The Canadian Cannabis Report- Monday, Aug. 21 For the trading week that ended August 18, 2023, my proprietary Canadian Cannabis Company Index (MCCCI) increased by 2.6% compared to the prior week when it increased by 7.1%. The index consists of 15 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 by Herbal Hemp from Pixabay
 

The Good

There were 3 stocks that increased by more than 10%, which is my metric for inclusion in this category: NEPT +80.7%, OGI +20.3% and CGC +17.5%. On 8/18/23 Neptune Wellness Solutions Inc. reported a Q1 earnings miss on both revenue and earnings. This company is among the lowest market capitalization stocks in the MCCCI portfolio and is thinly traded, which makes me think this sharp increase may have been temporary.
 

The Bad

There was 1 stock that decreased by more than 10% (but less than 20%) which is my metric for inclusion in this category: DLTNF -17.6%. On 8/14/23 Delta 9 Cannabis Inc. reported Q2 results which were basically in line with the prior quarter, which makes the sharp decrease quizzical to me.
 

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 2.5% increase in the “Big Four” (2 of which increased) compared to the prior week when there was a 5.2% increase. Of note was the sharp increase in Canopy Growth Corporation, as referenced above. However, I remain neutral on the group for the foreseeable future.
 

Recap

There was a 5.0% increase in the relative strength index compared to the prior week when there was a 4.8% decrease. 6 of the 15 MCCCI stocks increased but many of them had negligible % gains. Let us see how this volatile sector has performed at the same time next week, shall we?

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