The Canadian Cannabis Report - Monday, July 5

For the trading week ended July 2, my proprietary Canadian Cannabis Company Index (MCCCI) decreased by 1.1% compared to the prior week when it had a negligible change. The index consists of 23 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. 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.

Image by Herbal Hemp from Pixabay

The Good

There were no stocks that increased by more than 10%, which is my metric for inclusion in this category.

The Bad

There were 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.

Recap

There was a decrease of 5.9% in the “Big Four” compared to the prior week when there was an increase of 8.5%. For the 4th consecutive week, they all traded in lock-step, which is an indication that their performance will become a greater influence on the MCCI going forward. The worst performer of this group was Canopy Growth Corporation (CGC) which decreased 5.9%. I have updated my private clients regarding my view of their merger with The Supreme Cannabis, Inc. (SPRWF), which will cause further dilution to shareholders. There was a decrease of 18.1% in the relative strength index compared to the prior week when there was a decrease of 6.4%. This sharp decline may be an early sign of increasing price pressure building throughout the sector. Let us see how this volatile sector has performed at the same time next week, shall we?