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welcome to squawk alley, joining us john steinberg, john, good morning. ford is out, kayla tausche is in, the markets are up. up 262 in fact been close to session highs. stocks are rallying after friday's sell off of course when we closed down 280. right now it's on track for the first 1% gain since the end of march, bob on the floor to tell us what's moving. >> good morning, carl, down 280 on friday and up 260 today. little bit confused about this? people are debating why we were down on friday. but let's just see what's up today. i want to point out that this is a big rally today, industrial and largely tech, that's what's dragging us up. everything is up, particularly the tech and industrial. ibm, cisco, microsoft, boeing, 3m. rare will tote a lot of big movers. that's what we're getting out.

crude's breaking out to new highs for the year, we have another factor dragging up on the energy names. burton was a little better than some feared. feared as is a good word to use. the big oil names, conocos, marathons, everything's being dragged up. why was the stock down so much on friday? there was concern about changes in the chinese margin rules. remember, they regulated ban margin financing and over the counter stocks on friday in china. see the shanghai markets here to the downside about 2%. they were closed on friday when the announcements were made. a lot are citing that for the weakness. what seems to be forgotten, not only are we rallying in the united states, we're having an excellent day over in europe. now remember, germany looked a little bit jittery at the close on friday. it had been down two days rather noticeably, and a lot of people were wondering whether the rally was over, you're looking at it today here, as you can see, it

too is rallying essentially 2%. a lot of the debate is not why we're rallying today. the market doesn't stay down for long. near the high end of the recent range and people are talking about china. and their attempts to stimulate the economy over there by changing the reserve requirements and at the same time, not let the stock market rally kind of get out of hand by instituting some limits on over the counter trading. little bit difficult for the chinese to understand over there, back to you. >> thanks a lot, bob. bob. first up this morning, comcast and time warner cable set to sit down with the justice department for the first time on wednesday hoping to keep the over $45 million merger on track. they have not met face to face, in the more than 14 months since the deal was originally announce. justice and fcc remain concerned that the combined company would have too much power in the broad band and online video markets. comcast is the parent company of cnbc and a lot of interesting questions about what this means.

what this could mean potential lil as the process work theous. >> it's interesting in netflix and hbo and the over the top networks. this is the issue that the justice department is looking at. my feeling to date has been they're going to lose the traditional set up of channels. we're seeing it again with verizon vios where they're breaking the bundle. now the department is investigating how did comcast handle the hulu proposed sell that occurred almost a year ago? did they theoretically block it? they didn't to want create another competitor. if they find out they did that, this could be bad. >> what you're referencing is comcast's agreement as part of the purchase of nbc universal it would be a silent partner in its hulu stake. it's interesting john when you think about how much has changed from 14 months ago to now in the media landscape, in the net neutrality, policy landscape, how much more is at stake now than maybe a year ago? >> and how much more competition is there now? we talked about the microsoft

antitrust investigation to the eu, this is a phenomenal waste of time. let comcast and time warner do what they want. maybe they'll provide better service, and you know what, if they're unfair, believe me, the wireless providers will have at them. believe me, somebody else will have them. technology, if you treat customers badly, technology provides an alternative. >> discussion about the no break up fee and how easy it would be to walk away, would you advise that? >> no, i would keep fighting. >> really? >> yeah, they're not in the new york market. it's a bigger market in size. it's where all the advertiser buyers are, all the media partners on. its been a huge weakness for comcast not to be able to have something in this market that every media buyer and every media agency can look at and see. i say keep fighting. >> the news came out friday that the two parties were sitting down with the justice department to hammer out a deal or at least see where the situation stood, both stocks went down. which is an interesting interpretation when you think about the fact that comcast as an acquirer would not be then

spending $45 billion, some might say that comcast stock should have gone up in the case. what do you interpret the market's reaction? >> the market thinks that comcast needs this and needs to continue to have scale and as they become more and more of a broad band provider and less discretion over what channels get put in front of people. they need to have the market. investors want them to get it. >> you think they need it at all? >> absolutely. they'll survive without it. at this point, shh months into this thing. might have a conversation. i assume they'll go in and offer the justice department whatever they want in terms of concessions, vesttures, maybe they'll have to flou more completely with net neutrality and agree to everything. i assume they'd be willing to do that. >> we'll find out more what gets said on wednesday. in the meantime, elon musk almost sold tesla to google in 2013 for about $11 billion. the book says that in march of 2013, elon musk reached tout larry paige because model s sales were struggling. he was worried the company might go bust.

