CANNABIS CORNER: Robust Revenue

Looking at the past year in the cannabis market reveals that the industry as a whole remains in good shape.

People are still buying marijuana and its derivatives for medicinal and recreational purposes. The only problem is in the way Wall Street has mapped this particular landscape.

The stocks that investors favored a year ago have cratered, shedding 40-90% of their value. But as new names emerge, the industry as a whole has actually gained ground year to date.

Wealth is being created here. It just isn’t happening for people who own Canopy Growth Corp. (NYSE: CGC), Tilray Corp. (NASDAQ: TLRY) or Aurora Cannabis Inc. (NYSE: ACB).

Instead, the money is going to once-tiny retail distributor Green Thumb Industries Inc. (OTC: GTBIF), which is now on track to rake in more revenue than CGC and TLRY put together.

And while growth has stalled for ACB in particular, GTBIF is still looking at doing 75% more sales a year from now than it can book today. That’s where the excitement in this industry has shifted.

Think twice about buying into the cultivators. The world is swimming in raw plant matter, and since that stuff is really just another agricultural commodity, price pressure on producers will remain severe.

Very few investors pour their money into wheat or corn producers with the same fervor that turned CGC and ACB into multi-billion-dollar companies. Similar logic applies here.

But when you move closer to the retail consumer, companies like GTBIF can grow with the market. As the cannabis map keeps lighting up green, that’s a much better place to be.

Hilary Kramer

Hilary Kramer is an investment analyst and portfolio manager with 30 years of experience on Wall Street. The Financial Times describes Ms. Kramer as “A one-woman financial investment powerhouse” and The Economist distinguishes her as “one of the best-known investors in America”. Ms. Kramer is often quoted in publications such as the Wall Street Journal, New York Post, Bloomberg, and Reuters. She is a frequent guest commentator on CNBC, CBS, Fox News and Bloomberg, providing investment insight and economic analysis. Ms. Kramer was an analyst and investment banker at Morgan Stanley and Lehman Brothers. Ms. Kramer founded and ran a long-short hedge fund and has been chief investment officer overseeing debt and equity portfolios. Since 2010, Ms. Kramer’s financial publications have provided stock analysis and investment advice to her subscribers. Her products include GameChangers, Value Authority, High Octane Trader, Triple-Digit Trader, 2-Day Trader, IPO Edge and Inner Circle. Ms. Kramer, a Certified Fraud Examiner, has also testified as an expert in investment suitability, risk management, compliance, executive compensation, and corporate governance. Ms. Kramer received her MBA from the Wharton School at the University of Pennsylvania and her BA with honors from Wellesley College. Ms. Kramer has provided testimony regarding investment policy to the U.S. Senate and is a frequent speaker on the markets, portfolio management and securities fraud and compliance. Ms. Kramer is also the author of “Ahead of the Curve” (Simon & Schuster 2007) and “The Little Book of Big Profits from Small Stocks” (Wiley 2012).