WSJ : How EVs Could Transform the Streets of Africa

How EVs Could Transform the Streets of Africa
Proponents see electric cars and motorcycles as a fast way to promote inexpensive and clean transportation

The electric-car revolution is reaching the streets of Africa.

A handful of startups in several countries are building small electric-vehicle fleets of light carriers and motorcycles—vehicles well suited for the continent’s challenging roads—for taxi and delivery services.

In February, Kenya-based ARC Ride launched electric two- and three-wheelers for Uber Eats deliveries in Nairobi, a city of 4.4 million. While the company currently has 35 vehicles operating, Chief Executive Joseph Hurst-Croft, a former environmental activist in Nigeria, says he expects the fleet to grow to 300 by August. ARC also is building its own charging network across the city fed by thermal energy generated from volcanic heat along East Africa’s tectonic rift.

Proponents of electric vehicles and renewable energy see motorcycles as the fastest way to promote inexpensive, clean-energy transportation in Africa, where roads are often traffic-clogged and potholed. The executives at ARC hope that their efforts in Nairobi will be a launchpad for a broader expansion throughout Africa—akin to the way the cellular telecommunications revolution bypassed wired lines in many areas. ARC’s chairman is Johannesburg-based retired investment banker Richard Douma.

Rob de Jong, head of sustainability for the United Nations Environment Program, or UNEP, says that “two- and three-wheelers are the low-hanging fruit” of EV mobility in Africa. UNEP is funding EV projects in seven African countries. “The potential leapfrog is massive,” says Mr. de Jong, who is based in Nairobi.

From Nairobi to Cape Town to Lagos, most people rely on motorcycles, minibuses and vans to get around. In Kigali, Rwanda, a city of roughly 1.2 million, there are more motorcycles than there are yellow cabs in New York City. Motorcycles make up more than half of all vehicles on the road in Kigali.

Motorcycles and utility vehicles of all types represent the fastest-growing segment of the African automotive market. Sales of both electric and traditional two- and three-wheelers in Africa will jump 50% by 2050, according to UNEP. In Kenya, the agency says, motorcycles are set to more than triple to five million this decade compared with 2018. The purchases will be driven in large part by businesses, including EV startups like ARC, that buy the vehicles and then lease or rent them to drivers. Purchases by individuals, especially of e-motorcycles, which tend to be more expensive than nonelectric models, are more rare in Africa because of low incomes and scarce credit mechanisms.

Most motorcycles currently on the road tend to run on fossil fuel, which is more expensive, and more polluting, than electricity. Fuel and maintenance costs for electric vehicles are as much as 40% less expensive on a per-mile basis than the fossil-fuel equivalent.

ARC, in partnership with ride-hailing platforms Nairobi-based Sendy Ltd. and Uber Technologies Inc., UBER 6.61% is delivering food, parcels and people.

In Kigali, meanwhile, e-motorcycle service Ampersand, which launched two years ago, currently has 200 vehicles doing taxi and delivery work. The company’s founder, Josh Whale, a New Zealander and former intellectual-property lawyer, says the startup has a waiting list of more than 7,000 requests for additional bikes. Ampersand has received funding from a variety of international sources, including $1 million from the nonprofit foundation of oil giant Royal Dutch Shell. U.S., British and New Zealand government agencies have provided funds as well. And in March, San Francisco-based clean-tech venture-capital firm Ecosystem Integrity Fund invested $3.5 million.

Multinationals in transportation also have taken notice of Africa’s EV potential. A company called Mellowcabs, based in Stellenbosch, South Africa, and whose customers include Germany’s Deutsche Post DHL Group, operates some 60 EV light-duty delivery vehicles in South Africa, Botswana and Namibia. And in Nigeria, Japan’s Yamaha Corp. 7951 1.99% took part in a $7 million funding round for electric motorcycle taxi and delivery company MAX.NG. The startup, whose investors also include Nairobi-based venture capitalist Novastar Ventures Ltd., says it is on track to launch 1,000 such vehicles in Nigeria, Africa’s most populous nation, by the end of 2021. A MAX spokesman says it costs 50% less to recharge its vehicles in Nigeria than it would to fuel gasoline engines.