apparently musk and paige shook hands on a deal before negotiating over specifics, and while they negotiated, tesla then started selling enough cars to earn a profit, thus making the sale no longer necessary. at the time he owed quite a bit of money to the department of energy. and it sounds from the way the book counts it is that musk walked away because he no longer need a savior so to speak. >> like in silicon valley, multibillion dollar company when he talks about the selling the company. that's like tuesday at noon. that's every one of these companies talks to google and facebook about doing these things. it's unfortunate already google to bought the company for 6 billion, and committed to $5 billion in investments. so it really isn't an $11 billion deal, it's a $6 billion deal with investment. it would have been awesome for google. huge growth driver. the cars are a commuting platform as anything else. it's what could have been. it reminds me of when microsoft invested in apple and saved apple. that's what this is. too bad he didn't do that as

well. >> does every startup however big or small need to have a backup plan? friend that could potentially buy you if the sales aren't good enough? >> it's also a back up plan. how bad would this have been? if elon sold this for $6 billion, it would have hardly been a failure. wouldn't have been the $26 billion company it is now. some would argue, that's an insane price for this. given that facebook bought it for 19 billion and google loves batteries and solar panels, this would have been the what's app. >> urban discovery, right? >> yeah, and they ended up going into the self-driving car market. may have been further along at this point had they done the tesla deal. >> groupon was that a $6 billion offer from google? all were buffed $6 billion deals. >> the groupon was a government thing. i think they really wanted to do that deal, and just didn't feel they could get it through anti-trust approval. google tries to do less things that gets caught up in all of this stuff. >> this anecdote is from a book

about elon musk that is set to come out soon. it's in bloomberg, and the quote about this said paige said when google considered buying tesla, a car company is far from what google knows. >> and how much, how much times change, right? apple wasn't going to make a large phone. granted, that was tim cook and not steve jobs, but you really have to be careful in technology to say what you won't do and what's too far up field. they did go and ultimately was larry page going into cars. >> interesting, finally, and in case there was ever doubt, netflix will continue to bet big on original content. according to the times today, the company's planning 320 hours of original programming in 2015. that's more than three times what it offered last year. in an interview with the times, reid hey stings say it is an extension of the company's long-term view that the internet is in fact replacing television, quote, we've had 80 years of linear tv, and its been amazing. and in its day the fax machine

was amazing. the next 20 years will be this transformation from linear tv to internet tv, echo of what he said during the earnings call. >> and netflix is not a competitor to hbo. netflix is a competitor to comcast. netflix is a cable system, as the cable system's become broad band systems. let me explain. if you put on bravo right now, you have a whole set of shows which are like celebrity entertainment or stuff like that puff you have an entertainment show. you have a house of cards which is a political thriller, these shows have nothing that ties them together and very different audiences that are attracted to each one of them. that i think netflix is broader right now than we ever anticipated that it would be. certainly when the first slate of shows like lily ham and how was cards came out. >> doesn't own up on the pikes. it still needs broad band and distribution platform and it needs to be friendly with all of those partners. it's not necessarily, everybody

