The Canadian Cannabis Report - Monday, January 11

For the trading week ended January 8, my (proprietary) Canadian Cannabis Company Index (MCCCI) increased by an eye-popping 23.1% compared to the prior week when it decreased by 5.3%. The index consists of 25 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. MCCCI's 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.

My 2020 report (published here on TalkMarkets) showed that the MCCCI had decreased by 21%, so 2021 is off to quite the reversal of form, and then some. Now let us look at this week’s good, bad and ugly stocks. 

Image Source: Unsplash

The Good

There were 15 stocks that increased by more than 10%, which is my metric for inclusion in this category: CBWTF +44.2%, CBWTF +35.1%, ZBISF +33.3%, HEXO +29.9%, ALEAF +27.9%, VLNCF +27.7%, CRON +26.7%, VVCIF +26.5%, TGODF +24.7%, CGC +24.2%, APHA +23.7%, NXTTF +23.5%, NEPT +23.3% ACB +22.2%, WDDMF +19.5% and SPRWF +18.0%.

The Bad

There were no stocks that decreased by more than 10% (but less than 20%) which is my metric for inclusion in this category.

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 24.4% increase in the “Big Four” compared to the prior week when it decreased by 5.7%.

Recap

The relative strength index increased by 24.7% compared to the prior week when it increased by a negligible ~1%. So how do I extrapolate the outstanding results of all 3 relevant metrics this week as a proxy for 2021? I am simply not ready to do that just quite yet, as 1 data point does not make a trend. That said, with 2020 in the rear-view mirror, perhaps it may be a happy new year for the Canadian cannabis sector after all. Let us see how this increasingly volatile sector has performed at the same time next week shall we?