caroline: from bloomberg words -- from bloomberg's would head quarters in new york, i'm caroline hyde. romaine: let's take a look at where we stand in u.s. markets. the s&p 500 up a massive six and a half points. joe: the question is, what did you mess? caroline: a massive 6.5 points. that is 2/10 of a percent.

retail traders are still finding ways to affect other sectors today. you have seen the wild swings in pot stocks. a week from today, we brace ourselves. the attention to the new focus on retail. washington executives are going to be grilling robinhood. it is amazing we are not seeing the gains we saw in gamestop. joe: absolutely. it is not going away. you thought maybe they were going to all quit because they could not destroy capitalism. they are not done yet. still buying stocks. still making moves. look at tilray. down nearly 50%. it was up like 100% or something over the last few days. some biotech stocks you probably never heard of having a big day. the old blue-chip finding some

price stability. romaine: is this decentralized finance? joe: the dow jones of the meme stocks. joining us is katie grayfield. thank you so much for joining us. this is not going away. it is getting crazier even if gamestop is over. >> that appears to be the message. you have multiple screens up. you are seeing these microcap biotech names. you're seeing mentions on twitter and other subreddit's. that does some -- does seem to be a force behind some of these biotech names. you have names such as cell see on. there is some fundamental news. therapeutics, that closed over 26% higher. even though gamestop -- romaine: you know what either one of those companies does? >> i am not super clear on it.

i would love to ask that to some of the traders pumping those names if they know as well. i think the message is clear. even though gamestop and pot stocks seem to be falling out of favor, this brand of online day traders is not going away yet. caroline: almost bigger than the news we have seen in clubhouse media, which is not the clubhouse that retail investors are willing to get into. your perspective on whether they are starting to anticipate regulation, anyone laughing about how they did not destroy cap. overall, are we seeing a retail remaining for the longer term? could be a good thing that people want to be investing their money. katie: it is going to be interesting what happens here. news that some of the trades in gamestop are under scrutiny is really interesting. this has been an overarching question throughout this whole frenzy. how do you regulate this?

when the sec gets involved in market manipulation, it is focused on one firm that is putting out information, giving it misinformation. in this case, it is a bunch of individuals online on a message board. they are anonymous in a lot of cases. how regulators respond is going to be fascinating. romaine: that is why am carries what is going to happen next week on capitol hill. there is always the dog and pony show with these regulators. it is hard to find a real bogeyman or some kind of thread where you can say there is something really illegal happening. how did asos that out if at all? katie: that is what i am going to be watching for. you have seen the target shift from robinhood to the market makers and back to robinhood. it is not just robinhood that does that. it is all these brokerages. it is the way they are able to make a profit even though they

have zero feed trading. that all has been legal and fine. obviously it is under a much heavier spotlight now. romaine: katie greifeld, are cross assets reporter. -- our cross assets reporter. coming up, we are going to go from the reddit retail media to the fundamentals. there was a huge rally in the cannabis sector. some of it may be based on fundamentals. this is bloomberg. ♪

romaine: welcome back. today, we are focused on the

retail impact of the markets. one thing i thought was interesting is a bid all this retail frenzy and speculation, buried somewhere is a fundamental argument. we saw that with gamestop. we are seeing that to another extent with the rally we have been seeing in cannabis stocks. joe: there has got to be some story that gets people excited so the masses can coalesce around it. the moves are really incredible. we mentioned at tilray having plunged 50%. it is up 20% in five days even with that 50% plunge. you get the sense of what a mania we have seen in the space. caroline: also, there was a chart yesterday about how in lockstep from a correlation perspective pot stocks have been moving with crypto. there are some ways in which these highflying and falling sectors move. it feels like 2018 all over again. joe: joining us with more

insight, sean stiefel. is there a fundamental story that is turning around in these -- the space? what is changing such that reddit mania aside, people are warming up to the space again? sean: absolutely. there is a fundamental story. with the democrats taking the senate, that changed the game. the biden victory was a phenomenal win for cannabis. the senate was the game changer. seemingly every single day, you have a state talking about legalizing cannabis either medically or adult use. last week, you had connecticut, virginia, wisconsin. this is becoming a daily news event. there are public ways to get exposure, but they are also a lot of canadian companies that have no exposure here that have somehow caught this rally because the reddit traders can

only buy the stocks on the new york stock exchange and nasdaq. our view is this is a fundamental growth story for the u.s. operators. romaine: let's talk more about that. there is a lot of speculation about the legalization effort and where that is moving. when you talk about what the market would be should that materialize in terms of how much people are going to buy, where do you see that going? sean: last year, legal sales were 24 billion. we anticipate this year that number could get close to 30. within the next 10 years, we're talking about a $100 million market. to contrast that with what is going on in canada, we think the total addressable market is 10 billion. you have 100 billion of market cap in canada. here, you have $50 billion in market cap for a $100 billion market.

