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For the trading week that ended September 15, 2023, my proprietary Canadian Cannabis Company Index (MCCCI) increased 10.7% compared to the prior week when it increased 10.9%. 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?

The Good

here were 3 stocks that increased by more than 10%, which is my metric for inclusion in this category: ACB +56.7%, CGC +24.5% and OGI +12.3%. Seeking Alpha reported that Aurora Cannabis Inc. soared after a convertible note repurchase. I have advised my private option clients that I am wary of this stock going forward based on their fragile financials.

The Bad

There was1 stock that decreased by more than 10% (but less than 20%) which is my metric for inclusion in this category: NEPT -13.7%. The “erratic trading history” of Neptune Wellness Solutions Inc. which I cited in the prior week report continues as the stock has been a “good,” “bad,” and “ugly” stock in the prior 3 weeks. Needless to say where NEPT trades this coming week in akin to playing 3 card Monte.

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 13.1% increase in the “Big Four” (3 of which increased for the 3rd consecutive week) compared to the prior week when there was a 12.0% increase. As I said in the prior week’s report, “volatility in this group is increasing and quite frankly quizzical to me.” Although I am an advocate of “don’t fight the tape,” in my view the sharp increase in CGC for the prior 3 weeks is unsustainable.

Recap

There was a 15.8% increase in the relative strength index compared to the prior week when there was no change. 7 of the 15 MCCCI stocks increased. Let us see how this volatile sector has performed at the same time next week, shall we?

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The Canadian Cannabis Report - Monday, Sept. 11
The Canadian Cannabis Report - Monday, Sept. 4
The Canadian Cannabis Report- Monday, August 28, 2023