E The Canadian Cannabis Report - Monday, January 11

For the trading week ended January 8, my (proprietary) Canadian Cannabis Company Index (MCCCI) increased by an eye-popping 23.1% compared to the prior week when it decreased by 5.3%. 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. 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.

My 2020 report (published here on TalkMarkets) showed that the MCCCI had decreased by 21%, so 2021 is off to quite the reversal of form, and then some. Now let us look at this week’s good, bad and ugly stocks. 

person holding white flower during sunset

Image Source: Unsplash

The Good

There were 15 stocks that increased by more than 10%, which is my metric for inclusion in this category: CBWTF +44.2%, CBWTF +35.1%, ZBISF +33.3%, HEXO +29.9%, ALEAF +27.9%, VLNCF +27.7%, CRON +26.7%, VVCIF +26.5%, TGODF +24.7%, CGC +24.2%, APHA +23.7%, NXTTF +23.5%, NEPT +23.3% ACB +22.2%, WDDMF +19.5% and SPRWF +18.0%.

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 were no stocks that decreased by 20% or more, which is my metric for inclusion in this category. Valuation Metric Review There was a 24.4% increase in the “Big Four” compared to the prior week when it decreased by 5.7%.

Recap

The relative strength index increased by 24.7% compared to the prior week when it increased by a negligible ~1%. So how do I extrapolate the outstanding results of all 3 relevant metrics this week as a proxy for 2021? I am simply not ready to do that just quite yet, as 1 data point does not make a trend. That said, with 2020 in the rear-view mirror, perhaps it may be a happy new year for the Canadian cannabis sector after all. Let us see how this increasingly volatile sector has performed at the same time next week shall we?

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