Do Tobacco companies produce GOOD profits? — Transcript

Full transcript

1. 0:00On April 14th, 1994, seven of the most
2. 0:04powerful men in America sat at a table
3. 0:07before the United States Congress. They
4. 0:09were the CEOs of every major tobacco
5. 0:12company in the country. They were placed
6. 0:14under oath
7. 0:16and they were asked a single, simple
8. 0:18question.
9. 0:19>> Let me uh begin my questioning on the
10. 0:21matter of whether or not nicotine is
11. 0:23addictive. Let me ask you first, I'd
12. 0:25like to just go down the row uh whether
13. 0:28each of you believes that nicotine is
14. 0:30not addictive. I heard virtually all of
15. 0:34you touch on it and just yes or no, do
16. 0:35you believe nicotine is not addictive?
17. 0:38I believe nicotine is not addictive,
18. 0:39yes.
19. 0:40>> Mr. Johnston.
20. 0:41Uh Congressman,
21. 0:43cigarettes and nicotine clearly do not
22. 0:46meet the classic definitions of
23. 0:48addiction. There is no intoxications.
24. 0:50>> that as a no and again, time is short.
25. 0:53If you could just I think each of you
26. 0:54believes nicotine is not addictive, we
27. 0:56just would like to have this for the
28. 0:58record.
29. 0:59I don't believe that nicotine or our
30. 1:01products are addictive.
31. 1:03I believe nicotine is not addictive.
32. 1:07I believe that nicotine is not
33. 1:08addictive.
34. 1:10I believe that nicotine is not
35. 1:12addictive.
36. 1:14And I too believe that nicotine is not
37. 1:16addictive.
38. 1:17You just saw that every one of them said
39. 1:20no. Under oath, on camera, and they were
40. 1:24lying. And today, I'm going to present
41. 1:27the evidence to prove it with their own
42. 1:29internal documents and with data from
43. 1:32the United States Surgeon General.
44. 1:35Welcome back to the series. Today, we're
45. 1:36covering two industries that belong in
46. 1:39the same conversation, tobacco and
47. 1:41cannabis. And I promise you, by the end
48. 1:44of this video, you're going to see at
49. 1:46least one company on this list that you
50. 1:48did not expect. But before we get to the
51. 1:51tickers,
52. 1:52we have to deal with the clip you just
53. 1:54watched from 1994
54. 1:56because it tells you everything you need
55. 1:58to know about how this industry
56. 2:00operates.
57. 2:02The reason those seven executives were
58. 2:04willing to commit perjury in front of
59. 2:06Congress is that the entire tobacco
60. 2:09business model depends on one fact being
61. 2:13hidden from the public. Nicotine is
62. 2:16addictive. The company in the the
63. 2:18tobacco industry knew this long before
64. 2:211994.
65. 2:23Their own internal documents later
66. 2:25released as part of the master
67. 2:26settlement agreement show they knew it
68. 2:29for decades. A 1963
69. 2:32memo from the general counsel of Brown
70. 2:35and Williamson described the company as
71. 2:37selling nicotine, an addictive drug.
72. 2:41Philip Morris researcher named William
73. 2:44Dunn wrote, "Without nicotine, there
74. 2:47would be no smoking."
75. 2:49A science advisor from British American
76. 2:51Tobacco stated plainly in 1962,
77. 2:55"Smoking is a habit of addiction."
78. 2:58So, when those executives raised their
79. 3:01hands in a 1994
80. 3:03uh congressional hearing and they told
81. 3:05Congress nicotine wasn't addictive, it
82. 3:09was as if they were confused or
83. 3:11uninformed. No,
84. 3:14they knew exactly what they were saying.
85. 3:15They were protecting a business model.
86. 3:18Six years before that hearing in 1988,
87. 3:22the United States Surgeon General had
88. 3:24already issued a 647-page
89. 3:28report titled "Nicotine Nicotine
90. 3:31Addiction." It reached three
91. 3:33conclusions. Number one, "Cigarettes and
92. 3:36other forms of tobacco are addicting."
93. 3:39Number two, "Nicotine is the drug in
94. 3:42tobacco that causes addiction." And
95. 3:44number three, "The pharmacologic and
96. 3:47behavioral process that determine
97. 3:49tobacco addiction are similar to those
98. 3:52that determine addiction to drugs such
99. 3:55as heroin and cocaine.
100. 3:57That was 6 years before those executives
101. 3:59sat in front of Congress. This wasn't a
102. 4:02difference of scientific opinion. It was
103. 4:04a public health consensus
104. 4:07that the industry was actively,
105. 4:09knowingly denying under oath. Now, let's
106. 4:13talk about what this product actually
107. 4:15does to people, how it harms them.
108. 4:17According to the Centers for Disease
109. 4:19Control and Prevention, cigarette
110. 4:22smoking and secondhand smoke exposure
111. 4:25cause more than 480,000
112. 4:28deaths each year in the United States
113. 4:30alone.