Electric vehicles offer poor communities in Africa not only a shot at cleaner air but economic opportunity as well. In Kigali, Ampersand driver Remy Namahro, 30, says his monthly income has jumped 42%, to around $300, since he switched from the fossil-fuel motorcycle he used as a professional driver last year to the electric model he now leases. Most of the savings are due to lower energy costs but also lower maintenance expenses for e-motorcycles.

“I can regularly put meat on the table,” he says. “For the first time, I can save for my children’s education and healthcare.” he says.

While jobs like those offered by ARC, MAX and Ampersand can roughly double a delivery driver’s income, there are also potential gains for the environment, because the recharging infrastructure for EVs in Africa relies mostly on renewable power such as geothermal, solar and hydro. In India and China, by contrast, the energy-production supply chain that sustains electric cars still relies on carbon-heavy coal. Ampersand says its vehicles represent an overall reduction of as much as 95% in the carbon footprint of delivery vehicles compared with those that use fossil fuel.

Most of the platforms in Africa use socket-based chargers for their vehicles. But amid frequent power outages, they have to find creative ways to guarantee steady supply. In Nairobi, where ARC says electricity costs for its drivers are 30% lower than for fuel on a per-mile basis, the company has worked with logistical partner Sendy to set up chargers in the warehouses of its main delivery customers—so drivers can pick up electricity as well as goods. ARC is in the process of setting up solar panels to ensure the charging network operates independently from the grid, Mr. Hurst-Croft says.

MAX and Ampersand offer their drivers pre-charged, swappable batteries. The latter is in talks with major oil companies to start placing depots for these batteries at fuel stations in East Africa, according to Mr. Whale, the founder.

Mr. Namahro, the Ampersand driver, says riding an electric motorcycle came with issues when it came with access to electricity. At first the motorcycle batteries would run out quickly, he says. But current models, he adds, now enable about 50 miles—enough to cover a day.

Mr. Namahro says his reasons for using an e-motorcycle include the environmental benefits for the next generation.

“We will create a better world for them,” he says.

FT : The property developers still betting on London offices

The property developers still betting on London offices
The market is splitting in two, between modern, flexible spaces and older buildings whose value is likely to decline

Just beyond the northern frontier of the City of London, a nondescript plot of development land is the subject of a fierce bidding war.

The site’s price has soared in recent weeks on the back of offers from some of the world’s biggest developers and investors. Each of them is confident they can turn a profit by making a bet on the future of London offices.

The one-acre plot in the Shoreditch district, owned by the London Stock Exchange, has attracted interest from the Canary Wharf Group, US investor Tishman Speyer and developer Helical; bids have spiralled from around £120m to more than £150m, according to people with knowledge of the sale.

To anyone who has recently visited the centre of London, this bullishness may seem inexplicable.


Many office buildings are empty at the moment and the consensus, even among those who make a living building or selling workplaces, is that they will be much less busy once the pandemic is over than they were before. Within the industry, there is a common estimate that London offices will have around 10 per cent fewer people in them on a daily basis.

A number of major employers, ranging from banks to technology firms, have rolled out flexible working arrangements and signalled their intention to ditch space.

Simultaneously, the growing importance of reducing carbon emissions looks likely to make a vast chunk of London offices obsolete in short order, triggering huge value destruction in pockets of the market.

And yet investors stand ready to pour as much as £45bn into the London office market once pandemic restrictions fall away, according to property agency CBRE. The few office sales which have gone through have done so at or close to pre-pandemic prices, yields have held firm and London’s leading developers say sellers of distressed properties are hard to find.

What exactly is going on? In dozens of interviews with property executives, investors and analysts, one explanation comes up repeatedly: coronavirus will cleave the office market in two.

“There will be a clear bifurcation: anything that is flexible, modern and has access to open air will be high in demand and rents will be resilient there, but in the secondary market there will be accelerated obsolescence,” says Mark Allan, chief executive of Landsec, a FTSE 100 developer with 60 buildings in London.

The former, they say, will command high rents from large corporations competing for talent — law firms and tech companies chief among them. The latter will empty out and have to be refitted or repurposed.

It is a line of argument which allows office developers to tout their own chances of success while acknowledging the broader malaise in the market.


