My Favorite Cultivator is Back

Hilary Kramer

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

This week revolved around one company in particular: Tilray Inc. (NASDAQ:TLRY) and its windfall profit. Nothing else mattered.

Yes, it’s possible to run a profitable cannabis business once you combine enough major players and achieve the right efficiencies of scale. TLRY can generate $0.18 per share as long as it keeps selling about $50 million in raw plant product every month.

That’s all it takes. And with revenue climbing 25% a year, odds are good profit margins will widen in the foreseeable future.

Profitability, in turn, provides management with multiple strategic advantages. As long as cash is flowing, future acquisitions can be funded with real money instead of stock grants.

And as long as the business throws off more cash than it spends, sustainability is no longer an issue. TLRY isn’t going away. This is a real company now, built for the long haul.

If you need to own one of the big cultivators, TLRY is my favorite. But as you know, I prefer a more diversified mix of large and small names as the “green gold rush” evolves.

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