For the trading week ended July 8, my proprietary Canadian Cannabis Company Index (MCCCI) increased by 5.6% compared to the prior week when it decreased by 13.5%. 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. 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, shall we?

Image by Herbal Hemp from Pixabay

The Good

There was 1 stock that increased by more than 10%, which is my metric for inclusion in this category: CRON +12.6%.
 

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 an increase of 7.1% in the “Big Four” (all of which increased) compared to the prior week when there was a decrease of 13.2%. In my view, whether this sea change is an anomaly or not will in large measure be event-driven.
 

Recap

10 of the 22 stocks in the MCCCI increased, including most of the 1st and 2nd quartile stocks in the portfolio. . There was an increase of 1.7% in the relative strength index compared to the prior week when there was an increase of 7.3%. 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 4
The Canadian Cannabis Report - Monday, June 27
The Canadian Cannabis Report - Monday, June 20