For the trading week ended December 3, there was a decrease of 12.4% decrease in my proprietary Canadian Cannabis Company Index (MCCCI) compared to the prior week when there was an increase of 1.1%. 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.

Image by Herbal Hemp from Pixabay

The MCCCIs 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.

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 9 stocks that decreased by more than 10% (but less than 20%) which is my metric for inclusion in this category: FLWPF -18.1%, NEPT -18.0%, OGI -15.7, TLRY -15.4%, CGC -14.5, ACB -14.3%, VLNCD -13.7%, MEDIF -12.2%, and CRON -10.9%. 

The Ugly

There were 2 stocks that decreased by 20% or more, which is my metric for inclusion in this category: HEXO -21.3%, and TGODF -20.5%. 

Valuation Metric Review

There was a significant decrease of 13.5% in the “Big Four” compared to the prior week when there was a decrease of 4.5%. This is of grave concern going forward.

Recap

There was also a significant decrease of 13.9% in the relative strength index compared to the prior week when there was a decrease of 3.1%. This is also a troubling metric for the rest of 2021. Let us see how this volatile sector has performed at the same time next week shall we?