MACRO

For the trading week ended 6/5/20, my proprietary Canadian Cannabis Company Index (MCCCI) decreased by 4.2% compared to last week, when it was unchanged as the 3 highest market capitalization stocks all decreased 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 industry as a whole. 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 industry. 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

The following 2 stocks increased more than 10%, which is my threshold for inclusion in this category: HEXO Corp. (HEXO) +27.5% WeedMD Inc.(WDDMF) +19.2% In my view, HEXOs price spike was due to a company press release of 6/5/20 regarding the issuance of a license for their Belleville, Ontario facility. Despite this surge, HEXO is down more than 45% since my “Code Blue Alert” article of 1/8/20 at SeekingAlpha.com. HEXO will host a conference call on 6/11/20 to report Q 3 earnings and I will include my thoughts regarding HEXO’s future in next week’s report. WeedMD Inc. continued its topsy-turvy trading pattern, as this week it was the #2 performer compared to being last week’s worst performer.

THE BAD AND UGLY N/A RECAP

The overall index increased by 12.1 % compared to last week’s decrease of 9.3% as14 of the 25 MCCCI stocks increased Let’s see how this volatile sector has performed the same time next week, shall we?