The Canadian Cannabis Report - Monday June 29

Editors' note: This article discusses one or more penny stocks and/or microcaps. Such stocks are easily manipulated; do your own careful due diligence.

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MACRO

For the trading week ended 6/26/20, my proprietary Canadian Cannabis Company Index (MCCCI) decreased by ~ 5% compared to last week when it increased by 3.2%. 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. 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. As I’ve said here before, I believe there will be a pronounced reset in this sector, likely in Q3 or Q4 of this year. including but not limited to business failures, consolidation, and a significant downtrend in valuation. The survivors will be those companies that can operate profitably when the equilibrium price is established by the supply/demand dynamics. Let’s look at this week’s good, bad and ugly stocks.

MICRO THE GOOD

There was only one stock that increased by more than 10% which is my threshold for inclusion in this category: Neptune Wellness Solutions Inc. (NEPT) barely made the cut as it was up ~10%. I am going to provide readers with a mid-year review on July 1, and you may be hearing about NEPT then.

THE BAD

There were 3 stocks that decreased between 10% and 20% (note clarification of definition per reader inquiry) which is my threshold for inclusion in this category: Supreme Cannabis Company Inc. (SPRWF) -14.6% OrganiGram Holdings Inc (OGI) -11.6% Namaste Technologies Inc. (NXTTF) -10.7%.

THE UGLY

There were no stocks that decreased by more than 20% (note clarification of definition per reader inquiry) which is my threshold for inclusion in this category.

RECAP

The overall index decreased by 9.3 % compared to last week’s decrease of 6.9 % It appears there is now increasing evidence of growing broad-based weakness in the sector. The 10 highest market capitalization MCCCI portfolio stocks all decreased in value- 5 of them by 5% or more which contributed to the steep decline in the index. Let’s see how this volatile sector has performed the same time next week shall we?