Commodities and Gold

My Favorite Cultivator is Back

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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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).