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Editors' note: This article discusses one or more penny stocks and/or microcaps. Such stocks are easily manipulated; do your own careful due diligence.

For the trading week ended November 20, my (proprietary) Canadian Cannabis Company Index (MCCCI) skyrocketed 23.2% compared to the prior week when it was virtually unchanged. 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 Canadian cannabis sector. The 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. As I have said here before, I also 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. My mid-year report showed that the MCCCI had decreased by 36% YTD, which may be a guidepost for the rest of 2020. The survivors will be those companies that can operate profitably when the equilibrium price is established by the supply/demand dynamics. The “return to normalcy” I referenced last week was admittedly derailed this week. But since 1 data point does not make a trend, I am maintaining my long-term view regarding the sector. Now let us look at this week’s good, bad, and ugly stocks.

THE GOOD

There were 9 stocks that increased by more than 10%, which is my metric for inclusion in this category: ACB +46.8%, TGODF +27.6%, EMHTF +27.3%, APHA +26.1%, TRSSF +25.9%, CGC +22.3%, HEXO +20.5%, OGI 18.7% and CRON +17.3%. I believe that Aurora Cannabis Group’s significant rise may very well lure more short-term traders to this stock and I have advised my private clients accordingly. Source: seekingalpha.com

THE BAD

There was 1 stock that decreased by more than 10% (but less than 20%) which is my metric for inclusion in this category: CBWTF -13.5%. Auxly Cannabis Group Inc., which I characterized last week as “the consummate chameleon stock” upheld its reputation by its record-setting 4th consecutive appearance as either a good bad or ugly stock list. On 11/24/20 the company announced a $12M upsized bought-deal offering. How this news may affect CBWTFs stock price going forward is a coin toss.

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 23.9% increase in the “Big Four” compared to virtually no change for the prior 2 weeks. In addition, the 10 highest capitalization MCCCI portfolio stocks all traded upward.

RECAP

The relative strength index increased by 29.9% compared to last week when it decreased by 8.4%. I believe that Q4 results thus far further support my 2020 thesis regarding the MCCCI as a microscope of the Canadian cannabis sector. Let us see how this increasingly volatile sector has performed at the same time next week shall we?