U.S. Investing

Cannabis Corner: The Glut is Over

Aphria Inc. (NASDAQ:APHA) remains one of the best of the big cultivators. This week’s earnings report gave us even more evidence.

Revenue is expanding at a healthy 33% annualized rate despite the pandemic disruptions in retail consumer markets. It makes sense: APHA is active in the medicinal market, where sick people don’t have a choice about going to the dispensary or not.

But the really exciting thing here is that management says the price per gram of raw plant material will remain relatively steady over the coming year. The savage supply glut that wrecked the cannabis industry in 2019-20 is ending.

People say the shifting political landscape is the reason Big Cannabis is up a staggering 100% since the November election. I beg to disagree.

Lowering the threat of renewed regulation would give already embattled stocks a little relief, but not a lot of rally fuel. What’s driving the rally is the realization that supply is finally back in line with consumer demand.

And from here, differentiated “Cannabis 2.0” products can take over and start making companies like APHA profitable. We’ve waited a long time.

We’re having a lot of fun with 2.0 companies on my IPO Edge buy list. While established pot portfolios are still trying to pull it together after a few miserable years, these stocks are soaring.

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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).