services and all of the macro numbers are feeding into the picture of where we are in the u.s. versus the rest of the world and if the first quarter ended on a decent note. >> the picture seems to have gotten a little bit brighter of late. >> yes >> good to see you both. >> that does it for us it is time for "fast money" from the nasdaq in times square "fast money" starts right now live from the nasdaq marketsite overlooking new york city's times square. i'm melissa lee. face book shares soaring as instagram's new e-commerce feature is expected to bring in billions for the social giant. we've got all of the details and plus president trump threatening to shut down the u.s.-mexico border and it could have a huge impact on a number of stocks you own. we'll tell you what they are we'll start off with the airlines going up, up and away as it's about to raise its first-quarter earnings guidance. the airlines and transports taking off in just the past week so is this group signaling the

all clear for the market. >> signaling the all-clear for the broader markets and it's signaling the all-clear for the airlines now and truth be told and congrats to tim and karen. they've been on this we've talked about this now for the last few weeks and we specifically talked about it when the boeing news was at its worst on a day when the airlines were up 2.5 to 5% and we mentioned southwest air and we talked about delta in terms of valuation and now these things are starting to come to fruition you'll say, well, have they run too far, too fast? i would say no i still think there's significant room to the upside and there's no reason we can't make it back to a few months ago which is around $60 or so and i don't think it's making a statement as to what the broader market can do? >> for delta, first of all, i appreciate the compliment and it's not like it's been the greatest trade in the world over the last six months and you can look at the airlines and say over the last five years since

they re-rated to a place where people think they're running their businesses differently and there haven't been absolute returns. there have been enormous opportunities to trade and make money and at the bottom of the range, delta which is only 5% off of the bottom of the range there is an enormous opportunity. what do they tell you? revenue for available seat miles will be up about 1% and that's against available seat miles growth of 5% so basically, this is very positive and it's growing faster than the cost side of the business and they've redone their deal with delta and american express they are delta and that's a very top line accretive and probably even bottom line accretive deal for them and i think people are very relieved to hear that this is great news and this is a customary update where people tend to get too negative on airlines and that's where they were. >> is there an extrapolation or is it delta specific >> i think they're a great operating team and it could be just them. for cost, that should hopefully

bode well and we'll have united airlines later in the month and april 25th and hopefully for them and it's good news, too i think the american express portion is obviously specific to delta and even with this big move for delta, the stock is not expensive and they shouldn't get near a market multiple, but you know, at this price there's more upside i would not be a seller today. >> you asked about the broader market and we can look at the iyt and the etf that tracks the dow transportation etf and it has been an underperformer and obviously the airlines have lagged and the rails have done pretty well. we know that fedex and ups have not. there's been rotation of late and it just rallied from 180 to 190 in a straight line over the last week and a half interestingly enough, closed down today we have a one-year chart and it actually broke above a downtrend that's been in place from the highs earlier in the year.

this would be something that if we were able to get through, and we were able to see the names pretty well. that being said if it were to fail here it would be a nasty fail and delta got better throughout the day and united didn't trade so well american didn't trade so well. southwest didn't trade so well and it brings me back to last week remember when we had good news from the homebuilders, lennar and it gave it all back a couple of days and delta didn't give me any sense for that today and that would be something to keep an eye on over the course of the week. >> wti in the 2019 highs and so you've got to wonder at what point, if there is a point which fuel costs actually hurt the airlines at $62 on wti but they gave insight to that, and it looks like it's effectively neutral and some of that is offset by fx and if you look at the transports and ultimately, you've had certain parts of the iyt and certain

parts of the sector that have done well and the airlines, frankly, have lagged and fedex, the last two times they've given us updates is no good. >> the stock is above where it was when it announced the last as opposed to two misses ago, and you know, 181 or so and it went down to 175 and it's well above that now so i still think fedex is great here me, too. >> that to me is more telling of the market than the airline. >> the economy, you mean >> i think it's a closer proximity than the airline >> fedex topped that a year and a half ago and the stock was down until 34 or so percent with the stock market and it was 4% off its all-time high. maybe fedex is losing the battle maybe fedex just outfedexed itself and maybe amazon is catching up and maybe they're not just a barometer for the

