For the trading week ended July 16, my proprietary Canadian Cannabis Company Index (MCCCI) decreased by 11.6% compared to the prior week when it decreased by 4.5%. The index consists of 23 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.

Image by Herbal Hemp from 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 9 stocks that decreased by more than 10% (but less than 20%) which is my metric for inclusion in this category: NEPT -27.1%, NCNNF -18.8%, ACB -14.5%, TLRY -14.0%, TRSSF -13.6%, VLNCF -12.4%, HEXO -12.4%, CGC -11.6%, and CRON -11.3%. The Valens Company Inc. and Hexo Corp. are repeaters from last week, and the latter is a stock which I have expressed my bearish views on several times here and written 2 articles about on SeekingAlpha.

The Ugly

There were no stocks that decreased by 20% or more, which is my metric for inclusion in this category.

Recap

There was a decrease of 12.9% in the “Big Four” compared to the prior week when there was a decrease of 4.3%. For the 6th consecutive week, they all traded in lock-step, which is growing evidence that the MCCI will experience price pressure going forward. Tilray, Inc. (TLRY) decreased by 14.0% which acquits my view regarding their merger with Aphria Inc. There was a decrease of 3.7% in the relative strength index compared to the prior week when there was a decrease of 4.4%. Bottom line is that I expect further froth in the sector, as geopolitical concerns loom large on the stock market. Let us see how this volatile sector has performed at the same time next week, shall we?