needs something. if you do that, the government gets involved with you. if you're a book publisher, you need amazon, only in the internet where your platform depend sis make you weak. reid haystings could do a deal with the wireless carriers. he could do a deal with a variety of distribution mechanisms and increasingly we're see mrg emerge right now. >> stock at 569, we talked store long about its inability to get over 500, and with one quarter, one quarter's results, goes to 569, some argue, take the money, stop investing in organizal content and get a better list of movies, is that fair criticism? >> i don't think so. i think the original programming drives the consumption. these businesses are feed the beast type businesses. the beast is always hungry, new shows, never ends, it's like my business, sell more ads, the problem is you never get any of the lock in effects that allows you to keep going forever. with networks like facebook or google, new platforms, switching

opportunities. >> worth noting, feeding the beast isn't free. barrens over the weekend says to be aware of the stock because acquiring the content licensing, and the content and developing the content will get more expensive, which seems conventional to say. >> the price on the stock is crazy. i mean, i wouldn't go nearby. someone once said, you can like tesla and buy the car and not have to own the stock. so that's sort of the camp that i'm in right now. >> although if you did, you'd be up 76% this year. >> is it ten years, 3,000%? 3,000 plus, i'm trying to remember. it's a long way. >> he did a bold thing. got out of dvds, people would not have done the clay christianson, disrupt your own business to find the future. netflix did that. remember all the pain he went through. >> blockbuster. >> futurists and whether or not having a futurist on staff could have saved blockbuster back in the day. >> and give them credit, going

and doing hbo now over the top was tremendously controversial with all the people that are paying him fees. they realize they had to do it it, he's taking the pain, look at verizon right now. you have to have the fights and give that a shot. >> good to see you, when we come back, amazon, facebook, google, microsoft, just a few of the big names reporting earnings this week. we're going to tell you what to expect. plus google wallet users, rest easier while the company's mobile payment service just got a whole lot safer. and a surge-free guarantee. one ride sharing service will tell us about its plan to take on yuber in new york city, and across the country. dow is up 251, "squawk alley' back in just a minute.

markets starting with a rally. dow up 251 points, s&p good for about 1%, 22 points, all ten s&p sectors in the green today, nasdaq is up nearly 60 points at this hour as well. this week though, tech earnings will be taking center stage, amazon, facebook, yahoo, just a few of a large slate of names set to report in the next few days with apple looming next week. what should investors expect from some of these tech names? here with us now is dan ives, technology analyst at dfr capital investments great to be here.

>> we can't talk about investments without talking about ibm. leading with 30 points. we've be hearing that enterprise spending and i.t. is cautious at best, does that continue? >> yeah, specific issues as well, i.t. techs were late to the game on the cloud. you're seeing a bipolar spending environment where the traditional companies are getting a lot more of the pain, and something you'll see tonight. >> 282 is the eps estimate for ibm, revenues, just under $20 billion. we've seen revenue be the big disappointment. do you think the now analysts started recalibrating their expectations for this company. >> the street has recalibrated, at this point it comes down to what's the game plan going forward. it's not just ibm, how do they get successful in the cloud. we believe it sets the stage for a massive cycle as these large tech players that have more cash in some countries look to

acquire in areas like cyber security, big data, and cloud. >> it's gapped lower after the past six straight quarters, but it's close to the highest levels, it would be the biggest highest close of the year so far. >> i think you have to get into a situation with a lot of names, evaluations, what's baked into the name. and who are truly the winners and losers, no one sent there a winner, now it comes down to valuation, which of the large cap names will be successful. and you've seen some of the bloom come off on microsoft. now you've seen the shift to the ibm to the oracles. >> amazon's coming up later in the week, there's an expectation the company will start to open the ka moe know a little bit, give more disclosure around web services specifically, do you expect much or do you think you're going to have to wait and see exactly what the company decides to share with kpups. >> more transparency at this point, for a lot of the tech companies is the step in the right direction. the big question too is in terms of enterprise, how amazon, you

