Image by Herbal Hemp from Pixabay

For the trading week ended February 4, 2022, there was an increase of 6.5% in my proprietary Canadian Cannabis Company Index (MCCCI) compared to the prior week when there was a decrease of 0.09%. 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.

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. Now let us look at this week’s good, bad, and ugly stocks.

The Good

There were 6 stocks that increased by more than 10% which is my metric for inclusion in this category: HEXO +25.8%, ROMJF +20.4%, RDDTF +20.2%, TGODF +18.1%, TRSSF +13.6% and FLWPF +10.7%. The spike in HEXO is quizzical to me, especially since the company received a non-compliance letter from Nasdaq after last week’s report and in my view faces a tenuous future.

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 an increase of 7.9% in the “Big Four” compared to the prior week when there was a decrease of 0.07%. I find it interesting that although all of the “Big Four” increased, none of them achieved “good” status.

Recap

Only 1 of the 22 stocks in the portfolio decreased, which was a complete reversal from the prior week and an indicator of sector volatility. There was an increase of 8.0% in the relative strength index compared to the prior week when there was a decrease of 11.9%. In summary, last week’s performance was notable, but I believe that it is premature to speculate about how the MCCCI will fare going forward. Let us see how this volatile sector has performed at the same time next week shall we?