South by Southwest may be best known for its music and film festivals, but it's the tech portion of the show that attracts many investors -- like us -- to the "Silicon Hills" of Austin, Texas.
Yes, there is the predictable (but important) focus on AR, VR, AI, and self-driving technology. But as Motley Fool analysts Rex Moore and Sam Barker report in the video below, this year's SXSW also featured an industry that may surprise you with its crazy growth, and another many have largely dismissed but is something investors should be paying attention to.
The hottest thing going these days is marijuana, which was mentioned several times in Austin as the fastest-growing industry in the nation. "Cannabusiness" is attracting a lot of money and firepower, including former Speaker of the House John Boehner. He's on the board of Acreage Holdings, a U.S. company involved in cultivating, processing and dispensing the product. Boehner is hoping to lend his expertise as the industry continues its push toward national legalization -- and companies like Coca-Cola (KO 1.55%), Diageo (DEO 0.37%), Altria (MO 1.32%), Anheuser Busch Inbev (BUD +1.02%), and Boston Beer Company (SAM +1.59%) consider their options for participating in the cannabis boom.
Meanwhile, cryptocurrency and the underlying blockchain technology have slipped back under the radar after the crypto-crash of 2018 saw bitcoin drop over 75% in value. But the industry is alive and kicking... and blockchain technology is being used today in a variety of industries, including supply chain management for healthcare and cannabis.
Finally, Rex and Sam talk about an electric-scooter invasion in America's urban areas and what this means for the future of soon-to-be-public Uber and Lyft.
Transcript:
Rex Moore: Hi everyone, I'm Motley Fool analyst Rex Moore along with my colleague Sam Barker... and we're at one of the biggest tech shows in the country, South by Southwest. We're bringing you what we think are maybe some of the biggest takeaways.
We've got an infestation of electric scooters, we've got bitcoin and blockchain, and we even have cannabis... marijuana.
Sam, let's start with that. You've written some stories about investing in this industry, what did you see here?
Sam Barker: Yeah Rex, it's been a pretty remarkable show so far. This is the first time they've ever had a "cannabusiness" track here. Usually it's all pretty tech focused, but they kind of bucked the trend this year. One thing that really stood out for me was... I just came back from a conference with Adam Bierman, the CEO and founder of MedMen. It's an upscale cannabis dispensary in the United States.
It was really remarkable the type of growth that industry has seen just over the course of the last couple of years. They were the first cannabis company to get a ten-figure valuation. And he didn't see the impending investments from the big companies like Coca-Cola, Diagio, Altria, or some of the other alcohol companies like Anheuser-Busch and Sam Adams as a threat. Instead, he saw it as validation for the industry. He wasn't even worried about what's going on with cannabis right now. In fact, he said when we see federal legalization he thinks that this industry is going to go from being a caterpillar to a butterfly.
That was really remarkable to hear. He even had a video that company produced that was directed by Academy Award winner Spike Jones. It had actor Jesse Williams starring in it. So it kind of just shows how that has gone from normalized to kind of illegal and frowned upon, and they're trying to bring back that new normal. So that was something fascinating.
Rex: A lot of interest in that among our audience as well. Now something a little less obvious... electric scooters. This wasn't here last year. I've been here a few years in a row, and suddenly you can't walk anywhere without almost getting run down by a scooter.
But the takeaway for investors is like Uber and Lyft... you can get these scooters through those apps, and it's pretty cheap to get from Point A to Point B. Uber and Lyft... they didn't come into being saying, "We're going to take a certain percentage of taxis' business" or whatever. They've greatly expanded the market. Many more people are doing ride-sharing now than at any time else. This just kind of shows you where we're looking for urban mobility and solutions within the cities.
And then finally, an entire section devoted to bitcoin and blockchain, or cryptocurrency and blockchain I should say. Did you see anything interesting there?
Sam: Yeah, so 2017 was when we had the peak, and very soon afterwards we had the downfall of bitcoin. It spiked at over $17,000 for one coin, and then had a precipitous drop right when it became more mainstream and more people started investing in it. But the one thing that kind of lingered around bitcoin still out there and seeing some popularity among investors is the blockchain technology that is built through bitcoin.
There are so many different applications for this blockchain technology. We're seeing it in supply chain management... an example when we had just a couple of months ago we had that big outbreak of I think it was E. coli within a bunch of iceberg lettuce, and they had to take all that lettuce off the shelves. What this blockchain technology can do is instead of having to take every single thing of lettuce off the shelf, if they had a way of tracking which farm had the lettuce that caused this E. coli or a direct link to that exact strain of E. coli that was in there, they could take that lettuce off the shelf. And then suppliers and stores like Walmart or your local grocery store, they're not going to be seeing losses from taking an entire product off the shelves. They can find which ones were the cause of it and keep the other ones on shelf.
Rex: I think my biggest takeaway is that, people by and large lost interest when the prices crashed in cryptocurrency, but there are thousands and thousands of people working in this industry and it's going to blossom into something, especially blockchain and crypto. So I think investors need to keep an eye on that if it's something that interests them.
So that's it from South by Southwest here in Austin. Thanks for joining us Sam... and Fool on, everyone!
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