Cannabis Corner: Not Everyone Cheers Kamala

Hilary Kramer

Hilary Kramer is an investment analyst and portfolio manager with 30 years of experience on Wall Street.

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. 

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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. 

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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.

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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.

Exclusive  Gold’s Break Out to a New All-Time High Is Legit

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.

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