Image Source: Pixabay
 

For the trading week that ended April 12, 2024, my proprietary Canadian Cannabis Company Index (MCCCI) decreased by 16.8% compared to the prior week when it increased by 9.2%. The index consists of 14 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

There were no stocks that increased by more than 10%, which is my metric for inclusion in this category.
 

The Bad

There were 4 stocks that decreased by more than 10% (but less than 20%) which is my metric for inclusion in this category: MEDIF -15.6%, OGI -13.4%, TSNDF -11.6%, and CRON - 10.7%. MediPharm Labs Corp. recently reported improved results but may be hamstrung until the froth in the sector subsides.
 

The Ugly

There were 3 stocks that decreased by 20% or more, which is my metric for inclusion in this category: DLTNF -36.8%, TLRY -32.9%, and CGC -26.9%. Delta 9 Cannabis Inc. also reported improved results and may be affected by adverse sector conditions.
 

Valuation Metric Review

There was an 11.1% increase in the “Big 4” (all of which decreased) compared to the prior week when there was a 7.1% increase. Auxly Cannabis Group Inc. was the lone gainer in the MCCCI and increased by 8.7%.
 

Recap

There was a 2.8% increase in the relative strength index compared to the prior week when there was a 16.4% increase. Based on my review of Q1 results, my skepticism regarding Q2 has increased. Lackluster is the operative word here as the MCCCI was unchanged in Q1. Of added significance is that the “Big 4,” which represents 84.8% of the MCCCI is clearly the key to the performance of the MCCCI. As a result, going forward there will be an added focus on CGC, CRON, TLRY, and TSNDF. Let us see how this volatile sector has performed at the same time next week, shall we?

Author’s Note: This is the 215th issue of the Canadian Cannabis Report since its inception on 4/16/20. At that time, there were 25 stocks in the MCCCI. Now there are 14 stocks, which means that there has been an 11 stock or 44% fewer stocks. In addition, the market capitalization of the cohort is significantly lower now and the “Big 4” is 84.8% of the MCCCI. The changes are intended to assist those interested in option activity, which I am on record as not participating in this high risk/high reward activity.

More By This Author:

The Canadian Cannabis Report - Monday, April 8
The Canadian Cannabis Report - Monday, March 25
The Canadian Cannabis Report - Monday, March 18