Commodities and Gold

Selling Lamps to the Growers

Once again, Big Cannabis is swinging wide in the absence of compelling negative news. People are simply hungry to short stocks like Aurora Cannabis Inc. (NASDAQ:ACB) and Canopy Growth Corp (NASDAQ:CGC). They say it’s too easy.

I agree. Any time Wall Street gives you a trade opportunity that looks too good to be true, you should probably treat it with special care.

Big Cannabis has had a rough couple of years and ACB and CGC are lagging the market as a whole year to date. But concocting a reason for the entire cannabis group to follow in their wake will only leave you tangled in your own logic.

Yes, the big growers have serious economic challenges that simply issuing more stock to buy out smaller competitors will not solve. We saw this play out today after Tilray Inc. (NASDAQ:TLRY) hinted at that exact same tactic and fell 3% in response.

Cannabis is more than the growers, however. The industry has come a long way. And if you’re shorting the group, you’ll lose money going against GrowGeneration Corp. (NASDAQ:GRWG), which sells the hydroponic equipment the growers need.

That’s a great business. They get paid no matter how much the growers get per ounce of raw plant product. It’s no surprise that GRWG is already profitable and raising the bottom line by a spectacular amount, year after year.

The stock is up 13% this week and 21% year to date. It’s in my Triple-Digit Trader portfolio for a reason.

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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).