economy like they were two years ago. i think you better hope that's the case because if they are a barometer then we have a problem. >> the cyber attack that hit them very hard. >> right at&t has been bad. >> think this is a ups guy talking about facebook >> yes i had a great day. i'm sure at some point today we'll get the footage of it. >> i hope not. you can't unsee certain things we might save the viewers some pain >> i'll just go back to my twitter feed >> so what is -- what is a good read on the economy? if not the transports as a whole. >> can i add something >> i thought the way the banks acted to the better data i'm just saying it was phenomenal >> what? >> no, no, when you look at j.p. morgan they acted so bad when we were in the recession, like, alarm territory a couple of weeks ago. >> no. but j.p. morgan went from 98 -- 98 to, like, 105 like that with

just two days of saying, okay. tim's been saying this, that maybe the data in asia is bottoming out. that will find its way into emerging markets and then maybe we were never so bad here. we were never on the brink of a recession. that's how the banks should act if thanks the underlying thought here and they did, they've not made back all of the losses over the last few weeks and it was a sharp snapback >> i appreciate that reflective look upon banks and it always is but if you look at the yield curve, you have this case where the five-year part of the curve folks, and the belly of the curve is the most assumptions on growth and the five-year is the part that became so overbought and it came up from 211 to 232 and it took a lot of it back yields were overly low and i don't think it was mreminiscent of what was going on >> i think the market flips out

on the yield curve as it relates to banks and they're not in a giant yield curve trade and that's only half of their business, right? so the perception was that they're not going to make any money, right the margin will go to zero and the economy's terrible and i mean, it was absurd and it's not like they were trading in a giant growth multiple in the first place. >> most people are perceiving it as a read on economic growth >> that's why i brought them up. so to me the underperformance for a better part of the last couple of months relative to a market that's just ripping and they really had been going sideways and a lot of that is the underlying fear of the slow and global growth in the recession in the u.s. and they acted appropriately in the last week where you had some of those fears fears a laid a little bit. >> the rates were at 3 1/4 the trend on rates is lower, not higher and that's in the

indictment of the economy so be it. >> all right let's get to a developing story now at the u.s.-mexico border and the significant market disruption and we could see if president trump follows through on a threat to shut down that border today the president is saying he'll take a wait-and-see approach and says, quote, we're ready to close it if mexico doesn't do more to stem the tide of migrants crossing into the united states. eamon javers has the latest. >> the president said today he values security over trade so he's willing to close the border and not clear whether he will actually follow through on this potential threat here, but we're having a little bit of a dispute open up here this afternoon between the u.s. chamber of commerce and larry kudlow, the national economic council director here at the white house. kudlow earlier today will start with his comment he talked to sarah eisen of cnbc after a u.s. chamber of commerce, vent and he suggested there might be a way for the administration to use a work around if the president does close the border with mexico

finding a way for commerce to carry on even as the border was sealed. >> we're watching it and looking for ways to allow the freight passage. some people call it truck roads and there are ways you can do that which would ameliorate the breakdown in supply chains. >> they held a conference call this afternoon and said they are not in love with that idea and there are negative economic consequences even if thatis tried. anything to allow goods to traverse the border and not people and workforce could have a problem. there are serious questions about just how such a proposal would be implemented in the first place. they pointed to an interesting statistic of the last time there was a slowdown at the border after 9/11 president bush ordered intensive security on the mexican u.s. border at that time u.s. chamber of commerce officials say that by

september, daimlerchrysler was announcing one of its plants in the u.s. would close for lack of parts. so they're saying there is a quick turnaround time and the supply chain being as quick as it is these days and you could see within days of inside the united states of any closure at the border >> it did sound, eamon with the pool ray when he was sitting with the september aej >> threatening the closure of the border in order to force mexico to be tough or the flow of migrants which he says it has been. >> this is a president who likes to jawbone and likes to look for leverage in any negotiation. he's looking for a better deal, he says, and i think if you look at those comments, was there this moment when the mexicans are doing much better in term was apprehending migrants who are coming to the united states. that seems to leave the

