For the trading week that ended July 28, 2023, my proprietary Canadian Cannabis Company Index (MCCCI) increased 11.8% compared to the prior week when it decreased 2.8%. The index consists of 15 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 were 2 stocks that increased by more than 10%, which is my metric for inclusion in this category: TLRY +36.1% and CGC +20.1% On 7/26/23  Tilray Brands, Inc. reported record-breaking Q4 financial results, with improved financial performance, free cash flow, and positive adjusted EBITDA. Canopy Growth Corporation is subject to an intense bull/bear tug-of-war and option activity is elevated. I have advised my private clients to remain on the sidelines until 2024 Q1 earnings are announced on 8/9/23 as the current volatility is a red flag.
 

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 stock that decreased by 20% or more, which is my metric for inclusion in this category.
 

Valuation Metric Review

There was a 25.6% increase in the “Big Four” (all of which increased) compared to the prior week when it was unchanged. The sharp price spikes in TLRY and CGC is worthy of close attention going forward. Volume may be a clue here if these stocks continue their upward trend if there are more shares traded in the coming weeks
 

Recap

There was an 11.1% increase in the relative strength index compared to the prior week when it was unchanged. 7 of the 15 MCCCI stocks increased.

Let us see how this volatile sector has performed at the same time next week, shall we?

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