For the trading week ended August 4, my proprietary Canadian Cannabis Company Index (MCCCI) increased by 7.6% compared to the prior week when it increased by 3.4%. The index consists of 22 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 by Herbal Hemp from Pixabay

The Good

There were 2 stocks that increased by more than 10%, which is my metric for inclusion in this category: NEPT +21.2 % and TLRY +11.1%. Neptune Wellness Solutions Inc. was a “bad” stock the prior week and is arguably one of the most inscrutable stocks in the MCCCI. Tilray Brands, Inc. has shown sustained support of late, although I am skeptical about this stock long-term.

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 was 1 stock that decreased by 20% or more, which is my metric for inclusion in this category: NXTTF -25.0%. Namaste Technologies Inc. was a “good” stock in the prior week and may continue a roller coaster ride price-wise going forward. Valuation Metric Review There was an increase of 9.2% in the “Big Four” (all of which increased modestly) compared to the prior week when there was an increase of 6.7%.Based on the recent performance of this very important metric, there is growing evidence that the sector as a whole may be approaching equilibrium.

Recap

14 of the 22 stocks in the MCCCI increased another bullish indicator. There was an increase of 28.8% (2022 high) in the relative strength index compared to the prior week when there was a decrease of 9.4 %. I continue to believe that a sustained bull market is unlikely absent a significant event such as favorable legislation for the sector but there are strong signs of sector support. Let us see how this volatile sector has performed at the same time next week, shall we?

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