president a little bit of in an out, right he can say, look, the mexican government has done really well this week and therefore we're not moving ahead with this, but at the same time he's saying he's willing to 100% close the board or and he prioritizes security over trade. so pick your tea leaf there, which one do you want to read? >> eamon javers at the white house. some of the stocks with the most revenue exposure include alaska air, american tower, pepsi, norfolk southern how should you trade these stocks and it was telling to see some of these stocks and how they reacted in the markets over the last couple of days. kansas city southern was the one i had, and it had an youd sized impacts, threats that snafta would be torn up we have goods crossing and the u.s. mexico border and it was up in the past two days. >> to your point, 0.8% today this is a stock that i'm not saying people panicked, but at the height of all this rhetoric,

and this is a stock that traded down to $85 and traded at valuations that i won't say we'll never see again. with that said, now is the point where people probably will be selling the stock because quite frankly we're up against levels in september and coming into an earnings release i think you have an opportunity to be taking profits in these name ahead of rhetoric that could actually intensify. >> i look at the mexican peso and the mexican u.s. dollar and at 19 1/4 roughly. we've been very range bound. if anything to me, there is a lot of negative news priced into this between much of the move if you want to get into your effects strategy it's what happened to oil and mexico hasn't taken that back since oil recovered and i think it's a good trade. >> i agree with you. the rhetoric -- first of all, it's ridiculous policy and i think he is giving himself an out. he judges himself by the stock market if we were to see this kind of thing happen, right? to have no real -- no real time

to even try and adjust your supply chain and it's absurd and absolutely absurd. if anything trades, it's an opportunity to buy, because i absolutely can't see, even mitch mcconnell is coming out saying -- >> cat strofbastrophic, and tryo find a way around their own policy larry is talking about trying to find a way around that policy. it's ridiculous. >> you could have said the same thing in november and december about a government shutdown. >> i disagree we haven't seen many government shut downs. >> okay, karen, if you think of the potential adverse effects to the potential economic situation they're pretty similar and things that logically don't make any sort of sense and we can look back to a few months ago and say that is really a stupid -- >> do you think the equivalent is shutting down the entire -- i'm just saying whatever momentum these guys have, it has

the potential to shave off basis points from job. don't forget the u.s., mca jiggy, but i would have thought they should have factored that in into the december 31st closure and it still had an adverse effect and we're still recovering from it a little bit. i think you have to hold them at their word and it could be a real bad thing to happen midyear. >> 1.2 billion of daily economic activity would grind to a halt should the border be closed. on top of that, you mentioned usmca which is not a potential auto, and there are other trade wars brewing and what can all these things do collectively to economic growth. >> agree i don't think the market is pricing in any of that so let's be clear

the market is not each really staring down the barrel of auto tariffs. it's 2% off its all-time highs and has taken back the concept that we don't believe this is going to happen and it's jawboning and yes, if it does happen there is a substantial inquiry. >> here say conspiracy theory. >> i love this >> interesting how larry kudlow is okay with a 50 basis point cut on the fed to make sure that economic growth can continue in the face of all of these potential obstacles. >> but then today he backtracked. he said he was misquoted >> we'll have to pull the tape >> i was sitting on set with larry. >> we asked him about a 50 basis point cut. >> so paving the way can i play dumb here you're basically saying, let me connect the dots and he's ready to do what he has to do on the border and close it up and we have the fed behind us how's that >> free trader >> coming up, facebook on fire that stock soaring 3% after one

analyst said its new instagram feature could be a major disruptor in the e-commerce space. plus lyft as the newly public cut of failing to impress investors. what is driving this stock the traders have clues and a big week for elon musk is due out any minute and elon musk set to go head to head with the courts and the sec later this week. a'll tell you what to expect. were live from times square in new york city. much more "fast money" right after this you.

