The Canadian Cannabis Report- Monday, April 19 For the trading week ended April 16, my proprietary Canadian Cannabis Company Index (MCCCI) decreased by 5.9% compared to the prior week when it decreased by 9.4%. 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. MCCCIs 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 Source: Pixabay

The Good

There were no stocks that increased by more than 10%, which is my metric for inclusion in this category.

The Bad

There were 7 stocks that decreased by more than 10% (but less than 20%) which is my metric for inclusion in this category: NCNNF -18,6%, OGI -17.4% NEPT -16.1%, HEXO -14.6%, APHA -13.1%, ACB -11.6% and ALEAF -10.8%. Organigram Holdings Inc. and Aphria Inc. are repeaters from last week. OGIs price target was cut 4/16/21 and APHA shareholders approved the merger with Tilray, Inc.(TLRY) on 4/15/21. I recently sent a 2nd alert to my private clients regarding my concerns regarding how these 2 top quintile stocks may trade on a short-term basis.

The Ugly

There was one stock that decreased by 20% or more, which is my metric for inclusion in this category: ZBISF decreased by 20.0%. There was a 5.5% decrease in the “Big Four” compared to last week when there was an 8.2% decrease.

Recap

There was a decrease of 8.5% in the relative strength index compared to last week when there was an increase of 8.5%. I believe that this literal 180-degree turn is a cautionary tale regarding the sector going forward. I believe that there will be further consolidation in the MCCCI, and I have drilled down on the constituents and admittedly it is a dice roll but perhaps Rubicon Organics Inc. (ROMJF), which has a market capitalization of $140M may appeal to a larger MSO for reasons which I’ve shared with my subscribers. Let us see how this volatile sector has performed at the same time next week shall we?