So far, high-end finishes and cavernous atriums have not inoculated offices against the collapse in demand for space. Expected sales values for central offices have fallen steadily since the start of the pandemic, slipping every quarter from the start of 2020 to the end of March this year, according to CBRE.

Investment in London offices remains way down on normal levels. In the first four months of the year, it was down by 53 per cent compared with the same period in 2020, according to Savills.

But there are signs of recovery as social distancing restrictions ease in the capital and, with them, evidence to support the theory that there will be winners as well as losers after coronavirus.

In the first three months of the year, the average rent agreed on new leases for high-quality offices in the City was £82.50 per square foot, up from £75 in the fourth quarter of 2020. The shift is down to a “heavy bias towards ‘grade A’ [offices] in the market,” says Mat Oakley, head of European commercial property research at Savills.

In recent weeks, property firm JLL has signed up to a 15-year lease on 134,000 sq ft at British Land’s 1 Broadgate development and viral video app maker TikTok has agreed to lease the entirety of Helical’s Kaleidoscope building in Farringdon, also for 15 years. After a rent-free period, TikTok will pay £86 per sq ft, according to people with knowledge of the deal.

“The big tenants have got to move,” says David Camp, chief executive of Stanhope, a London developer whose projects include Bloomberg’s London headquarters and the redevelopment of Paternoster Square by St Paul’s Cathedral. Companies view new offices as a weapon in the war for talent, he says.

In a recent Knight Frank survey of almost 400 large employers who collectively employ around 10m people, 37 per cent of respondents said that property formed part of their strategy to attract staff. Half said that offices supported their corporate brand and image.

Sony Music, relocating from Kensington to King’s Cross, told architectural practice MoreySmith that its new headquarters should be designed to attract and retain talent, according to Linda Morey-Burrows, principal director at the firm.

“People commute for more than an hour, they need a reason to come in. I know for sure that people don’t want to come back to big Plexiglas and signs saying, ‘Put your mask on’. They want to feel comfortable and to feel they’re in an environment where they’re getting more than they get at home,” she says.

Capital revival
Partly on that basis, developers and investors are betting that demand for new space will be sustained.

According to CBRE, global investors have earmarked between £40bn-45bn to invest directly into London offices, more than any other European city and the highest volume of cash since the agency started tracking investor intentions in 2012.

Investors are targeting “best-in-class” assets deemed to be most resilient, a typical practice in the aftermath of financial shocks, says Stephen Down, head of central London investment at Savills. “At this phase in the cycle, when you come out from under the rock, you have got to go where the banks are willing to lend. That’s on the very best [properties],” he says. That means new, spacious, well-equipped and green.

“Investors are active once again [after] a prolonged period of muted activity,” says James Beckham, head of central London investment at CBRE. A growing number of deals are taking place behind closed doors, without the properties being advertised, he adds.

In December last year, Singaporean investor Sun Venture agreed to buy Landsec’s office development at 1 & 2 New Ludgate in the City of London for £552m — more than the £546m it was valued at in March 2020. According to a person with knowledge of the sale, the buyers did not visit the site before agreeing to the purchase.

Ronald Dickerman, president of Madison International Realty, a private equity firm with holdings in West End landlord Capco and a stake in Paternoster Square, is likely to join the scrum for London offices. He says the UK capital is emerging from the “double cloud” of Brexit and coronavirus under which it has now toiled for five years.

As London grappled with Brexit, investors turned to other European cities. The result has been a divergence in yields — an indicator of expected annual returns on investment which drives commercial property strategies — between London and other western European cities.

The average yield on the best stock in central London is 4.2 per cent, compared with less than 3.5 per cent in European cities monitored by CBRE. In Paris, average yields are at 2.75 per cent and trending down, according to the agent.

London, which entered the pandemic with office vacancy rates near record lows, now looks better value than its rivals, says Dickerman.

“With the onset of summer, warmer weather and people outdoors, there’s a reawakening. There’s pent-up demand for inward investment flows, [and] for office take-up in London. Five years ago people were thinking about Frankfurt and Dublin and were skittish about London. I see a recovery and a recovery trade that should be made now,” he says.

