For the trading week that ended September 2, my proprietary Canadian Cannabis Company Index (MCCCI) decreased by 8.8% compared to the prior week when it increased by 2.5%. 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: NXTTF +125.0%. Lifeist Wellness Inc. is a 3rd quartile MCCCI stock that has not issued news of any sort so this uptick is a complete mystery to me.

The Bad

There were 3 stocks that decreased by more than 10% (but less than 20%) which is my metric for inclusion in this category: NEPT -16.7%, TLRY -14.1%, and ROMJF -13.0%. Neptune Wellness Solutions Inc. was a “good” stock last week and may continue to fluctuate going forward.

The Ugly

There were 3 stocks that decreased by 20% or more, which is my metric for inclusion in this category: FLWPF -33.3%, TGODF -28.6%, and CBWTF -20.0%. Auxly Cannabis Group Inc. has the dubious distinction of being an “ugly” stock for 2 consecutive weeks and has been on a downtrend since Q1. Enough said again.

Valuation Metric Review

There was a decrease of 8.2% in the “Big Four” (all of which decreased) compared to the prior week when there was an increase of 2.5%. Tilray Inc. has been added to my watch list.

Recap

3 of the 22 stocks in the MCCCI increased. There was a decrease of 10.4% in the relative strength index compared to the prior week when there was a decrease of 8.3%. In my view, the sector may be approaching a tipping point to the downside based on the week metrics of the MCCCI. Let us see how this volatile sector has performed at the same time next week, shall we?

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