International Investing

Cannabis Corner: Not Everyone Cheers Kamala

While the vice-presidential debate failed to make much market impact, I heard a few investors cheer when Kamala Harris once again promised to do what she can to decriminalize marijuana across the United States.

It wasn’t news. She’s said it before. And it doesn’t change the regulatory environment for the dispensaries or the cultivators that supply them.

But as a ray of relief in a gloomy season, it felt great. The stocks in the group I track are up 21% over the past week and at this point, the bulls have almost endless runway to keep running.

However, I can’t help but notice that some cannabis stocks rallied a lot harder than others. Once again, the pure cultivators feel the weight of their commodity-oriented business model.

There’s simply too much dried plant matter to harvest, which drives prices down for everyone but consumers who insist on an extremely high-quality experience.

As a result, while Aurora Cannabis Inc. (NYSE:ACB), for example, rebounded 9% this week, it’s still down a harrowing 48% since the market as a whole peaked on Aug. 31.

And the year-to-date (YTD) losses get even bigger. Tilray Corp. (NASDAQ:TLRY) has lost 64% of its value over the past nine months. With that in mind, this week’s bounce is a healthy step in the right direction, but we’ll need a lot more than a political sound bite to really turn things around.

Once again, the real thrill is on the business-to-business side, where hydroponic equipment maker GrowGeneration Corp. (NASDAQ:GRWG) has become a Wall Street sensation. The decision to leave farming to others has been a good one.

I’m also pleased to see the buzz spread to private companies like Drop Technology, which has already made friends among my IPO Edge subscribers through its innovative “crowd-funded” market debut.

The IPO Edge portfolio is up big as I write this cannabis column, with two triple-digit-percentage wins accumulating profit and a recent 165% exit still radiating heat. More is on the way.

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).