The speed of the UK’s vaccine rollout is another crucial draw for investors in London, the vast majority of which are from overseas. “It’s pretty much the only factor driving investors at the moment,” says Savills’ Oakley. “If every adult will be vaccinated by June, the prospect for a strong recovery is high.”

Concern for older stock
But elsewhere in the market, signs of life are harder to find. More than 3m sq ft of office space, much of it small lots in older buildings, has flooded on to the sublet market during the course of the pandemic, according to Savills. This so-called “grey space” shows no sign of being hoovered up by new tenants despite the prospect of discount rents.

Vacancy rates in the City of London edged up to 8.9 per cent at the end of March from 5.3 per cent a year earlier, according to Savills. “We will get very close to 10 per cent [vacancy] in the City market this year,” says Oakley.

But he expects it to be overwhelmingly older offices which empty out, leaving the largest developers such as Landsec and British Land relatively unscathed.

“Institutional landlords will have the breadth of portfolios and access to liquidity needed to ride out the storm. Smaller independent landlords will not have that kind of firepower to cope with the loss of income or value in the same way,” says Alastair Carmichael, investment director at property investor HB Titan.

Carmichael cautions that a slew of non-performing loans tied to offices might emerge as a result.


Sustainability push
That trend could accelerate as owners of older offices, already buckling in the face of the pandemic, see their problems compounded by the growing urgency of the climate crisis.

The financial crisis left property developers and investors in a scramble for survival and diverted them from climate commitments. So far, coronavirus has not had the same effect, in part because debt levels across the sector are far lower than in 2008 and speculative development has been more contained.

Many of the world’s largest property owners, investors and tenants have rolled out or beefed up environmental commitments during the pandemic. British Land has set a target of achieving “net zero” carbon emissions by 2030. Sustainability has risen to the top of the list of tenant demands, slicing the market in two “like a knife”, says Simon Carter, the company’s chief executive.

“Eighteen months ago, one or two [tenants] might have had sustainability somewhere in their list of requirements. Now it’s everyone, right at the top: ‘We would like a net zero building’,” he says. With the built environment responsible for roughly 40 per cent of the UK’s carbon footprint, the potential prize — and cost — is huge.

Those commitments will see financing flow to new net zero projects which aim to reduce the energy associated with building and running an office, for instance by generating the energy used on site from renewable sources, using sustainable materials and shortening supply chains. For now, though, many developers also rely on carbon offsetting to push down the net emissions associated with construction, a practice which has been criticised by activists as a get-out-of-jail-free card.

Yet the push to net zero will narrow the set of offices which can be built, bought or occupied, leaving a long tail of stock which does not meet new standards and risk falling into obsolescence.

“Is there potential for value destruction? Definitely,” says Stanhope’s Camp.

He predicts that a rent gap will rapidly open up between offices with low emissions and those without.

London is the world leader when it comes to low carbon office development, with close to 3,000 green-certified buildings, according to Knight Frank. But that is nowhere near enough to meet emerging demand for net zero space. The agency estimates that 40 per cent of all the capital targeting the London office market this year is focused on green-certified offices.

More than a means to command higher rents, strong sustainability credentials may ultimately be the key to survival. The phrase “stranded assets” — commonly used to describe fossil fuels which have to stay in the ground if carbon targets are to be met and therefore risk becoming worthless — is now cropping up in property circles.

Nathalie Palladitcheff, chief executive of Canadian property investor Ivanhoé Cambridge, owner of around 1,000 properties including multiple offices in London, says the shift could be as dramatic as the electrification of workplaces.

“It used to be a plus. Now, can you imagine working in a building without electricity? Without all these new [sustainability] criteria your building is nothing,” she says. Ivanhoé Cambridge has committed to make all new developments net zero by 2025.

Bringing buildings up to carbon neutral standards will not be cheap, however.

“The serious cost will be where you’re looking to get to net zero on an existing estate, not on new development. The investment across the sector runs to many, many billions. That isn’t really being talked about,” says Allan at Landsec, which is now tying its incentive plans to net zero targets.

Ultimately, if offices can’t be retrofitted to lower emissions, rents could fall to a point at which they become redundant. Any property more than 20 years old, with low floor to ceiling heights and small windows, will be hard to repurpose into alternative uses such as homes and will be most at-risk, says Camp. That raises the prospect of moribund properties littering high streets, local authorities losing out on tax revenue and pension fund investors taking a hit.