114. 4:31That's nearly one in five deaths. Let
115. 4:34that sink in. One in every five deaths
116. 4:37in America.
117. 4:38That's about 1,300 deaths every single
118. 4:41day.
119. 4:42According to the CDC, on average,
120. 4:44smokers die 10 years earlier than
121. 4:47non-smokers.
122. 4:49Globally, the numbers are staggering.
123. 4:51It's even worse. Tobacco kills more than
124. 4:547 million people each year, including an
125. 4:57estimated 1.6 million non-smokers
126. 5:01who are exposed to secondhand smoke.
127. 5:05Tobacco kills more people annually than
128. 5:08AIDS, alcohol, car accidents, illegal
129. 5:11drugs, murders, and suicides combined.
130. 5:16This is not a product with side effects.
131. 5:18This is a product that used exactly as
132. 5:21intended by the manufacturer kills half
133. 5:24the people who use it long-term.
134. 5:27This is why for faith-based investors,
135. 5:29tobacco has been the most commonly
136. 5:32screened category for decades.
137. 5:34The Bible doesn't mention cigarettes
138. 5:36specifically,
139. 5:37but it does speak directly to what we do
140. 5:40with our bodies
141. 5:41and what we do to other people's bodies.
142. 5:44In
143. 5:456:19-20,
144. 5:48Paul says, "Do you not know that your
145. 5:51body is a temple of the Holy Spirit
146. 5:53within you,
147. 5:55whom you have from God?
148. 5:57You are not your own, for you were
149. 5:59bought with a price. So, glorify God in
150. 6:03your body."
151. 6:05And in Romans 12:1, Paul tells us we are
152. 6:08to offer our bodies a living sacrifice,
153. 6:11holy and pleasing to God.
154. 6:14And this matters beyond personal use. As
155. 6:17investors, when we own shares of a
156. 6:19tobacco company, we are, in a real and
157. 6:22legal sense, a part owner of that
158. 6:24business. The profits flow to us because
159. 6:28the product is sold, and the product
160. 6:31cannot be sold at scale unless the user
161. 6:34cannot stop smoking because of their
162. 6:36addiction.
163. 6:38That's not a product with an addiction
164. 6:40problem, that's a business model of
165. 6:42addiction.
166. 6:43So, let's name some names.
167. 6:46There's three publicly traded companies
168. 6:48that dominate the space globally.
169. 6:51Number one, Altria Group. The ticker MO,
170. 6:55Mo. New York Stock Exchange. Their US
171. 6:58brands include Marlboro, Copenhagen, and
172. 7:02Skoal. They also hold a 35% stake in
173. 7:05Juul.
174. 7:07Number two, Philip Morris International,
175. 7:09ticker PM, New York Stock Exchange. They
176. 7:13sell Marlboro internationally.
177. 7:16In 2022, they acquired Swedish Match,
178. 7:20which is the name of the of the maker of
179. 7:23Zyn nicotine pouches. These are super
180. 7:26popular now.
181. 7:28And three, British American Tobacco,
182. 7:30ticker BTI, traded on the New York Stock
183. 7:33Exchange ADR.
184. 7:35Their brands include Newport, Camel,
185. 7:38Lucky Strike, and Fuse Vaping.
186. 7:42Altria and Philip Morris International
187. 7:43were actually the same company until
188. 7:452008 when they split. Altria got the US
189. 7:48market and Philip Morris International
190. 7:51got the international markets.
191. 7:53And don't let the smokeless vape and
192. 7:55vaping rebranding tools fool you. Zyn
193. 7:59pouches, Jewel, IQOS heated tobacco,
194. 8:03these are the same companies with the
195. 8:05same dependency-based business model.
196. 8:08Just with newer delivery mechanisms. The
197. 8:11nicotine is still the point because
198. 8:13without nicotine, as Philip Morris
199. 8:15researcher wrote 1972,
200. 8:17there would be no smoking.
201. 8:20So, why are we still talking about this
202. 8:221994 hearing some 30 years later? Well,
203. 8:27because cigarettes are still with us and
204. 8:29the advent of these new delivery
205. 8:31mechanisms with what they call
206. 8:33e-cigarettes for vaping are extremely
207. 8:36popular and the playbook is the same. An
208. 8:40addictive chemical that causes bodily
209. 8:42harm.
210. 8:44And as someone who was a so-called
211. 8:46social smoker, I experienced this
212. 8:49industry's transformation firsthand.
213. 8:52I remember being in college and going
214. 8:55out to the bars
215. 8:56where we social smoked and we would come
216. 8:59across cigarette girls. Young, beautiful
217. 9:02girls carrying trays selling cigarettes
218. 9:05and sometimes even giving them away for
219. 9:07free.
220. 9:09There were even vending machines at
221. 9:11restaurants where you could buy a pack
222. 9:13of cigarettes.
223. 9:14Most of this doesn't exist anymore.