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and reaches everywhere. this is beyond wifi, this is xfi. simple. easy. awesome. xfinity, the future of awesome. welcome back to "fast money. it is a big week with elon musk with the ceo going head to head with the sec he has his delivery numbers expected any time now. phil lebeau is live in chicago hi, phil. >> hi, melissa, while we're waiting for those delivery numbers what the market is focused on is model 3. will overall number i think people expect basically 20,000 deliveries combined between the model s and x, but what happens with model 3 deliveries and we are showing you here how it has grown quarter over quarter over the last five quarters nobody expects them to hit 63,000 again for the first quarter. the estimate is basically going to be closer to 55, 56,000 if it's in that area i think we

might see a bit of a relief rally for shares of tesla, which by the way, take a look at those shares they have come back from where they were just a few days ago when they were down in the 265 to 268 range and don't forget. as you mentioned at the top, this is a big week for tesla and for ceo elon musk. remember, his attorneys will be in court on thursday in new york battling it out with the attorneys for the sec. remember the sec once elon wants to be held in contempt of court for his use of social media, specifically what he has tweeted out since he signed that sec agreement that he would have all of his social media communications monitored and approved by somebody within the company. over the next three days will tell us a lot in terms of what happens for tesla. i'm not sure the judge will rule right away and we're in one of those critical periods where people want to get a better sense of what's happening in production activities and with

elon musk. >> and with the delivery numbers, technically the company does it three business days from the end of the quarter so basically it's going to happen between now and tomorrow. >> i wouldn't be surprised >> technically, could they wait until after the bell tomorrow? they could >> typically, we see it on the second day after the end of the previous quarter so that's why a lot of us have been expecting that it might be some time today. >> phil, thanks. >> phil lebeau in chicago. tesla puts up these numbers. say tesla hits 55 and 56 model 3s do we really care what the court says on friday >> is it about deliveries? it probably isn't about deliveries anymore >> it's a car company now? see? let's just play the game out and to your point. since december, when this was a $375 stock, it has made a series of lower lows and lower highs culminating with the low we recently saw which happens to be

the same low we saw in october i mentioned that because after making tremendous double tops there say good chance we just put in a double bottom and we'll race out and buy it now and there is a good chance the bottom was putin, i don't know if it matters, and the very defined trading range. >> you just had a very good chance if you look at that series of lower lows since 375, there say far better chance that it fails right here, guy, and retests the levels. >> it could, dan >> you were just saying a very good chance. listen, you know, at 260 it was a bad press because we know we had to wait for this news and we don't know what the story is with the musk thing. i think it's all about deliveries i think if they disappoint there they'll be on the way back to 260. is it a bad press there? i just don't know and it's not a great idea to buy it for a breakout there >> so reiterating my view.

i'm not sure the share price reflects the cash position of the company and i don't think it reflects the fundamentals of the company just to be clear and i do think that you could see a pop in the stock i think the next move could be a bit higher and if you want to be tactical on this, i don't know anything there could be news on the sec i think there could be general, positive stuff on deliveries and then i think there's nothing left frankly, i would be waiting for the q1 somewhere in the middle of may and that would tell you how bad the balance sheet looks in the quarter to me, this is the lack of demand story and i know we presume to be a ton of demand and we know free cash flow is a big issue in the free quarter. all kinds of things and what have they cut and put back in? there say company scrambling to make cash payments and that's undeniable >> that's the part i focus on, and scrambling to make cash payments and i was so amazed by the 10k where they talked about

the retail stores and how important that was ten days later not so important anymore and that was a very big change and a few days after that it's sort of important. so we'll have some i mean, that would make me uncomfortable as a long-term holder about, you know, just sort of their scrambling around and what is the long-term plan and there seem to be only to be able to focus on fires right now. >> for more on tesla and the autos you can head on over to cnbc.com i'm melissa lee. you're watch thing "fast money" on cnbc first in business worldwide. here's what's coming up on fast. >> someone help me, i have a flat tire! >> lyft shares have caught a flat and there's something happening in the stock that could point to more pain we'll break it down. plus -- ♪ >> one marijuana skeptic says there's a major canary in the cannabis space he'll tell us what that is, and why investors should just say no to the pot trade more "fast money" still ahead.