Perversely, the obsolescence of offices with poor environmental credentials could also mean more carbon is emitted in places like the City of London. Companies with net zero targets demand offices which emit little, and the cheapest way to create those is through new development. But that means gutting or tearing down existing buildings, an enormously wasteful process given the total carbon outlay involved in developing the original property.

The environmental agenda is “still full of contradictions which need to be worked through”, says Allan, who compares the decisions consumers make about whether to trade in their petrol powered cars to those of businesses scouting for new offices.

“Using a car to the end of its life is better than buying an electric vehicle to make yourself feel better,” he says.

These risks have not killed activity. But the prospect of value destruction in parts of the market, low occupancy in others and uncertainty over how we will use office space in future will all weigh heavily on the minds of investors preparing fresh outlays in London.

>>> Barron’s Weekend Summary

Barron’s Weekend Summary: Inflation may be hotter than it looks, based on the gap between reported price inflation and the experiences of businesses and consumers

* Cover story: Despite rising costs for businesses of all kinds, monetary and fiscal policy remains on autopilot, geared to an economy stuck in recession, as the Federal Reserve’s favorite inflation gauge remains close to its longstanding two percent target; “Official inflation data and policy makers’ commentary are an alternate reality…The gap between reported price inflation and the experiences of businesses and consumers is a signal to investors that inflation is hotter than it looks,” a trend that could have vast implications.

* Tech Trader: Positive on CVNA, VRM, SFT: The companies stand to benefit from the ongoing shortage of semiconductor components, which have sparked a bull market in used cars as automakers curtail production just as the economy, and demand, heats up; Wholesale used-vehicle prices jumped 8.3 percent in April from March, bringing the 12-month increase to 54.3 percent, according to auto-auction company Manheim.

* Trader: Adam Parker of Trivariate Research says that after large growth selloffs, S&P 500 growth stocks with both free cash flow and expanding margins tend to outperform in the months ahead, a trend that favors stocks such as NOW, AMD, CHGG, TWTR; Positive on DD: “Chemical stocks have been soaring, but DuPont has been lagging behind its peers—its shares look like a smart play on the coming phase of the economic recovery as it begins to play catch-up”; After a three-month run of immense popularity to start 2021, special purpose acquisition companies have seen investor appetite dry up and new issuance has slowed to a trickle—but the trend presents an opportunity for investors willing to sift through the rubble to find quality plays.

* Profile: Hua Cheng, Jens Peers, and Amber Fairbanks, co-managers of the Mirova Global Sustainable Equity fund, look for companies that fit into thematic buckets; meet fundamental investment criteria, including high barriers to entry and strong management and governance; and trade for at least a 20 percent discount to the managers’ estimates of intrinsic value (top 10 holdings: MSFT, MA, ECL, ETN, EBAY, Vestas Wind Systems, TMO, Orsted, DHR, Symrise).

* Interview: Candace Browning, head of global research at Bank of America Securities, talks about weathering the pandemic, and why Wall Street research is more important than ever before—“A vibrant, independent research function is a very important part of efficient capital markets,” she says, and “the ability to look for the next big trend is absolutely critical.”

* Features: 1) Cautious on FSLY, TDOC, ZM, DASH, PTON, CHWY, ETSY, DOCU, SHOP, NFLX, LOGI, HPQ: After a rally during the pandemic, so-called stay-at-home stocks have taken a backseat to an economic rebound, and while they all have growth potential, some are set to do better than others in the near future; 2) Positive on WHR: Robust demand and limited supply have allowed the global appliance leader to pass along price increases in steel and other raw materials to its customers; The company, whose brands include Maytag, Amana, and KitchenAid, is increasing prices by five to 12 percent across the board; 3) Investment professionals asked about inflation hedging—and profiting— strategies say to forget gold, but buy Treasury inflation-protected securities, along with stocks in sectors such as natural resources; land and real estate; luxury goods such as watches; and collectibles; 4) Positive on RLGY: The owner of familiar brands like Century 21, Coldwell Banker, and Corcoran has rebounded from pandemic lows but still trades at just a third of its all-time high, and the stock could be the one bargain left for investors in search of exposure to the housing boom; 5) Retirement story says thinking in terms of “saving for life” creates a new vision of financing the future that expands from saving for retirement to enhancing financial resilience, especially during traditional retirement years, building on four strong pillars: social security, pensions and savings, health insurance, and earnings from work.

