For the trading week ended August 13, my proprietary Canadian Cannabis Company Index (MCCCI) decreased by 3.6% compared to the prior week when it increased by 1.4%. The index consists of 23 stocks, many of which are among the most widely held holdings of the 3 ETFs (NY: 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.

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: VLNCF +21.7%. The Valens Company Inc. issued a press release on 8/13/21 regarding a deal with Verse to launch a cannabis-infused beverage which may bode well for the stock price going forward.

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: CRON -11.5%. I consider Cronus Group Inc. as a quixotic stock, and YTD the stock has decreased by 6.8%.

The Ugly

There were 1stock that decreased by 20% or more, which is my metric for inclusion in this category: NEPT -21.5%. Neptune Wellness Solutions Inc. reported earnings on 8/12/21which underwhelmed the market. It would not surprise me in the least if this company was taken over by the end of 2021, which would require yet another rebalancing of the MCCCI.

Recap

There was a decrease of 7.5% in the “Big Four” compared to the prior week when there was an increase of 1.2%. I view this a red flag that absent some positive sector news, the MCCCI constituent stock are likely to languish. There was no change in the relative strength index for the 2nd week in a row. Let us see how this volatile sector has performed at the same time next week, shall we?