TM editors' note: This article discusses a penny stock and/or microcap. Such stocks are easily manipulated; do your own careful due diligence. 

MACRO

For the trading week ended 5/29/20 my Canadian Cannabis Company Index (MCCCI) was basically unchanged compared to the prior week’s increase of 25.6 % 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 industry as a whole. The 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 industry. As I’ve said here before, I believe there will be a pronounced reset in this sector, likely in Q3 or Q4 of this year. including but not limited to business failures, consolidation, and a significant downtrend in valuation. The survivors will be those companies that can operate profitably when the equilibrium price is established by the supply/demand dynamics. Let’s take a look at this week’s good, bad and ugly stocks.

MICRO

The following 3 stocks increased more than 10%, which is my threshold for this category: TerrAscend Corp. (TRSSF) +14.7% Emerald Health Therapeutics, Inc. (EMHTF) +12.5% The Supreme Cannabis Company, Inc. (SPRWF) +10.1% Here is a link to company news regarding TRSSF on 5/29/20. Last week’s trading in the stock was 2 ½ times the 90-day average daily volume likely due to a $37M private placement, which was oversubscribed. I’m impressed by the company’s ability to attract capital in these trying times. And I intend to closely monitor TRSSF going forward.

THE BAD

The following 2 stocks decreased by more than 10%, which is my threshold for this category: 48North Cannabis Corp. (NCNNF) -10.9% Aleafia Health Inc. (ALEAF) - 10.2% In my view NCNNF is running out of time to execute its business plan, given that it has a paltry market cap of $28.3M and challenged financials.

THE UGLY

WeedMD Inc.(which had gained more than 50% last week) was the worst performer of the week, as the stock was down 17.5%. During the week, WDDMF announced that it had given a 45-day extension until July 15, 2020, to file their financial statements due primarily to the impact of the coronavirus (COVID-19) pandemic.

RECAP

The overall index decreased by 9.3 % compared to last week’s historic increase of 37.3%. This underscores how the Canadian cannabis market is defined by wide swings which I fully expect will continue going forward. Let’s see how this volatile sector has performed at the same time next week shall we?