Good morning, everybody, and welcome to BVTV. I'm Mario Eisengger and today we're going to talk for once about facts and drugs. I'm very pleased to be joined this morning by Steven Wilson Smith, who's a credit research analyst for the tobacco and beverage sector. Good morning, Steven. Good morning, Mario. Thanks for joining me this morning on the couch. Thank you. Well, Steven, we have seen some considerable market moves last week with some notable repricing, especially in the US. So the S&P 500, for example, has closed below its 200 day moving average level, which usually points to more volatility ahead. So the sectors you cover are historically known as more stable sectors, given the predictability of cash flows. But when I was looking at a couple of names in your space, there has actually been quite a bit of volatility of late. So what has -changed? -Well, I think what's changed is governments around the world have stepped up their efforts to reduce smoking. They've done this through changes in law, bans on smoking and taking actions that make it either more difficult to smoke cigarettes or to buy cigarettes. And this has led to the markets being worried about an acceleration in the sort of drop of of volumes that have been traditional in the industry. At the same time, the industry response has been to innovate, to produce new products, so-called next generation products, either vaping products or heat, not burn products that reduce harm for consumers, but allow them to consume tobacco and nicotine. And nowhere can this these fears and these hopes of the tobacco industry be better seen than in the share price of Philip Morris International. They developed this product, iQOS, which is a heat not burn product and introduced it into Japan. And when sales of traditional tobacco fell into Japan, the market thought that obviously this product was was growing quite considerably. And the share price of Philip Morris rose rapidly. Later on when they came up with first quarter results. The market was disappointed in the take up of this product and share price fell considerably. And also at the same time, bond spreads widened. But for us as bond investors, we focus on the cash flow of the companies. All of the cash flow of the industry comes from traditional tobacco and not from next generation. So we saw that as a buying opportunity. Very interesting. And it's not just about the technological changes. It's also about, you know, changes in law that can disrupt the sector. Canada, for example, has just legalised cannabis this year, which I guess will have some sort of impact on tobacco companies as -well. -Well, you'd think so. So far, though, it seems like the drinks companies are much more interested in the developments of cannabis. So, for example, Canopy Growth, which is the largest producer of cannabis in the world, a Canadian company. You've seen its share price rise and rise with legalisation of cannabis in different areas. And then the share price rose considerably when Constellation Brands bought a big stake in the company. Constellation Brands is a very large drinks company. They produce and distribute Corona beer in the United States, as well as Claude Dubois wine. And we've seen other drinks companies like, for example, Molson Coors announce that it's going to be developing a cannabis infused non-alcoholic beer throughout Canada. So really it's the drinks companies that seem to be much more active in this area. It's very interesting. And I guess to really, you know, assess this cannabis theme properly, I think there's no way around. We need to look at the US, right. The biggest market. Yes. And that's very interesting what's happening there. Cannabis is being legalised in different States right now, either on a purely medicinal basis or on a recreational basis. And in fact, there's only four States right now where there's no marijuana laws whatsoever. So if that market develops, like in Canada and becomes completely legal, you'll definitely see more share price moves and more bond -spreads moves as a result. -Oh, thank you very much, Stephen. It's been super insightful. I think it showcases perfectly how we as investors need to stay on top of things when it comes to, you know, technological change, changing consumer behavior or also changes in law that all can disrupt sectors we invest in. So thank you so much. Thank you. So before we go, let's quickly look at the week ahead. So there is no major central bank meeting scheduled this week, but instead we'll get various inflation print from around the world. So definitely something that gives the market something to chew on. Thanks very much for watching and have a fabulous week.