know, plans to sort of go forward. how much of a competitive threat they are, and i think you're seeing a lot of these companies now starting to see some head winds as it's an i.t. spending environment that's still soft. and you're seeing the significant a. spending in areas like big data, cloud, cyber security, apple continues to be the main share gainer, and i think that's really what investors are focussed on. >> you mentioned apple, up 15% this year. few downgrades lately that say the cycle it is peaking. >> view that we're in the second, third inning of this all playing out because that's really with the trees and apple. it's not about iphone 6 if they beat by 5 or 10 million, it's going out in the next year or two, looking at apple pay, china, wearables, apple tv, and i believe that from a gross margin perspective, you do analysis, that could add two

dollars to numbers in 2017. apple continues to be the gold standard. i think we're just in the early parts of this massive cycle. >> anyone who doubt yourself bullishness on apple should read your note from last week, dan, on friday, we will get shipments of the watch. what will we learn over the the two-week shipment period. >> it was massively more than apple and verss were expecting. in terms of just presales, but obviously everything starting on friday. there's a lot of skepticism, just like with iphone and ipad, it speaks as wearable market where ultimately we believe this is going to be 5, 10% of revenue going forward. we'll have apple watch ourselves as we were preordering. >> lucky you. >> i got the sport version, not the gold version. >> we have our work cut out, dan, good to see you. >> grat to be here. up next, starting google wallet users can rest easier. we'll explain why. one eye on the markets, right now still today isfully

rally mode. dow off of its highs, up 242 points as we kick off a huge week for earn wx roughly a third of the s&p 500 will be reported. "squawk alley" will be back in a minute. thank yoand my daddy. sailor, thank you mom, for protecting my future. thank you for being my hero and my dad. military families are thankful for many things. the legacy of usaa auto insurance could be one of them. our world-class service earned usaa the top spot in a study of the most recommended large companies in america. if you're current or former military, or their family, see if you're eligible to get an auto insurance quote. man: you run a business. could be any kind of business. and every day you've got important decisions to make, like hiring. where are you gonna find those essential people you need? with ziprecruiter, it's simple. we post your job to over 100 job boards with just a single click,

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according to various reports, your funds in google wallet are about to be fdic insured. if you have a balance on google wallet, your money will be safe. payments, platforms aren't legally required to be fdic insured since they primarily transfer money instead of holding the balances. with so many competitors, building in the digital wallet space, insuring funds could be the edge google needs to stay competitive. we reached tout google, but they did decline to comment.

what is interesting carl about this, google wallet itself, is not fdic insured, rather it'll be keeping your money with banks that has fdic insurance. we're not quite there where they want to be regulated by banks, but they need these distincti s distinctions. stock 543 obviously has been pressured, been below for a couple weeks now. earnings from google come thursday night along with amazon and microsoft. europe is about to dploes about five minutes. interesting weekend over there, simon hobbs is here to count us down. >> west european stock markets bouncing down, they're only up about 0 .6%, obviously what's happened in china is the basic weasel stocks. greece remains front and center. we have a decree from the greek

government from all municipalities to send the spare cash they have over to the central bank. we knew this was coming because the deputy finance minister said it last week, but it is still an indication of course of how tight finances are and the greeks are running out of money. seventh straight session you've got selling or dumping. great term depth. meantime, this is a list from rbs of the bills that he has to pay. they say that the next three weeks are going to be absolutely critical. the red line's for greece, it refuses of course to cut pensions or wages or introduce new taxes or sell state access and can't do a deal with the rest of the group to unlock the cash it needs to pay bills. friday was supposed to be a deadline with the meeting. now that seems to have kind of just been passing and people don't expect resolution there. the other plus point though that we have now, and again, this is from the rbs note. just because they miss one of these bills say to the imf does

not mean you get a greek exit. it has two-month's grace period for this. and of course the helm of the greek economy does not have the depth. they would have to go back to a referendum or general election. meantime, banks in europe are amongst those gaining today. we had some upgrades coming through, and there's still this talk about the popular banks being evolved in mna, and credit obviously mike and that environment. you see a lot of these have gained during the course of the session, and john malone is expanding his interesting in telecon in europe paying $1.4 billion to take over the belgian from the netherlands. this is the vehicle that is majority-owned doing that deal. but in essence guys, a small bounce back after friday's big falls, back to you. thank you very much. when we come back, another ride

