and they are concerned about the regulatory risk. The federal government still considers marijuana to be illegal and to be among the worst narcotics around, with heroin. It is this crazy dichotomy. The government says it is illegal, but it is a thriving business in california, the sixth largest economy in the world, largest marijuana market in the world now, and business is booming there. Family offices are showing up, hedge funds are getting interested. Josh kushners thrive capital led to this round. It is the first time they have invested in marijuana. Slowly but surely, people see the growth, see the potential across a variety of industries and are starting to put money in. Just for fomo. They see a lot of growth and dont want to have missed out. And the interesting thing about kushner, it is nonplant touching. That is still a distinction for a lot of people. They invested in a tech company. They do not touch the plant, which is the industry term for dealing directly with marijuana. So they did not invest in a grower or a brand or a retail chain. They invested in a Technology Company that is working in canada. So there are still these subtle distinctions. Jason for more on the business of cannabis, we spoke with leaf link ceo and cofounder ryan smith, the online marketplace for wholesale buyers and sellers of cannabis. They just raised a 35 million round led by thrive management. Thrive back to instagram before its acquisition by facebook. This is the first cannabisrelated investment. I asked ryan what they planned to do with this money. We are really proud to be that bridge that connects institutional quality investors to the cannabis space. We are a Technology Company, so it is a valuable way to look in and participate. We want to work with and think of ourselves as this professional tech outfit and we want the best investors. Jason give me the basic pitch. Leaf link is a b to b marketplace, connecting brands, territories, with licensed retailers. If you are a purchase ching purchasing manager eddie dispensary, you need to buy from 30 to 50 brands to stock your shelves, you do that in one cart on leaf link. Jason youll be scaling the financial piece, all of those issues have got to be one of the most complicated things to tackle in this ecosystem. We have done our best to follow the rules that exist and we work closely with regulators to make sure the things we put in the market are following regulations. For example, if we were a marketplace selling shoes, we could plug in paypal. None of those are available to our clients, so we had to come up with a solution that was somewhat removed but also compliant. That is what gave rise to leaf link financial. That allows them to pay for their goods through the marketplace. Jason walk me through how you even go about building Something Like this. As you say, its not like selling shoes or books or anything we are used to buying. For us, the first three and a half years of the company were about being close with our clients. People were paying a flat fee to be on the platform, so we were not a part of the transaction. What we found was that its not that banks and Financial Institutions cannot serve cannabis companies. It is that there is a higher level of due diligence. Jason know your customer. Exactly. And we deeply know our customers and licenses, the individuals. So we have a solution that takes advantage of things that only we have to provide them to banks and institutions that lessen the amount of work they need to do to service these companies. Jason how did you get this idea . My cofounder and i, zach, was at ebay for a bit. I have been selling things online. My parents would say things went missing in the house. Zach and i had each started in independent companies that we sold in 2014 and we began thinking about a way to virtualize the supply chain. Why arent b to b marketplaces a thing for individuals . We go home and shop for anything and everything. We go to work and we are emailing and writing pos, faxes. We were thinking about a great place to bring this value. If we were to launch this in the paper industry, our space itself is a startup so we built a marketplace here. Jason lets talk about that ecosystem a little bit. We have had some highly valued, Public Companies come onto the scene. Some of which you are associated with. Canopy most notably. Talk about that relationship. We have been growing over the last 3. 5 years in the states. Now that canada is federally legal, that was going to be a market for us. We reached out to canopy rivers to open up international markets. They are operational in over 12 international territories. So we formed with them to launch our software into these markets that are still trying to find their way amongst regulators. So we opened up an office in toronto around that effort. Jason coming up, the world of pursuits from a slightly different angle. We look at why you cant quite get what some consider dirty money out of museums around the world. This is Bloomberg Businessweek. Jason welcome back to Bloomberg Businessweek. I am jason kelly. You can listen to us on the radio on sirius xm channel 119, and on a. M. 1130 in new york, 106. 1 in boston, 99. 1 f. M. In washington, d. C. A. M. 960 in the bay area, london on dab digital, and through the Bloomberg Business app. We cant let you go without a little pursuit. This weeks opener, the art world is in crisis. The wave of protests against Museum Donors is creating an existential threat to art organizations across the world. These protests that are occurring in museums across the United States and europe have to do with some very, very wealthy families who have been doing some very controversial things. There is the Sackler Family, which owns Purdue Pharma which produces oxycontin, which various lawsuits allege is responsible for perpetuating the opioid epidemic. And theres a man who produces teargas, which processors allege teargas, which protesters allege is misused during confrontations at the u. S. Mexico border. It just so happens that the Sackler Family and others are major art patrons. There is a tremendous movement from a lot of different people to remove the Sackler Family from various cultural institutions. The point of all of this is that protesters are alleging that cultural institutions are, in whatever way, forwardlooking and liberal and espouse various worldviews that are completely in opposition to people like the sacklers. They feel these cultural institutions are art washing the names of these families in a way they benefit in a way they should not. Jason lets take a step back. What you have just laid out goes to the very core of how institutions, cultural institutions, have been funded for centuries, a millennia, in some ways. That is exactly right. The entire thing is that, in europe, institutions are funded by the government. In the United States, they have always been paid for by wealthy people. In the United States, most wealthy people have made their money in ways that are not necessarily completely blameless. There are only a finite number of people whose fortunes are derived from green energy. Everybody else is, in whatever way, subject to scrutiny. The issue, then, is that museums rely on this vast wealth to stay in business. They dont really have any other way of getting money. There arent public funds available. So as museums attempt to respond to the protesters, they are put. In this interesting position, some might say impossible position, where they want to be responsive to their constituents but they also need to keep the lights on. This is the real crux of the issue and nobody has a great answer for help for how to help this going moving forward. Jason lets take a virtual stroll through the various wings of various museums in new york city. Look at the outsides of the buildings, the boards of trustees. You dont have to dig very deep to find oil, private equity, hedge fund money. What is a museum to do . Currently, they have no idea. Thats the short answer. For the time being, museums are putting out fires whenever they come. But also, partly by necessity, and partly by principal, saying look, if people believe in our mission, we are not in a position to make value judgments about the ways they might have made their money in a capitalist society. Jason Bloomberg Businessweek is available on newsstands now, online, and through our mobile app. There, you can find more stories from this weeks issue, including a political upset and panicking investors in argentina. Plus, french tv reform as netflix and Youtube Capture a growing chunk of advertising dollars. And china in its bid for technological supremacy has one small problem, research and Development Spending at a little more than 2 of gdp, is dwarfed by that of israel, japan, and the United States. Check out our podcasts. More Bloomberg Television starts now. Emily im emily chang and this is the best of bloomberg technology. We bring you all our top interviews from this week in tech. Coming up, a flurry of tech unicorns charging to the public markets. We will take a look at the inner workings of wework ceo Adam Neumanns company and is complex and controversial business relationships. Plus, content kings. Cbs and viacom finally inked a