the valuations are extremely attractive. 50 to 100% type growth. we just think it is a case of the mistaken identity. the reddit traders got involved with companies that could own. the real growth story are the u.s. mso's, which are listed primarily in canada. most brokerages and custody agents do not let retail investors hold. caroline: mistaken identity. the cases are growing when it comes to clubhouse mistakes. talk to up about, where is the u.s. opportunity echo where are the companies that got exposure? how would a retail investor gain access? sean: the two companies we are most excited about our true leaf and green industry. both of them are a similar

story. growing 50 to 100% with great management teams terms of where the spaces going. traditional sales metrics, traditional sales per square foot. these are people playing the long game. if you're thinking about fixing shovels, -- the sherwin-williams of cannabis, that is an awesome opportunity to find who is providing the consumables and the hardware needed to grow cannabis? every state that has has more and more growth. joe: when traditional -- with traditional consumer goods, people start to have their favorite brands. are there certain brands of -- where there are certain brands of beer. to what extent are consumers of commercial legal cannabis

developing meaningful, sustained brand affinities such that a company can capitalize on that and continue to get repeat customers or people still in the trying things different outfit? sean: in newmarket when a state comes online, there is a big novelty component. when you look in california, they are selling $100 million plus a year at an average price of $4000 per pound. that is two to three times the average selling price. people are paying up for quality. there is brand recognition at the top. we are excited as those brands migrate from the west coast to the east coast, the consumer is going to walk into the store and not just say i want weed. i what connected, i want alien labs. that is the next iteration here. the biggest trend right now is the addressable market is growing so fast with all the new

states coming online that the multistate operators are the ones who are benefiting and making those sales. caroline: is there going to be consolidation? sean: absolutely. you have a lot of second-tier players. companies that have a foothold in one or two states. brands that have a small footprint. you are going to see consolidation in the near term. this is the year where companies need to get -- establish their position in the race for the next five years. we think we are going to see a lot of aggressive moves. romaine: with regard to the way some of these companies look like in the end, do you envision a world whether as a demarcation between the growers and some of the distributors or will they be all one type of company? sean: a lot of that depends on not just what happens at the federal level but also interstate commerce. if we get into a scenario where

you have interstate commerce, it is a lot cheaper to grow in warmer climate. we do think there will be dedicated growers in that scenario. in this scenario where there is no interstate, is, which we think is the -- interstate commerce, you will have companies that have to do all three. the way the margin capture reps today is the actual growing product captures the bulk of the margin. it behooves everybody to grow in all of these states for the foreseeable future. caroline: great to have you back with us. navy capital ceo. meanwhile, coming up, tech titans and wall street executives slated to appear before a house panel next week to discuss the retail mania we have seen the past few weeks. we get the view from washington.

that is next. this is bloomberg. ♪

caroline: in a week from today, we will get the much-anticipated hearing in washington that will dig into robinhood and the good old retail frenzy we have been reporting on. who are we going to hear from you echo joe: all kinds of -- who are we going to hear from? joe: all kinds of big names are going to come to d.c. to talk about the scandal that has affected gamestop shares. syria's names expected to speak. ken griffin -- serious names expected to speak. the reddit ceo. everyone must understand better

the dynamics of what is going on. romaine: all eyes will be on this next week. joe: joining us with more to discuss this is a presented it from california. -- a representative from california. thank you so much for joining eyes. to start, it is very interesting. it is sort of a wall street story. it is also kind of a tech story because of the way some of these new fintech companies, many of them in your district, started to get into trading. are you concerned about the idea that companies with a move fast, break things in those -- break things ethos may pose a danger when it comes to the handling of their actual money? >> i am in that they need to be regulated. this is not just with fintech. it is more broadly. it has value, but we have seen technology have unintended