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>> welcome back to "fast money." facebook shares soaring as they predicted $10 billion in revenue. that's right $10 billion for the tech giant in 2021. instagram's new checkout feature allowing users to buy directly from apps. this is the online retail space booms and check out this chart for the first time ever online retailers made up a bigger share of sales in brick and mortar retailers in the month of february so what does this all mean for the retail space dan, what do you think >> it's fantastic focusing on facebook it's an outlet for people to display their wares and when you

think about facebook by 2021 they're expected to have a billion dollars in sales that is not immaterial if they were to do $10 billion it's probably very high margin and it opens up a whole host of other things and it is very interesting how the stock caught up big today i don't think it's something where you have to worry when amazon is opening stores it doesn't have that sort of adverse effect. >> karen >> think it's a positive thing for facebook facebook is now up, i don't know, 33% for the year so there was a big whoosh down from 210 to about here and now it's come back all the way and i still think it's not expensive here if you think there will be regulation that will impede their growth then i get the less optimistic story, but you can make an argument that regulation could help them and give them clarity and they won't be the bad guy anymore, rid >> and i think that's what they're trying to do

>> there are 50 different sets of regulations and if you throw $10 billion sets of revenue tied to e-commerce through the site that's diversifying revenue in terms away from the revenue dependent in advertising and into another field which i think would be good. >> they have different leverageable data that improves targeting at a time when you are worried about how sustainable the former platform is because of the other negative dynamics we've been talking about the impact of instagram or the potential of instagram for a long time. this is probably better than what people expected this is a real -- this is material >> one thing i would look at just to play -- since we've talked it to death and you look at the technicals and the stock made an all-time high and we traded down to 125 levels we're seeing now are effectively at 50% retracement of the entire move so maybe it's gotten a bit ahead of itself, valuation compelling and you know what? last quarter was outstanding and the stock has gone too far too

fast and seeing a pullback here. >> options traders are against the traditional retail space and head over to the plaza and break it down for us >> let's talk about the xrt, the etf that tracks the s&p retail sector here. put volume is three times that of calls today and there was one trade that caught my eye when the xrt was trading at 45 bucks and there was a buyer of june of the 44, 41 paying 70 cents and those break even at 43330 and down 7% and the max gain of $2.30 on the put spread down at 41 and it's down about 9% from the current levels you know, we talk about the sector rotations that we've seen in the market, a market that is the s&p 500 is up 14% year to date and the srt has lagged that off of the bottom and it's still about 12%, 13% from its 52-week highs. look at this really steady downtrend that the xrt has been in it's been in a series of higher

highs and it's consolidated a good bit over the last two months here and diverging from the s&p which is now 2% or 2.5% from the 52-week highs i want to make another point looking at the five-year chart and you see a lot of sideways action and you look at how steep the high is from the 2018 high and when you look at the 30-year low from christmas time. i see a big air pocket between now and then june expiration. why would someone buy the put spread they're getting a bit of the earnings in may and remember the retailers reported a little bit later cycle. >> thanks for that, dan. check out the action at 5:30 p.m. eastern time. coming up, the check engine light is on for lyft after its ipo and we'll tell you what could be driving the move as the crypto, soared more than 15% today as the long national nightmare over

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>> welcome back to "fast money."