* European Trader: Positive on DAI: The German auto giant has taken advantage of the pandemic to accelerate its restructuring plan, including spinning off its trucks and buses unit, renaming itself after its Mercedes-Benz luxury brand, and making a stronger push into electric vehicles.

* Emerging Markets: South African stocks have underperformed for a long time, but this year is different—the iShares MSCI South Africa exchange-traded fund has gained 14 percent, while global emerging markets are about flat, partly because of the country’s strength in platinum production amid growing global industrial demand.

* Commodities: “The commodities that help build an economy have rallied, with lumber, copper, and iron ore reaching record prices in recent weeks—and demand looks set to continue.”

* Streetwise: Tools that run on batteries are less noisy and noxious than those that use gasoline, and the shift to them is well under way, a trend that is good for SWK and TTI Group, which might be turning the battery-tool market into a two-horse race after five years of market-share gains.

>>> Coatue Management discloses latest quarterly holdings - 13 F-HR filing New s

Coatue Management discloses latest quarterly holdings - 13 F-HR filing
New stake: RLX OSCR FTCH VIAC MRNA EAF DDD CCIV AI LMND WKHS TWLO BNTX OPEN LSPD TAL LAZR
Liquidated: GPS DT JD UAA AYX CREE MU AEO LYV EXPE BBY BABA WYNN LYFT URBN TJX LRCX FWONK SRNE GDOT NVDA MSFT BEKE DECK ZI ROKU
Raised: LI NKLA XPEV SNOW GH DASH VLDR
Cut: UBER DIS PYPL PTON PLAN NUAN SQ CRWD GPN LB RUN DOCU PODD PINS TSLA API NFLX DDOG Z INO BA SNAP SHOP KODK

WSJ : Marijuana Medical Research Growers Receive U.S. Approval

Marijuana Medical Research Growers Receive U.S. Approval
DEA licenses companies to cultivate cannabis for study, ending effective freeze under Trump administration

WASHINGTON—The U.S. government has approved new growers of research marijuana for the first time in more than 50 years, people involved in the process said, widening the capacity to study the drug’s medical value.

The Drug Enforcement Administration’s action after years of delay means researchers will be able to study marijuana from more than one grower, a farm at the University of Mississippi, which the government approved in 1968 as the only legal source of pot for federal research. Researchers have long argued that they need to study a wider variety of the plant to know if it can be effective in alleviating pain, fighting seizures, combating depression and relieving post-traumatic stress.

“This is a monumental step,” said George Hodgin, a former Navy SEAL who has been waiting more than two years for his business, Biopharmaceutical Research Co. in Monterey, Calif., to receive permission to conduct studies. “This type of long-term thinking from the government will allow companies like ours to pioneer a federally legal cannabis market for products that are tested and approved to help the public.”

Steven Groff, a physician in York, Pa., said he intends to study whether cannabis can be used to kill bacteria and viruses such as drug-resistant staph infections. DEA officials contacted him Friday to let him know he had been selected.

“We will be growing research cannabis to sell to the whole world for the first time,” said Dr. Groff, who has an 80,000-square-foot growing facility. “I know the power of this plant, but we need to find some data to back it up. That’s what’s been missing.”

Both Dr. Groff and Mr. Hodgin said they planned to agree quickly to a list of regulations that would allow their licenses to be granted. The DEA confirmed the move in a post on its website Friday night, calling it “an important step to increase opportunities for medical and scientific research.” The agency didn’t say how many businesses had been selected but noted that officials expect to approve more applications.

The DEA under President Barack Obama began seeking applications for additional marijuana growers in August 2016. The agency at the time said it was complying with federal law in its push to expand the study of pot.

Marijuana for medical use is currently legal in 36 states, and 17 allow recreational use by adults. While the Food and Drug Administration has approved some prescription drugs derived from marijuana, the use and possession of cannabis remains federally prohibited.

