For the trading week ended August 2, 2024, my proprietary Canadian Cannabis Company Index (MCCCI) decreased by 2.3% compared to the prior week when it increased by 3.4%. 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?

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The Good

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

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: TSNDF -10.8%. I am no fan of TerrAscend Corp. which was a “good stock” last week and I consider a proxy for cannabis reclassification, which is in limbo.

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 2.4% decrease in the “Big 4” (2 of which decreased) compared to the prior week when there was s 3.6% increase. I would like to introduce a new metric based on “Big 4” which makes up 80% of the market capitalization of the MCCCI. My private clients who are active in the options arena have had much success using this stock-priced metric which decreased 8.2% last week. A decrease of this magnitude is akin to DEFCON 3, so caveat emptor is the mantra at present.

Recap

There was a 3.8% decrease in the relative strength index compared to the prior week when there was a 10.4% increase. 3 of the 14 MCCCI stocks increased, another sign of concern. 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, July 29
The Canadian Cannabis Report - Monday, July 22
The Canadian Cannabis Report - 2024 YTD Review