sharing company's really compete against uber. one is trying with a new method surge-free pricing and the company behind it is going to join us. dow is on track for the best day so far this month. currently up 244. we're back in a moment. [ male ] we know they're out there. you can't always see them. but it's our job to find them. the answers. the solutions. the innovations. all waiting to help us build something better. something more amazing. a safer, cleaner, brighter future. at boeing, that's what building something better is all about. ♪ if you're looking for a car that drives you... at boeing, that's what building something better is all about. ...and takes the wheel right from your very hands...

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good morning erin, i'm sue herera, here is your cnbc news update. four workers and six somalians

were killed when six terrorists attacked in somalia. al shabaab claimed responsibility for the roadside bomb that blew the roof off the van, four other u.n. workers were seriously injured. saudi-led air strikes continue to reign on yemen causing explosions in the capitol city. the blasts were the most powerful since the saudis began their air campaign. one of the targets was a missile base six miles from the city. israeli prime minister benjamin netanyahu was given a six-week extension. he's made progress in negotiations, but he needs more time. and he's back. tim tebow expected to sign a contract with the philadelphia eagles today. tebow seen there going through the philadelphia airport last month when he worked out with the team. last played during the 2013 preseason with the new england patriots. and that is your cnbc news update to this hour, let's get back to "squawk alley."

uber competitor coming out with a major initiative to ban all surge pricing. this after the on-demand black car service cut fares by more than a quarter since shifting efforts to manhattan, but in a city dominated by the likes of uber will the end of surge pricing be enough. the ceo is here with once great to have you. congratulations on moving upon. >> sounds like there's a dog fight. at least one you'd like to create. >> it's interesting. first of all, we're known in new york, it is by far the largest international player and the largest international player outside of north america. we expect to hit about half a billion dollar in revenues this december. we're already profitable internationally, and we look at the knowledge and leadership internationally and brought what we can to new york, and

practicely starting from september, you have an alternative now in new york, having the same professional driver and a car, fares further right. one of them is a big announcement is that we introduce no surge guarantee and we never surge. so whenever you rat gett, it'll be fixed and predictable fare. >> is that specific to manhattan or is that the model all around the world? >> this is the model around the the world. we never surge. we believe in fair pricing so we can be assured what will be the final quality you get. whatever you take from a to b, it'll be the same price, doesn't matter the weather, especially today, and what time of the day it is. >> yeah, of course, on a day like today, uber and taxis are popular. i'm wondering though, we just got data a couple weeks ago about the fact that uber is now more popular than the normal yellow cab service. scale seems to be important, but where pricing is concerned,

feels like a race to the bottom. how low do you have to take prices to compete with that type of scale? >> first of all, very interesting, what you say is absolutely correct. you have one fact is that new york is 50%, almost 50% of entire tax industry in the united states. it's a huge market. now in this huge market, you have practically uber who is the big player right now, and by definition, it's not competitive. it means that you end up paying extra. so when you think about that you need to be taking prices down, when you have only one player in the market, you really paying extra. an example is gett, when we launched in new york, we are not surge, right, and we pay our drivers bigger fares than uber. while doing so, we're not losing the money rights. it shows you how much space in this left when you have one player. competition is clearly helping to get you better price

predictability, and also gett for the drivers, better job. >> would you argue, we gone back and forth on how high the barriers are to entry in this business. you have to get the drivers, that's one part. but the algorithms seem to get easier. is there going to be more competition in the space? >> in reality, it really takes only a few players can be in the market, as you mentioned, you need to get to the critical points where your cars are available by five, seven minutes. that's where gett is right now in new york. whenever in gett in new york, we are close by five to seven months. it took about 2,000 black cars, licensed professional drivers who is riding around new york right now. whenever you get gett, five, seven minutes, especially next time uber will be surging, and i really recommend to try gett. >> elsewhere in the united states, do you plan on expanding this model or just in new york? >> the end of the market is really difficult in a way that you have to create a critical

