For the trading week that ended August 16, 2024, my proprietary Canadian Cannabis Company Index (MCCCI) increased by 12.8% compared to the prior week when it decreased by 1.4%. 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? 

Image Source: Pixabay
 

The Good

There were 4 stocks that increased by more than 10%, which is my metric for inclusion in this category: OGI +40.8%, TSNDF +32.3%, CBWTF +17.8% and CRON +12.9%. The sharp spike in Organigram Holdings Inc. may very well be transitory. Auxly Cannabis Group Inc., which I pointed out in the prior report had increased 215.6% YTD continues to show no sign of weakness for the foreseeable future. CBWTF is a $36.7M market capitalization stock with little analyst coverage.
 

The Bad

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

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 12.5% increase in the “Big 4” (all of which increased) compared to the prior week when there was s 2.6% decrease. The “good stock” performance of TSNDF and CRON accounted for this increase, which I also consider a short-term phenomenon. The stock-based metric introduced in the prior week’s report based on “Big 4” which makes up 80% of the market capitalization of the MCCCI increased by 23.1% compared to the prior week when it decreased by 11.7%. Despite this reversal, I believe a DEFCON 2 rating remains appropriate.
 

Recap

There was a 6.9% increase in the relative strength index compared to the prior week when there was 13.7 % increase. 8 of the 14 MCCCI stocks increased, a recent high. Let us see how this volatile sector has performed at the same time next week, shall we?

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