The White House has said President Biden supports decriminalizing the drug but believes legalization should be left to the states. Attorney General Merrick Garland has told lawmakers that he doesn’t view federal marijuana prosecutions as the best use of the Justice Department’s limited resources.

Dozens of applicants, including Mr. Hodgin, other entrepreneurs and a university professor, submitted requests to cultivate marijuana for research after the DEA’s 2016 request. Their applications went unanswered under the Trump administration.

Justice Department officials including then-Attorney General Jeff Sessions, a longtime opponent of marijuana use, concluded that the DEA’s program violated a 1961 United Nations treaty that aimed to curb drug trafficking, prompting the agency to re-examine its rules.

Mr. Hodgin, who wants to study how marijuana might help veterans suffering from chronic pain and post-traumatic stress, said he hired a team, invested millions of dollars and created a production facility that has sat empty. The DEA issued new rules in December that it said were consistent with the treaty and began processing applications for new growers.

The licensees will be subject to regulations aimed at preventing their supply from entering the general marketplace.

“We’ve been at this so long I can’t believe we’re finally here,” said Sue Sisley of Scottsdale Research Institute in Arizona, which has been studying plants imported from Canada for recent FDA trials because the site couldn’t legally grow its own. The institute is studying the benefits of marijuana for cancer patients, among other uses.

DEA officials told her Friday—five years after she applied for a permit—that the business had been selected. “We’re excited about this because we actually care about quality studies,” she said.

FT : FTC chair says 7-Eleven owner’s $21bn Speedway deal may be illegal

FTC chair says 7-Eleven owner’s $21bn Speedway deal may be illegal
US antitrust regulator’s acting head ‘extremely troubled’ by decision to close petrol chain deal

The acting chair of the Federal Trade Commission said the $21bn purchase of Speedway petrol stations by the owner of the 7-Eleven convenience store chain may violate competition law.

Japanese retail giant Seven & i Holdings agreed to buy the business — which owns about 3,900 petrol stations and convenience stores — from Marathon Petroleum in an all-cash deal last August as it looked to solidify its position in the US market.

The tie-up would extend Seven & i’s push into the US after the $3.3bn purchase of parts of Sunoco’s convenience store and petrol station business in 2017. Adding Speedway would also expand its share of the US convenience store market from 5.9 per cent to 8.5 per cent, pushing it further ahead of its closest rival, Canada’s Alimentation Couche-Tard.

But in a broadside delivered on Friday, Rebecca Kelly Slaughter, acting FTC chair, and Rohit Chopra, a Democratic FTC commissioner, said they were “extremely troubled” by Seven & i’s announcement earlier that day that the deal had closed despite the regulator’s ongoing investigation and said they had “reason to believe that this transaction is illegal”.

“In many local markets, the transaction is either a merger-to-monopoly or reduces the number of competitors from three to two,” they said in a statement.

While the antitrust regulator had already spent “significant resources” investigating the transaction, it had not yet come to an agreement with the companies involved that would resolve its concerns, they said.

“Seven and Marathon’s decision to close under these circumstances is highly unusual, and we are extremely troubled by it,” said Slaughter and Chopra.

Seven & i said on Friday it had reached a settlement with FTC staff at the end of April, in which it committed to divesting 293 stores. The agreement has not yet been signed by the FTC’s commissioners.

“If approved, that settlement will resolve all of the competitive concerns that the commissioners reference in their statement,” the company said. “We are hopeful that the commission will approve the negotiated settlement agreement in the near term.”

The deal for Speedway was struck after previous talks between Seven & i and Marathon broke down because of a failure to agree on pricing. The company had initially balked at paying $22bn for the Speedway operations but agreed a small 4.5 per cent discount five months later.

Marathon last year said the deal would generate about $16.5bn in after-tax proceeds, which would go to repaying debt and returning funds to shareholders.

Marathon reached the deal after coming under pressure from activist investor Elliott Management, which in 2019 campaigned to break up the company to address “chronic underperformance” in its businesses. It had already announced plans to spin off Speedway into a separate entity.

Marathon did not immediately respond to a request for comment on the statement.

The FTC will continue to investigate the transaction “to determine an appropriate path forward to address the anti-competitive harm”, Slaughter and Chopra said in their statement. “The parties have closed their transaction at their own risk”.