mass in success. and we want to focus entirely on new york to continue the no surge flat guarantee pricing, and once it's gett attraction as we've seen internationally in london and other markets, then we will expand to other cities too. >> obviously uber, $41 billion valuation, they're raising money all the time. do you think -- why would they be vulnerable at all or maybe they have extended themselves so far internationally and have fires to put out that they're distracted. what's your thinking on that? >> first of all, uber is amazing. one thing people may be less really know about, it's the second player in all international locations. usually second by far compared to the local champions. it's how marketplace behaved. now back to the u.s., i think definitely position is super strong, but that's exactly where the competition is favorable to

the consumer because once you have an underdog who is offering an alternative, this is when everyone wins, drivers, consumers, and us, that's what the gett is doing in new york. that's exactly this. >> we'll see thousand plays out. interesting, thank you for coming on and please come back. with gett. let's go to morgan brennan for a quick market flash back at headquarters, hey morgan. >> hey kayla, check out shares of groupon, 1, 1.5%. slightly off the highs. the online coupon provider will sell a stake in the south korean ticket monster for $360 million. that's being purchased by kpr and hong kong based partners. for the year so far however, shares are down more than 11%, back over to you. >> morgan, thank you very much. when we come back, entire brand sold out in a few hours. in store and online. behind the demand and the trouble with target's lilly

pulitzer collection. also still watching the markets, dow hanging with a gain of 243. and rick san telly, what are you watching today? >> well, everybody's talking about this, greek exit, and we're going to dig down deep on the notion there is no alternative regarding stocks and interest rates. and maybe some surprise end means should conditions line up, after the break. it's more than a network and the cloud.

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busiest weeks for earnings. breaking down thousand flay all. global markets are heating up too. around the world with jpmorgan's funds emerging market strategist. then apple and google locked in a battle for your house. who is winning the race for the smart home? it's all straight ahead on the half. kayla, back to you. >> all right, thanks, michelle. the new lilly pulitzer may have been too much of a good thing, selling out within hours in stores it and online. courtney reagan is live outside of target store in edgewater, new jersey, with a closer look, courtn courtney. >> reporter: that's right, kayla. target has done about 150 designer collaborations, this lilly pulitzer might be the most successful. the social buzz was something they have never seen before. and many of the stores sold completely out of the merchandise within minutes. it took a little bit longer online because of some issues that we'll get to, but the store

we're at behind us may actually be one of the only ones that wasn't opened yesterday on sunday for launch day because of local blue laws prohibiting retail shopping. we have about 50 or so folks lined up. the first in line was here at 11:00 p.m., sleeping in her car and 11 minutes after the doors opened, it was gone. shopper traffic on the website overnight caused issues early sunday morning. because of black friday comparable traffic, target says the lilly collection wasn't fully shopable online until about 5:00 a.m. the retailer in fact neared traffic, which means it limited the number of folks that could be on the website at any one time. the website never crashed, but it purposefully took it down for 15 to 20 minutes around 4:00 in the morning in order to get that full collaboration online. target is apologizing for inconsistent web experiences, but not for selling out. ahead of the launch, target's chief merchandising officer told

me she did in fact order a bit more inventory for this collaboration than for others, and had intended for the collection to last into may. >> success to us is the excitement for our guests, and whether they love what they have to offer, much less about the sales. now we think it's going to sell really well and we want everything in our stores to sell, but financially it's not that any one collection would move the needle. >> reporter: now analysts all over says ul all of this buzz is exactly what this retailer needs to get back that target cash e. sure, some will be disappointed with the experience or the merchandise that was left, but that's what happens with these collaborations, and all in all, wall street thinks this was a really good thing for target. back to you. >> yeah, well the share price this year, certainly would suggest that, thanks so much, courtney. courtney reagan in rain outside a target in new jersey. let's get to rick santelli,

