The Canadian Cannabis Report - Monday, July 18

For the trading week ended July 15, my proprietary Canadian Cannabis Company Index (MCCCI) decreased by 2.5 % compared to the prior week when it increased by 5.6%. 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 was 1 stock that increased by more than 10%, which is my metric for inclusion in this category: TRSSF +12.1% I have shared my thoughts that TerrAscend Corp. may be an optionable stock based on the company’s increasing short interest.
 

The Bad

There were 4 stocks that decreased by more than 10% (but less than 20%) which is my metric for inclusion in this category: ROMJF -18.6%, DLTNF -15.4% VLNS -11.1%, and CGC -10.4%.
 

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 a decrease of 10.4% in the “Big Four” (all of which decreased) compared to the prior week when there was an increase of 7.1%. In my view, Canopy Growth Corporation is at risk of further price pressure and may be of interest to those who are involved in the options space.
 

Recap

4 of the 22 stocks in the MCCCI increased, many of which are mid-tier or lower capitalization members of the portfolio. There was an increase of 4.2% in the relative strength index compared to the prior week when there was an increase of 1.7 %. Let us see how this volatile sector has performed at the same time next week, shall we? 

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