The Canadian Cannabis Report- Monday, Dec. 13

For the trading week ended December 10, there was a decrease of 1% of in my proprietary Canadian Cannabis Company Index (MCCCI) compared to the prior week when there was a decrease of 12.4%. The index consists of 22 stocks, many of which are among the most widely held holdings of the 3 ETFs (MJ, CNBS, and THCX) that I consider to be a reliable barometer of the Canadian cannabis sector.

Image by Herbal Hemp from Pixabay

The MCCCIs differentiated business model is both weighted and market capitalization based because I believe that this approach best represents the current landscape of the Canadian cannabis sector. Now let us look at this week’s good, bad, and ugly stocks.

The Good

There was 1 stock that increased by more than 10% which is my metric for inclusion in this category: VLNCD +16.3%. The Valens Company Inc., which was on the "bad" list the prior week has been approved to begin trading on Nasdaq which will increase its visibility.

The Bad

There were 2 stocks that decreased by more than 10% (but less than 20%) which is my metric for inclusion in this category. FLWPF -10.7% and WDDMF -10.5%. The Flower Corporation is a repeat "bad" stock.

The Ugly

There were no stocks that decreased by 20% or more, which is my metric for inclusion in this category.

Valuation Metric Review

There was a decrease of 2.2% in the “Big Four” compared to the prior week when there was a decrease of 13.5%. The performance of this group for the remainder of 2021 will have a significant effect on the MCCCI, as many of the lower capitalization stocks in the index continue to be under pressure.

Recap

There was also a decrease of 2.9% in the relative strength index compared to the prior week when there was a decrease of 13.9%. In my view, it is a coin toss how this metric will perform going forward. Let us see how this volatile sector has performed at the same time next week shall we?