hey rick. >> good morning, carl, we've heard so many times, it's definitely true, there's a scarcity, real shortage of collateral around the globe. part is due to the global slow down, investors holding on, pension funds, insurance companies, but then also, think qe. no matter what country, it's pulling good collateral off the system. as it goes, the scarcity makes the fixed income market especially high quality sovereigns kevlar coated. i'm not sure i buy it. i tell you why, does scarcity always trump logic? i mean, if you look at the interest rates around the globe, they're probably way too low. and what happens if stocks have a reckoning? well we all know the only hedge for down stock is the interest rate market pushing them down lower, but, what happens if interest rates for whatever reason are the first market in that scenario to go hot on the sell side? pushing rates up.

there's a permutation where if rates move up because of treasury selling or high quality sovereign selling around the globe, despite liquidity and scarcity issues, yanl it's going to farewell. today if you look at david stockman's blog, he shows us another possible vision of what could go wrong with some of these sovereign rates. and his notion was, how much are the big countries, the good economies in the euro zone have in terms of greek exposure? here's the top five, germany, 92 billion, 61.5, italy, 42 plus for spain, and netherlands, whisker under 20 billion. here's the key, look at interest rates. seven basis points under tenure france, 36, spain, 146, netherlands, 22, so in his scenario, if that exposure comes back to haunt these countries, how is that going to fare with their own ultra low, unrealistic

not at the timered to price discovery interest rates. that could be the glitch. whatever it is, remember, if equities go hot on selling first in your land ending of the global sovrns, you're okay, but if the sovereign market goes hot first, then the outcome is much more uncertain. kayla, back to you. >> all right, rick san tellfully chicago, rick, thanks. when we come back, can legalized marijuana turn into a $100 billion industry? we'll ask one vc who joins snoop dogg for a pot delivery company. we're watching the markets up for the first day in three all major averages up for a gain of more than 1%. "squawk alley" will be right back.

it proved to be a nearly $3 billion boom for states that legal ieds marijuana last year and projections suggest the marijuana business could top $3.5 billion this year. as such, the new pot economy has brought a wave of entrepreneurs looking to cash in. thousand safely store marijuana and keep it away from children. >> my name is nick, and this is my company. i knew this industry was going to take off, so i created a product that's compliant, that marijuana dispensers can use to keep themselves in good light with the regulators.

. pop-top bottle. it's a different alternative to a medicine package container. regular bottle is not nearly as cool as this pop top bottle right here. you don't lose your top, and as you know with certain marijuana users, there's sometimes forgetfulness that goes around. this helps solve that problem. here we're inside the warehouse, this is where we store thousands of boxes of bottles, containers we deliver on a daily basis. we're selling about a million bottles a month. we have about 20 employees across three states. the revenue will be about four million. access to capital on the public markets right now is huge for this industry. that's definitely one of the options we're considering. >> check out the rest of our series on marijuana, cnbc.com/pot. well could legal marijuana soon surge to a $100 billion marketplace? that's the prediction of at least one venture capitalist who's already investing in the sector. he joins us from one market in

san francisco. he's david chow, co-founder and general partner, it's good to see you this morning. >> good to see you, kayla, good morning. >> we should note, you were one of the lead investors in a $10 million funding round for the pot delivery startup. you've been active in the space. i'm wondering where you're seeing the most growth right now. >> well, we're seeing a lot of growth, largely in the medicinal delivery of cannabis. and what's amazing is it is the largest in the bay area and they have the best team. what's really interesting is the market is going through a confluence of three factors, one is that the medicinal market, and of course the legalization, the sentiment of the nation has changed. secondly, there's a lot of easy consumable goods now. the cannabis comes not in the weed form, we have the image of