consequences. my concern is these companies have proper disclosure and proper reserves. robin heard basically had a liquidity problem. they did not provide proper disclosure and they did not have any planning for what would happen if they had missed demand they could not handle. caroline: it is interesting. you put out a statement saying we are done letting hedge fund millionaires treat the stock market like their playground. some of the capital requirements -- do you think it is anything untoward? is there anything that makes you worry the relationship citadel and robinhood have is somehow a benefiting wall street rather than the retail investor? >> we do not know. i do not want to make an unfounded allegation, but i do know the clearinghouses have a relationship with the hedge funds. the clearinghouses often have

requirements of collateral and hedge funds can meet that. a lot of the retail investors of robinhood cannot. we need to look at what the relationships were. we know robinhood and other firms sell data to hedge funds. we need to know what the issue was. do i think someone from said about -- from citadel called it and said you have got to stop trading? probably not, but there are a lot of gray areas. did they have any conversations with anyone at citadel? all of this has to be investigated and i think the financial services industry well. romaine: there are people that look at what transpired over the last few months and say, if individuals on some individual bases lost money or made money, it does not matter as long as there is some sort of systemic risk to the broader market. is there some sense you have so

far that there could have been or would be some systemic risk by allowing these practices to go on? >> it does matter if you don't have a lot of money. if you are a student or just getting into the market. for many people, this makes a huge difference. and are not really looking at it from a perspective of folks who are on reddit. the biggest systemic risk to our economy in my view is the over financial eyes asian, the speculators asian -- the speculization. why are we having that capital but electric factories, solar plants, new industries? which we could if the government

of the federal financing bank -- that is the take away. joe: this story started with a hedge fund, melvin capital, losing a lot of money on a short position. people who bought gamestop at 400 also lost a lot of money. are you concerned about the perception it creates when an investigation into a specific trade or starting with a specific trade looks like -- here's a situation in which some retail traders took a big win over a wall street hedge fund and now suddenly the government is getting involved. are you worried about the perception that government is out to protect legacy institution capital? what caught the country of that -- legacy institution capital? >> what caught the country's imagination is the little guy or students who are not professional day traders won.

the hedge funds lost. robinhood shuts down the trade. people are saying this is really problematic. i do not think you have to have the same standard for a retail investor as for a hedge fund investor. a lot of the manipulation is being done -- they will go on tv shores like yours and sure a stop. those conflict of interest need to be looked at. my view is most people are saying, finally people have woken up to some of the abusive practices of wall street. caroline: that is a practice that bloomberg takes incredibly seriously. i am interested, carson blocks is putting out a full piece saying this element of retail trade frenzy could be a political instability. you think it could be? >> how so? do i think there are shorts that

are necessary for allocation of capital? yes. do i think there is also predatory shorting? absolutely. the job of government is to make sure we are discouraging the predatory shorting of stocks, the financials speculative bubbles while also recognizing when a company is doing badly, you do moot as you do need capital moving from one place to another. there are things we can do like a financial transaction tax on daytrading that could help prevent that kind of speculation. i am not sure what the instability he is referring to is. caroline: we thank you so much for your time. really interesting thoughts ahead of an important focus next week on the retail frenzy. talking of instability, geopolitical risk, are you ok on twitter right now?

joe: i have a bunch of impersonators. a lot of them are making jokes. you know they are not me because i only posed very serious things. just ignore anyone who is trying to have fun on there. i am dealing with that. romaine: you have a team of people? joe: we are all working on it. caroline: just a block and notify twitter. it is a serious subject. what are you looking at for tomorrow? what is the person whose stock -- who is feigning you on twitter is going to be posting about? joe: it is been two weeks since it has made a new high. that will be the first thing i checked tomorrow. very worried. caroline: he is too busy -- that does it for wooded you miss. joe: bloomberg technology is up next in the u.s.. romaine: have a great evening.

this is bloomberg. ♪

emily: i'm emily chang in san francisco and this is "bloomberg technology." coming up, we have a pack show of some of the biggest leaders in technology. from my conversations with the uber ceo, and lyft president and cofounder, to the social media future with kevin mayer. of course it was a giant day for bumble.