Investors looking for a way to capitalize on the rise of legal cannabis should look no further than Canadian cannabis giant Canopy Growth Corp., CNBC’s Jim Cramer said as stocks recovered from a multi-day selling streak.
Cramer mentioned Constellation Brands’ $ 4 billion investment in Canopy Growth. This is a vote of confidence among alcohol manufacturers that the growth of the marijuana industry is just beginning.
“If you believe, over the long term, that cannabis is going to be good, I think Constellation’s good and I think Canopy’s good. It’s got the best balance sheet. That matters a great deal to me,” Cramer said.
Feb in Focus
A month after the next much anticipated interest rate hike by the Federal Reserve, FRB President Jerome Powell faces a crucial moment in determining the trajectory of the US economy, Cramer I mentioned on Thursday .
After listening to Powell’s remarks in Wednesday’s interview with Dallas Fed President Robert Kaplan, Cramer initially worried about the rate at which the Fed would raise interest rates. The central bank has announced its intention to raise the interest rate once again in December, three times in 2019.
In an interview at the Dallas interview, Powell admitted that the pace of growth in the global economy was slowing down, but said, “It’s not that slow. Earlier this year, Powell said the Fed had moved “far” from the neutral rate and hinted that further increases would go forward.
“Kaplan’s questions allowed Powell to walk back his sadly intemperate comments from October, comments that seemed to be almost blithely oblivious to some of the more worrisome data out there,” Cramer reflected.
Now, the central bank chief is realizing that “there’s another side” to the U.S. economy that is splintering under the dual pressures of higher rates and higher tariffs, he said.
CEOs’ Confidential Worries?
Company leaders across industries are telling Cramer — off the record — that they’re worried about a slowdown in the U.S. economy.
“So many CEOs have told me about how quickly things have cooled,” the “Mad Money” host said. “So many of them are baffled that we could find ourselves in this late-cycle dilemma that wasn’t supposed to occur so soon.”
Kramer warned investors for weeks about the artificial slowdown in the US economy, supported by the two pressures exerted by the Federal Reserve to raise the interest rate and the Trump tariff. A senior CEO now fears that growth will slow down sharply and may actually have a negative impact on the economy, he said.
“There are degrees of slowdowns that, nonetheless, can cause an awful lot of havoc and cost a lot of jobs, and that’s what we’re on the verge of here,” he said. “That’s what the markets are saying. That’s what the CEOs are worried about offline.”
Cramer’s GE retrospective
General Electric’s troubles have been followed by many, but two Wall Street analysts have correctly called the industrial’s prolonged downfall every step of the way, Cramer said Thursday.
Stephen Tusa, an analyst at J.P. Morgan, and John Inch, a Gordon Haskett analysts formerly of Deutche Bank, “have been negative on GE for ages now, and they have been relentlessly and painfully right,” Cramer said.
“They nailed this story every step of the way, even when the company itself seemed to be totally clueless — or perhaps something even worse — about its own prospects,” he said. “Which is why you do need to take your cue from these two gentlemen and wait until the real problems they say are solved before you get bullish. And they sure aren’t there yet.”
MJardin Chief Executive Officer and GrowForce General Manager Rishi Gautam confirmed the situation of cannabis manufacturers and distributors in Cramer with the merger of the two companies, and the prospects look promising.
Gautam, which the company began trading on Canadian stock markets on Thursday, said the merger indicated that in the exclusive interview “the largest cannabis operator in the world” had been founded.
“We produce and sell more legal cannabis than Tilray and Canopy combined,” Gautam said, calling out two of the top U.S.-listed cannabis companies. “We’re very excited with this opportunity.”