Cannabis Corner: Marathon Time for ‘Green’ Shoots

Wall Street’s failure of nerve this week played out across all speculative themes, especially Big Cannabis.

My proprietary basket of stocks like Aurora Cannabis Inc. (NYSE:ACB), Canopy Growth Corp. (NYSE:CGC) and Tilray Inc. (NASDAQ:TLRY) dropped another 10% and is now up a mere 22% year to date (YTD).

If you bought the top, it has been a harrowing ride. But for those who had the conviction to buy these stocks back in December and hold on, you’re still beating the market by about 7 percentage points.

That’s not so bad, is it? Never forget that these stocks are a marathon and not so much a sprint. Weak players will drop out of the industry and surrender their market share to stronger rivals.

Demand for cannabis hasn’t gone away in the pandemic or afterward. That’s a good thing.

Talk about a federal repeal of consumption and sales restrictions will only accelerate the success path here. And these companies were always going to take years to achieve sustainable profitability anyway.

We won’t know who wins the marathon for miles to come. That’s why I insist on diversification. You want to be sure you end up holding the winners in your hand when the last losers fold.

Naturally, that means owning the losers as well. But their pain isn’t going to be as intense as the delight the winners will provide when the race is over.

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).