lyft fails to impress wall street leslie is back with all of the details. >> i like that pun a lot of market participants may speculate, but today is closed and unchanged as a report of underwriter helping support that stock higher and i am told by a source that today's moves are a result of natural buying and selling and not the stabilization by the underwriter. in all deal the underwriters sell 115% of the share announced making them effectively short the stock, but not in a bearish sense and they then have the ability to close their short through the open market which could help support or stabilize the stock. it's harder to make an impact in stabilizing a stock when values are high and lyft's volume has been elevated every trading day since the ipo and once liquidity drives up a bit more they could have more fire power to stabilize the stock or exercise the overallotment if the stock gets back above the ipo price. another interesting aspect is the settlement date for the deal that means that the shares are finally distributed in the ipo and will actually be delivered

to the investors so they can officially lend them out to borrow and sell short. sources tell me that there's been high demand to short lyft which may be contributing to the bearishness we've seen in the last few days. seaport global putting out a note this morning indicating lyft coverage with a sell rating and a price target that implies 40% downside the firm saying that to justify lyft's current valuations, investor would need to believe that enough people would opt out of car ownership to solely rely on ride sharing, melissa >> leslie picker back at headquarters dan, what do you make of the action list? >> i see reasonably that this deal wasn't well allocated to the tune of two-thirds of this 32 million share deal on friday and -- in very good institutions >> so the fact of the matter is it's traded 130 million shares over the last three trading days when i look and see who has traded the most shares and i

think it's become a great trading vehicle and a very short period of time and it's a very unique offering and i would also make the point that leslie talked about sea port, and i don't know who these guys are and all of the underwriters come out with a detail and this deal also priced on the last day of q1 we will see this company report at some point, maybe late april or early may and you'll get more support there and i look at this and say if this company, and if they come out and analysts are supportive and we have a good q1 rate out of the gate and then you have the exercise and this will set up as an epic short squeeze and when you think about where that short borrow is right now and people are not going to be able to hang on to that for too long >> settlement data now and the shares are available to be lent out. so we're in this -- we've been in this period in the past couple of trading sessions where it's been a vacuum and it's been

an inefficient period for the stock where there are no options and thursday, they've expedited that. >> it's basically amateur hour for three days >> basically is this a true tell in terms of how this thing is going to trade if this is quote, unquote amateur hour however you want to put it and the most inefficient period of a stock in a stock's trading life >> maybe i don't know to me, it's interesting we've seen a bunch of negative analysts and not even one positive and now maybe this is everyone who wasn't in on the offer and they're, like, okay. forget it. it was terrible. i absolutely see the underwriters and of course, they want to support it remember how enthusiastic everyone was about blue apron when they could finally, and obviously it's a totally different scale, but are you implying that you think the first quarter is going to be good because it's super -- >> this company just went on the road just two weeks ago and talked to investors, you know what i mean, in giving some form of guidance about their business

so i would not expect when they report their first quarter out of the gate that there is a disappointment there. >> coming up, pharmacy stocks looking sick as walgreen's has its worst day in five years and we'll tell you how much worse it could get. >> also, just say no one pot critic says there is a caab scen the nnispa that could make the entire pot trade a no touch he'll be here when "fast money" returns. gement professionals, let's measure up. cfa institute. whai tell clients, etfs can follow an index, but which ones target your goals? it's not about quantity. it's about quality. no trendy stuff. i want etfs backed by research. is it built for the long-term? my reputation depends on it. flexshares etfs are designed and managed around investor objectives. so you can advise with confidence. before investing, consider the fund's investment objectives, risks, charges and expenses.

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welcome back to "fast money. walgreen's a major buzz kill seeing its major sessions since 2014 after disappointing earnings and that stock the worst performing in the dow by a lot. cvs and rite aid also getting crushed. karen, they had a lot of problems that took them a full-year guidance. >> oh, yeah. they took them don a lot and that is an enormous miss this is really bad on so many fronts and the front of the store is bad as amazon pressures. you don't want to have big exposure in england right now. they have a pretty meaningful overseas business and that was bad. youio are know, prescription pricing pressure it doesn't sound like they have clarity on when things will get better and i forgot the rite aid part of it here. a lot of things going wrong here

