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Streetwise newsletter: The week’s best reads: Drake, Gosbee, CanniMed, ETFs

Over the past 10 years, Bay Street’s best-rated stocks failed to beat the S&P/TSX composite index.

Mark Blinch/The Globe and Mail

Here are the best read of the week. Have a great weekend,

Investing shots: At 25, Drake said he was sitting on $25-million. Now he's 31 – and inviting the public to get a $30-million bite of his ever-growing brand, announcing plans to file for a $30-million (U.S.) initial public offering with spirts producer Brent Hocking. Story (Josh O'Kane, for subscribers)

"Maybe people will have more of an empathetic ear to other leaders out in the business community.": He was the exemplar of a new generation of Alberta entrepreneurs. He built an investment bank from nothing – earning huge wealth, acclaim and the ear of Justin Trudeau. But beneath the veneer of business success, there was another side to George Gosbee – one of mental illness and alcoholism. The family he left behind tells their story. Story (Kelly Cryderman, for subscribers)

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Nesbitt new head: Bank of Montreal's investment dealer BMO Nesbitt Burns Inc. has appointed a new leader five months after the departure of its former head, Charyl Galpin. Story (Clare O'Hara, for subscribers)

Takeover drama: CanniMed Therapeutics Inc. is suing a former and a current director, its largest investors, Aurora Cannabis Inc. and Canaccord Genuity Group Inc. for allegedly misusing its confidential information and conspiring to engineer Aurora's hostile takeover of CanniMed. Story (Christina Pellegrini, for subscribers)

Rethink: Canadian securities regulators are rethinking the rules that allow cannabis companies doing business in the United States to raise funds in Canada's stock markets. Story (Christina Pellegrini, for subscribers)

Proxy firm weighs in: Institutional Shareholder Services Inc. is recommending CanniMed Therapeutics Inc. investors vote in favour of the medical marijuana company's takeover of Newstrike Resources Ltd., a blow to a larger industry rival seeking to acquire CanniMed. Story (Jeff Jones, for subscribers)

Weed Kings: Rob Baker, lead guitarist for the Tragically Hip, is chatting about the surging market for cannabis-company stocks. It's high dough – some might say too high. The short-term gains make things all the more interesting for Mr. Baker, king of the northern power chord, and now a stakeholder in the weed sector. Story (Jeffrey Jones and Christina Pellegrini, for subscribers)

Cross-border promo: Federal Liberals are promoting the Canada Infrastructure Bank to the Trump administration as a way to fund large cross-border projects. Story (Bill Curry, for subscribers)

Follow the money: The popularity of exchange-traded funds continues to accelerate in Canada at a record-breaking rate. Last year, more than $26-billion flowed into ETFs, up 56 per cent from the previous annual record set in 2016. Story (Clare O'Hara)

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Bitcoin miner financing: Canadian bitcoin mining company Hut 8 Mining Corp. says it has raised $38-million in a private placement as it prepares to go public through a reverse takeover this quarter. Story (Alexandra Posadzki, for subscribers)

Infrastructure Bank startup: The Canada Infrastructure Bank is heading into its first full year of operation without a permanent CEO, but the bank's chair is hoping the $35-billion entity will be in a position to start approving projects by the end of 2018. Story (Bill Curry, for subscribers)

People move: Jimmy Shan, a managing director in equity research at GMP, is leaving the independent dealer to work for Slate Asset Management. Story (Tim Kiladze, for subscribers)

Pot ETFs: Investors looking to jump into pot stocks may soon be able to do so with an additional Canadian-listed exchange traded fund that focuses on the marijuana industry. Story (Clare O'Hara, for subscribers)

Do the math on the cost per employee: Toronto-Dominion Bank has agreed to buy a one-year-old artificial-intelligence startup with just 17 employees for more than $100-million (U.S.), paying dearly for Canadian machine-learning talent that has been in hot demand from the world's technology giants. Story (Sean Silcoff, for subscribers)

Soaring marijuana stocks blunt deals: The frenzied run-up in marijuana stocks is threatening the sector's highest-profile takeover deals. Story (Christina Pellegrini and Jeffrey Jones, for subscribers)

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Banks on Trump tax changes: Some of Canada's biggest banks are bracing to take a one-time hit to profits as a result of major tax cuts in the United States, but they expect to earn any short-term losses back in spades. Story (James Bradshaw)

