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For the trading week that ended March 8, 2024, my proprietary Canadian Cannabis Company Index (MCCCI) decreased 6.7% compared to the prior week when it decreased 3.5%. The index consists of 14 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?

The Good

There was 1 stock that increased by more than 10%, which is my metric for inclusion in this category: DLTNF +30.2%. Delta 9 Cannabis Inc. is a 4th quartile stock with a market capitalization of $ 4.2M and trades at $0.02, which means that it has a miniscule effect 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 was 1 stock that decreased by 20% or more, which is my metric for inclusion in this category: NEPT -54.2%. Neptune Wellness Solutions Inc. was a “good” stock in the prior week but on 3/6/24 the company reported that Nasdaq will delist the stock. This clearly will increased downward pressure on NEPT.

Valuation Metric Review

There was a 7.2% decrease in the “Big 4” (all of which decreased) compared to the prior week when there was a 4.5% decrease. I am bearish on this entire cohort but to me TerrAscend Corp (TSND) appears most vulnerable price-wise for the remainder of Q1. On a macro basis, all of the MCCCI stocks decreased, another bearish indicator.

Recap

There was no change in the relative strength index compared to the prior week when there also was no change. My current thesis for the Canadian cannabis sector is still a work in progress. Spoiler alert- expect a caveat emptor. More details will be announced at the end of Q1 trading. 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, March 4
The Canadian Cannabis Report - Monday, Feb. 26
The Canadian Cannabis Report - Monday, Feb. 19