For the trading week ended April 22, my proprietary Canadian Cannabis Company Index (MCCCI) decreased by 12.1% compared to the prior week when it decreased by 1.2%.

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. 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.

Now let us look at this week’s good, bad, and ugly stocks, shall we? Image download failed.
 

Image by Ria Sopala from Pixabay

The Good

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

The Bad

There were 8 stocks that decreased by more than 10% (but less than 20%) which is my metric for inclusion in this category:

VVCIF –16.7%, CGC –15.0%, ROMJF –14.7%, HEXO –14.0%, OGI –13.6%, ACB –11.3%, VLNS –10.3% and TLRY –10.1%

The Ugly

There were 2 stocks that decreased by 20% or more, which is my metric for inclusion in this category: RDDTF –25.0% and EMHTF 25.0%.

Radiant Technologies Inc. (RDDTF) and Emerald Health Therapeutics, Inc. (EMTHF) are in the bottom quartile of the MCCCI which means that their sharp declines have a minimal effect on the Index.

Valuation Metric Review

There was a decrease of 13.9% in the “Big Four” compared to last week when there was a decrease of 1.6%. This is a “red flag warning” in the making.

Recap

None of the 22 stocks in the portfolio increased. There was a decrease of 12.0% in the relative strength index compared to the prior week when there was a decrease of 2.2%. The double digit decline in each of the 3 key MCCCI metrics signals increased option activity, which may increase volatility in the sector.

Let us see how this volatile sector has performed at the same time next week, shall we?