Waterloo software firm financing: One of Waterloo, Ont.'s emerging software stars, Igloo Inc., has attracted $47-million (U.S.) in investment capital from U.S. private equity giant Frontier Capital. Story (Sean Silcoff, for subscribers)

Industrial REIT takeout: Some real estate owners have actually profited from the digital push, particularly those with industrial properties dominating their portfolios. Story (Tim Kiladze, for subscribers)

ATB boosts AltaCorp stake: ATB Financial, Alberta's government-owned bank, has taken a majority interest in AltaCorp Capital Inc. following the death of its founder, George Gosbee. Story (Jeffrey Jones, for subscribers)

HBC eyes store redevelopment: Hudson's Bay Co. is taking steps to drive up the price of its flagship Vancouver store as it officially puts a "for sale" sign on the property. Story (Rachelle Younglai)

PI Financial hires mining research head: Independent investment bank PI Financial Corp. has hired a new mining research head, snagging a veteran analyst amid a resurgence for junior mining companies. Story (Tim Kiladze, for subscribers)

Analyst departure: Yet another senior real estate analyst is leaving Bay Street, with Heather Kirk deciding to step away from sell side research at BMO Nesbitt Burns. Story (Tim Kiladze, for subscribers)

Bank stocks: In the past couple of years, Canadian bank stocks have powered through concerns about energy loans, new regulations for the domestic housing market, rising competition from technology companies and short-selling activity by U.S. investors. What should investors expect now? Story (David Berman, for subscribers)

McQueen to CIBC: Canadian Imperial Bank of Commerce is making a push back into Canada's thriving technology sector, acquiring private specialty finance firm Wellington Financial for an undisclosed sum. Story (James Bradshaw and Sean Silcoff, for subscribers)

Inevitable: Financial information giant Bloomberg LP is expanding its media presence in Canada, striking a deal with Bell Media to rebrand its flagship business-news channel. In the spring, Bell's BNN (Business News Network) will become BNN Bloomberg. Story (Susan Krashinsky Robertson)


House sector watch: Canada's mortgage-rate trendsetter, Royal Bank of Canada, hiked its posted five-year fixed mortgage rate Thursday. In days gone by, I never would have written about this. Posted rate changes were no big deal. Today, they are. Story (Rob McLister)

Tax reform fallout: Sun Life Financial Inc. says it will take a $200-million charge related to U.S. tax reform when it reports its fourth-quarter results. Story

More tax reform fallout: JPMorgan Chase & Co beat Wall Street's fourth-quarter earnings expectations on Friday and said tax law changes will help future profits by not only reducing the amount it pays the federal government but also by stimulating more business. Story

How many zeros is that?: BlackRock Inc charged past a record $6-trillion (U.S.) in assets, its profit beating Wall Street forecasts, as investors flooded into the relatively low-cost funds of the world's largest asset manager. Story

U.S. bank outlook: Wells Fargo & Co set aside $3.25-billion (U.S.) in the fourth quarter to cover legal expenses related to probes into its mortgage and sales practices, but its 2018 cost outlook met analyst expectations as the bank tries to rebound from the scandal in its consumer banking business. Story


No waffling here: U.S. tax reform was a hot topic at Royal Bank of Canada's annual conference of bank CEOs in Toronto this week, as major Canadian banks with U.S. operations look forward to a lift in profits from falling corporate tax rates.

But Louis Vachon, the CEO of Montreal-based National Bank of Canada, has steered clear of major U.S. acquisitions, maintaining a modest specialty finance business south of the border while placing bets in a small handful of emerging markets like Cambodia. Asked whether he would consider making a more substantial investment to build a retail banking presence in the U.S., he made his intentions clear - very, very clear:

"I don't know how many banks there are in the U.S., there are thousands of banks. Do you need another one? I don't think so. ... Frankly, I look at the U.S., and it's a great place. I have a house in Maine but I don't have an urge to have a bank in Maine. I mean, frankly, it's an overbanked market. Long-term, the demographics of Canada are as good if not better than the U.S. because of a more balanced – and I'm being very politically correct – a very balanced immigration policy in this country. ... There are way too many [U.S.] banks. The regulators and the political side has been – again, I'm being polite – unpredictable. So I like my specialty finance business. Frankly, I feel no urge to buy a business in the U.S. – none whatsoever. I think it says a lot when I prefer to deploy capital in Cambodia than the U.S." - James Bradshaw

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