224. 9:17But this industry hasn't gone away. They
225. 9:20still want our capital to expand their
226. 9:22business into new products.
227. 9:25As Christians, we don't want to profit
228. 9:27from harmful products. Ask yourself the
229. 9:29question, is this business of addiction
230. 9:32that causes harm to so many people
231. 9:35aligned with my faith?
232. 9:37Is this how we want to invest the money
233. 9:40God has entrusted us to steward over?
234. 9:43Does tobacco serve anyone's needs or
235. 9:46make the world better in any way?
236. 9:49Absolutely not. Just the opposite. So
237. 9:52now let's transition to cannabis. This
238. 9:55is a more recent category in the
239. 9:57biblically responsible investing
240. 9:58conversation.
241. 10:00Cannabis remains federally illegal in
242. 10:03the United States.
243. 10:06In 1 Peter 5:8, we're told to be
244. 10:08sober-minded
245. 10:10and watchful.
246. 10:12And the obvious question that follows
247. 10:14is, do we want to be in the business of
248. 10:16getting high?
249. 10:19There actually is a medical use of
250. 10:21marijuana, but unfortunately, there
251. 10:23isn't a way currently to invest in just
252. 10:26the medical aspect.
253. 10:28Because cannabis is still illegal at the
254. 10:31federal level,
255. 10:32US cannabis operators cannot list on the
256. 10:35New York Stock Exchange or on the
257. 10:36NASDAQ.
258. 10:38They trade what's called
259. 10:39over-the-counter, OTC. And the key
260. 10:42players in this industry are
261. 10:45first, Curaleaf Holdings,
262. 10:48trading under the symbol CURLF,
263. 10:52over-the-counter.
264. 10:54They are the largest US multi-state
265. 10:57operator by revenue.
266. 10:59Number two, Green Thumb Industries,
267. 11:02which trades under the symbol GTBIF,
268. 11:05also trades over-the-counter.
269. 11:08They operate Rise dispensaries, and
270. 11:11they're mostly in the Midwest and the
271. 11:12East.
272. 11:14Number three,
273. 11:16Trulieve Cannabis Corporation, trades
274. 11:19under the symbol TCNNF.
275. 11:22They're very dominant in Florida.
276. 11:25Canadian companies, where cannabis is
277. 11:27federally legal, can list on major US
278. 11:30exchanges like the NYSE or the NASDAQ.
279. 11:35And a few of those companies
280. 11:37are Tilray Brands, trading under the
281. 11:40symbol TLRY
282. 11:42on the NASDAQ. They're the largest
283. 11:45global cannabis company by revenue. And
284. 11:48they own craft beer brands.
285. 11:51Two screen categories in one ticker
286. 11:53here.
287. 11:55Number two, Canopy Growth, trading under
288. 11:57the symbol CGC
289. 11:59on the NASDAQ.
290. 12:01Number three, Aurora Cannabis, ACB on
291. 12:05the NASDAQ.
292. 12:07Cronos Group, trading under the symbol
293. 12:10CRON on the NASDAQ.
294. 12:13They're backed by Altria with a 45%
295. 12:15stake.
296. 12:17Tobacco feeding cannabis. I'm sure
297. 12:19they're going to
298. 12:20do a wonderful marriage of the two
299. 12:21products soon. I promised you a company
300. 12:24you wouldn't expect as well.
301. 12:27This is Innovative Industrial
302. 12:29Properties.
303. 12:31Symbol IIPR, traded on the New York
304. 12:34Stock Exchange.
305. 12:36They're what we call a REIT, a real
306. 12:38estate investment trust, that does
307. 12:40sale-leaseback transactions with US
308. 12:43cannabis operators.
309. 12:45Looks like real estate, but depends
310. 12:47entirely on cannabis. As a matter of
311. 12:50fact, when I came across this company, I
312. 12:52got really excited cuz they have a
313. 12:53really high dividend yield, almost 14%.
314. 12:57And then when I went in to their 10K and
315. 12:59I saw who they do business with,
316. 13:01it's a bunch of cannabis retailers.
317. 13:04The pattern you're going to keep seeing
318. 13:07is these series in this series is that
319. 13:09these industries, they don't stay in
320. 13:12their lanes. Tobacco bleeds into
321. 13:14cannabis. Cannabis bleeds into real
322. 13:17estate. The tentacles, they extend
323. 13:19further than most investors even
324. 13:21realize.
325. 13:22In the next video, we're going to talk
326. 13:24about something that will hit closer to
327. 13:26home for most of you. An industry that
328. 13:29many Christians participate in every
329. 13:31single day, including me. Often without
330. 13:35a second thought.
331. 13:36We're talking about predatory lending,
332. 13:39credit cards, and the modern usury
333. 13:42economic system that we have in our
334. 13:43country. I'm Brian with Palo Seco Wealth
335. 13:46Management, and I'll see you on the next
336. 13:48video.