rolling the joint, high-end chocolate form where i mean you can't tell a difference between a nice, beautifully-packed chocolate or in a cannabis chocolate. and then the third, what interested us as venture capitalist, there is a next generation delivery platform using technology to deliver these products to wherever you are. and i think it's great because, you know, a lot of the despens ris where you can buy these products are very difficult to find and they're not necessarily in a great neighborhood. so it's making it more accessible to the people. >> hey david, is the sweet spot in working specifically in those jurisdictions where it's legal or in actively trying to expand that pie? going to states where it's not yet legal, but where you think it might be? >> no, currently we will only operate in states that are legal in terms of both medicinal or

recreational. and i think we do believe that in the long run, more and more states will open up, legalize, and we will go, you know, one step at the same time into those states. >> david, before you joined us, we heard from a bottle company, which is a storage technology, and its founder was saying that the company is compliant, it's an interesting word. i'm wondering, given that there's such different treatment of the marijuana industry from state to state to be able to say that you're compliant, who's door do you have to knock on? >> just so that i understand the question, the compliance in terms of the cannabis market, each district, each town, each state is very different. and that's the wonderful thing about ease because, you know, ease and the ceo keith understands the nuances of these, you know, constraints in each area. and we adapt to that. and that's what makes it more

difficult, but at the same time, it makes the entry barrier much higher for any other start-up to come into the market quickly. >> it's been public obviously david that you were part of ease's latest funding round, how many entrepreneurs are sending pitches to you, how busy are you right now fielding, fielding decks from other startups? >> i'm sorry, i missed the last part of the question, how many -- >> how busy are you -- how many incoming offers are you fielding from entrepreneurs who funding, who need money and say that we know that dc inventers is active in this place, what can you give us? >> yeah, so, you know, i think in the cannabis base, there's a lot of activities. and it's growing. but you know, overall, you know, we are kind of in a mini tech bubble now, and the entrepreneurial activity is probably as high as it was in

1999. you know, and when you're inside a bubble, you know, you can't smell the soap. but i think, you know, for at least for the next 12 to 18 months, i think the bubble will probably continue, largely because i think a smart phone is still the fundamental technology that is enabling many of these plays because you can just, use your smart phone, click, click, click, and get whatever you want. and people want many things, including cannabis. but, you know, that smart phone penetration is going to probably slow down over the next 12 to 18 months. and i think it will start slowing down. >> we've been hearing that sentiment a lot, david, we appreciate your time this morning. on an important day for the cannabis industry. >> thank you. >> david choa of d christian inventers. why amazon prime is so important. plus watching the markets with the dow up 238, don't go away. drivers to your marks... m] go!

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out those numbers, it's a big driver of growth. the analyst says the accurate growth is a key reason amazon is among his favorite names. the stock has been stubbornly in that pattern of 360s to 380s. >> and while the company reports earnings on thursday, it's promised a biltmore transparency, but doubtful it'll go so far as to break out the exact number of subscribers to prime. >> we'll see. in other news, in 2015, bakery is trying to raise a new round of funding. tartin, they reached cult status in the bay area now merged with blue bottle coffee, that's a name new yorkers will know. it was founded in oakland. the combined brand plans to open locations in new york, tokyo, and l.a. within the next year. blue bottle coffee has raised two rounds to help its expansion, including a $26 million raise last year. including the likes of instagram's kevin, twitter co-founder williams, and no word to the outpost here in the city

while they'll become that. but interesting news. >> yeah, whole swap of america saying what are you talking about, never heard of that. meantime, ibm tonight, that'll be a big story for tomorrow. in the meantime, headquarters, check in with michelle and get the half. welcome to halftime report, i'm michelle cabrera in for scott wapner. jim lebenthal, jim teranova, josh brown. what are we think of today's rally? what is driving this? chinese stimulus, earnings season, let's go. >> central bank policy. it's globally coordinated efforts and it continues to what happens at the end of the month is two key central bank meetings coming. that's the federal reserve at the end of the month. think about this for a se