and it is cheap and i would let it shake out a little bit more it's really cheap, but it should be cheap a lot of things are going wrong. >> it's 180 basis points of margin pressure and it's not just those guys. look at kroger and look at walmart, and i think you'll have more margin pressure for companies that didn't need it, guys that i think are struggling in the consumables business and i'll read this across the guys playing in the space and i don't like this news at all. >> they mentioned generic deflation. pricing pressure on prescription drugs. so the flipside of lowering drug costs is hurt for some of these -- so where can it go down to where does it stop if you look where it topped out at, in early '06 and early '07 it's their 50 and that's where it found resistance and that's where it will find support and it feels like it's headed there and as much as you would like to think it's the flush down 13% and there's further room to the

downside >> coming up, bitcoin going wild soaring to its highest level since november and we'll tell you what's behind that move and plus marijuana madness and one cannabis skeptic says just say no and we'll tell him what has him so worried and mh reucmo "fast money" still ahead duncan just protected his family with a $500,000 life insurance policy. how much do you think it cost him? $100 a month? $75? $50? actually, duncan got his $500,000 for under $28 a month. less than a dollar a day. his secret? selectquote. in just minutes, a selectquote agent will comparison shop nearly a dozen highly-rated life insurance companies, and give you a choice of your five best rates.

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welcome back to "fast money," the crypto currency blooming overnight topping 5,000 for the first time since november the move was so exciting that we actually decided to bring back the -- >> oh, yeah! >> going down as we speak to 4800 now >> the question is is this rally for real is the long winter over for bitcoin? >> i've spoken to a couple of friends in the last couple of days and it will be a conduit and it will be bitcoin i don't know where we are in the pricing near-term to medium term and no question bitcoin is around to stay and even more impressive it's in the 2 hun-day for the first time since may 2018 this is a real move beyond where it's traded and i won't peck late on tomorrow, but this is substantial. >> we haven't talked about it in a while and our ticker went away

or the bug. >> the sentiment got really, really bad with this thing and i think about it from the first time we started focusing on it on this desk and it's 1600 and 1700 and it's traded pretty well this year. >> you're still a holder, huh? >> i'm still a hold are and a bunch of different currencies and it's a lack of sellers and it starts to get a little bit of momentum so it can move a lot. >> right >> without a lot of buying behind it. >> from crypt onto pot logical, right marijuana madness is taking the nation by storm, but our next guest isn't buying it, and he's cautioning cannabis retailer med men's financial troubles are a warning for the marijuana industry, author of "tell your children the truth about marijuana, mental illness and violence" and you can find this article on cnbc.com. alex, welcome to the show. >> melissa, thank you for having me >> medmen is small compared to

other publicly traded companies that we talk about here on cnbc. it's very high profile and it has storefronts on the swanking avenues here in new york city. et cetera. you say they're losing money at a super fast clip and isn't that the price of doing business in a fast-growing industry? >> this was a plant you could sell for $40, $50 or $100 an ounce and the plant product and the margins would be very important. >> medmen is important because it's the highest profile cannabis retailer in the u.s. and because it's had this aggressive and explicit strategy to market to new users and to people who haven't used. so, you know, i wrote a book about the problems with marijuana and the health problems which is separate from this obviously, i don't particularly believe in legalization, and i'm explicit about that and people should know that and the issues about whether or not companies will make money in the space is a very interesting and important one and obviously, one that your viewers will be interested in.

>> one point that you do make in the article and i know there are a lot of people when don't want to read what you have to say and they don't believe what you're saying because they think you have an axe to grind and there is one important point in the article and one of the biggest forces of competition is the black market just this morning acreage ceo on squawk box had said that he thinks the biggest competition is the black market. legal companies like a medmen or anybody else in this space, acreage, for instance, they're competing against a black market in which users don't pay taxes there is no cost to -- no licensing and all of the regulatory overhead that other companies have to pay for. >> yes when you legalize you have two choices. prices go down and it's easy to open dispensaries and medmen have avoided the markets and they want to be in higher regulatory and higher cost markets and the problem is the

