For the trading week ended January 14, 2022, there was no change in my proprietary Canadian Cannabis Company Index (MCCCI) compared to the prior week when there was a decrease of 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.

Image by Herbal Hemp from Pixabay

The 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.

The Good

There were 4 stocks that increased by more than 10% which is my metric for inclusion in this category: NXTTF +24.1%, FLWPF +20.8%, WDDMF +15.5% and NEPT +10.1%. Lifeist Wellness Inc. has now been on the good” list for 2 consecutive weeks. All 4 of these stocks are cohorts of the 3rd quartile, and therefore have a less pronounced impact on the MCCCI.

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 no change in the “Big Four” compared to the prior week when there was also no change. Has equilibrium been reached, albeit in the short term? This is an interesting thought in my view.

Recap

14 of the 22 stocks in the portfolio decreased, but a more valuable metric that I have now included in my modeling work is that only 2 stocks in the top ½ market capitalization increased this past week. I may provide more clarity as to the significance of this new metric going forward. There was an increase of 3.9% in the relative strength index compared to the prior week when there was an increase of 4.1%. Let us see how this volatile sector has performed at the same time next week shall we?