E The Canadian Cannabis Report- Monday, Feb. 1

TM Editors Note: This article discusses one or more penny stocks and/or microcaps. Such stocks are readily manipulated; do your own careful due diligence.


For the trading week ended January 29, my proprietary Canadian Cannabis Company Index (MCCCI) increased 7.1% compared to the prior week when it was unchanged. The index consists of 25 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. 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. My 2020 report (published on TalkMarkets) showed that the MCCCI had decreased by 21% but it has trended positively so far in 2021, although of late support appears to be waning. Now let us look at this week’s good, bad and ugly stocks.

The Good

There was 1 stock that increased by more than 10%, which is my metric for inclusion in this category: CGC +18.6%.

The Bad

There were 6 stocks that decreased by more than 10% (but less than 20%) which is my metric for inclusion in this category: RDDTF -19.0%, ALEAF -17.6%, NXTTF -14.9%, CBWTF -12.9%, FLWPF -12.6%, and TGODF -12.0%

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 an increase of 10.2% in the “Big Four” compared to last week when there was a de minimum increase of 0.05%. This was caused by the 18.6% increase in Canopy Growth Corporation, which is by far the largest capitalization in the MCCCI.

Recap

There was a 12.3% decrease in the relative strength index compared to last week when it was unchanged. This was primarily caused by the overall weakness in several of the stocks in the lower 3 quintiles of the portfolio. This could be further evidence that 2021 will be a “survival of the fittest” year, and many lower capitalization MCCCI stocks will face an uncertain future. Let us see how this volatile sector has performed at the same time next week shall we?

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