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) was virtually unchanged compared to the prior week when it decreased by a de minimis 1.2%. 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. Now that Q4 is more than ½ over, it appears a trend of a “return to normalcy” is developing, although unforeseen events could affect the sector. Now let us look at this week’s good, bad, and ugly stocks.

THE GOOD

There were stocks that increased by more than 10%, which is my metric for inclusion in this category.

THE BAD

There were 2 stocks that decreased by more than 10% (but less than 20%) which is my metric for inclusion in this category: CBWTF -14.6% and NEPT -10.3%. Auxly Cannabis Group Inc. is the consummate chameleon stock as evidenced by the company being called a “ hot marijuana stock ” on 11/14/20. I pointed out in last week’s report that CBWTF had risen 41.4% and 30.0% prior to the stock cooling off for the trading week ended 11/20/20. Neptune Wellness Solutions Inc. may very well be a bounce-back candidate this week based on very positive news of 11/17/20 that the company has secured $100M in new purchase orders.

THE UGLY

There were 2 stocks that decreased by 20% or more, which is my metric for inclusion in this category: BHHKF -35.9% and MEDIF -27.6%. I am not optimistic about either of these stocks going forward.

VALUATION METRIC REVIEW

There was virtually no change in the “Big Four” for the 2nd week in a row. I consider this statistical aberration more evidence of the “reversion to the mean” which I have referred to here in the past.

RECAP

The relative strength index decreased by 8.4% compared to last week when it decreased by 6.9%. 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 volatile sector has performed at the same time next week shall we?