black market remains unregulated and you have the perverse thing happening in california where the dispensaries and regulators say we need more law enforcement against the people who are selling this which, you know, against the people selling it in the black market which, by the way, will not endear medmen or other companies that are in the legal space to the heaviest users of this product. so there's just all kinds of very interesting dynamics that go on when you legalize a stub stance that's been illegal for so long and investors haven't paid attention to that and they haven't paid attention to the psychosis risk and that's the real legal issue and i've said this on cnbc before and there is a real potential for industry and i don't want to say industry-damaging lawsuits if people become psychotic and you can connect it to a specific store's product. >> even on the psychosis issue, and i think when we're talking

about this industry and the growth sector of any kind where capital is very much constrained. >> yes so the things that you're talking about are not big surprises to people and i think you're highlighting medmen and there are people that are critical of this company particularly, and not just the concept of people and i'll leave them alone are you concerned about demand overall? in other words, it sounds to me everything you're saying that is fundamental to companies that is constrained. they on and i don't think there is demand outside of that. >> if you look at the number of new users per year and there are federal surveys on this, it has aren't risen as much as you might expect demand has become more concentrated and just talking to people when use and obviously a lot of users have reached out to me since the book came out, there are a lot of people who used this drug once and a handful of times and don't like the experience they have there are some people who really love it and get really into it, but they're out there.

it's not like alcohol there are casual users in the last week or two. >> they've been counting on rec yagszal legalization to spread very quickly in pasht of what's happened in california where there is this issue with how much tax revenue has been raised which has been way low. >> it's been a third of the projection of last year. >> that's right. when you count cost of regulation you're talking about a relative small net benefit for the states for legalizing at least so far politicians in places like new jersey and new york for better or worse a lot of people view this as a cash grab, they're saying to themselves are we really going to raise that much money and in new york, we'll raise $250 million and does this actually help the budget at all? >> alex, thanks so much for coming by and sharing your point of view on this. we've got a lot of cannabis bulls on so it's important to get the other side of the story. of course, you can catch alex's

full article on medmen and it's a statement of the broader industry according to his analysis on cnbc.com we did reach out to med men for an official statement and here's what they told c next. med men will continue to unlock significant investment opportunities as legalization advances we have consistently executed our strategy of increasing market share in the most important cannabis markets within the u.s >> if you want to get a little technical on this section 280e of the irs code basically makes it impossible for these guys to make money you get a banking deal and the ability to actually not have punitive pricing because it's effectively what it is the illicit market is alive and well, and frankly, i would say the industry really wants regulation of course, the industry does the industry wants to put the illicit market out of business

i'll talk about cannabis as a crop i think it's irrelevant. medmen has built a brand i think they have an enormous cash burn and people look at corporate governance and look at how people are rung their companies and that's one of his key points and i couldn't agree more with that. >> the health effects and one of the things the medicinal aspect is important and the psychosis thing, who knows i haven't read the data and there are social things and you talk about the black market and the impact of incarceration, and there are so many other levels who want to fix societal problems and i think they can do that through legalization. the jeannie is out of the bottle and it's happening, and i don't want need to convince you of that and not just tax revenues to come out of this. >> up next, final trades

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time for the final trade tim. >> a lot of talk i am long fedex and it's a company to own for now and the future. >> chairwoman? >> i can do the exact same thing. i have ups and i'm long ups, as well i like them both it's more expensive, but cleaner right here. >> dan >> lyft. don't forget the top end of the range with 68 bucks and it could

be setting up for a short squeeze. >> guy >> nobody likes to take their medicine, mel, but sometimes it makes you feel better. twitter took their medicine a month or so ago and look where the stock is >> sfoon full of sugar. >> see the meantime, "mad money" with jim cramer starts right now. my mission is simple -- to make you money i'm here to level the playing field for all investors. there's always a bull market somewhere. and i promise to help you find it "mad money" starts now hey, i'm cramer. welcome to "mad money. welcome to cramerica other people want to make friends. i'm just trying to make you some money. my job isn't just to entertain but to educate and put it in context. >> call me at 1-800-743-cnbc. or tweet me @jimcramer let's talk about euphoria. and by that mean the fabulous lack of euphoria, yes, the lack of euphoria in this bull market.