Newstrike Resources Ltd (CVE:HIP) (OTCMKTS:NWKRF) (FRA:0N8), Aurora Cannabis Inc (TSE:ACB) has been the second biggest percentage gainer off the February 28 lows. We recently wrote about the huge aggregate short position increase from 3,563,600 shares to 51,576,069 (1,347.30%) following decision to hitch their wagon with CanniMed Therapeutics Inc. instead. Judging by the relentless nature of the bid, it would appear that significant short covering is taking place.

In a continued flurry of momentum, Canadian cannabis stocks continued their surge off ‘capitulation’ lows on Monday. The Canadian Marijuana Index (CMI) —a basket of 24 of the biggest cannabis company in Canada—rose 7.07%, finishing at 757.07. The close was the highest in three weeks and erased most of a February swoon which saw the CMI drop 19.44%.

Rounding out the Top 3 winner’s category is MYM Nutraceuticals Inc., which has risen 41.41% over the past four sessions. The company has carried momentum stemming from approval to begin construction on a 1.5 million sq.ft. greenhouse at its Weedon QC production facility. The Weedon facility is scheduled to be completed by the end of 2020, and is capable of producing an estimated 150,000 kgs of cannabis at full capacity.

Canadian Marijuana Index – 24 Index Constituents

Name Symbol Feb 27 (close) March 5 % Chg Market Cap WeedMD Inc. CVE:WMD 1.91 2.11 10.47% 204.53m Canopy Growth Corporation TSE:WEED 26.45 32.37 23.32% 6.42b CannTrust Holdings Inc. CNX:TRST 8.05 9.00 11.80% 825.70m The Hydropothecary Corporation CVE:THCX 3.38 3.88 14.79% 693.90m THC Biomed Intl Ltd CNX:THC 1.26 1.41 11.90% 160.09m OrganiGram Holdings Inc CVE:OGI 3.76 4.32 14.89% 538.16m Namaste Technologies Inc CNX:N 1.60 1.77 10.62% 428.08m MYM Nutraceuticals Inc CNX:MYM 1.98 2.80 41.41% 298.10m Cronos Group Inc. CVE:MJN 9.67 12.65 30.81% 1.94b Maricann Group Inc. CNX:MARI 2.49 2.36 -5.22 218.03m MedReleaf Corp. CVE:LEAF 18.74 20.50 9.39% 2.05b InMed Pharmaceuticals Inc IN:CNX 0.80 1.47 83.74% 197.40m Invictus MD Strategies Corp CVE:IMH 1.77 1.96 10.73% 157.13m Harvest One Cannabis Inc. CVE:HVT 0.99 1.20 21.21% 178.73m Newstrike Resources Ltd. CVE:HIP 0.76 1.12 47.36% 540.12m The Supreme Cannabis Company Inc. CVE:FIRE 1.76 2.00 13.63 499.79m Emerald Health Therapeutics Inc. CVE:EMH 4.53 5.94 31.12% 696.42m Emblem Corp CVE:ENC 1.43 1.57 9.79% 164.21m CanniMed Therapeutics Inc. CVE:CMED 33.59 38.00 13.12% 940.75m Cannabis Wheaton Income Corp. CVE:CBW 1.40 1.70 21.42% 668.54m Cannabix Technologies Inc CNX:BLO 2.08 2.26 8.65% 195.41m Aphria Inc. CVE:APH 12.50 14.28 14.24% 2.33b Aurora Cannabis Inc. CVE:ACB 9.89 11.26 13.85% 5.52b Abcann Global Corporation CVE:ACN 1.74 2.23 28.16% 387.35m

Another notable performer is Canopy Growth Corp. (TSE:WEED) (OTCMKTS:TWMJF). Shares have skyrocketed in the days surrounding Bruce Linton’s March 1 announcement that the company is looking into the possibility of dual-listing on the Tier-1 NASDAQ stock exchange. Many have interpreted this to mean a NASDAQ listing could happen soon, since Canopy Growth has already engaged the exchange about listing in October 2017.

Given its strong price action recently, it’s likely Canopy Growth is experiencing its own “Cronos effect” (before listing day arrives). It wouldn’t be the first time investors tried front-running a similar trade which just yielded tremendous returns. Canopy Growth has had a quiet news cycle since mid-February, so the price action isn’t press release driven.

Technically speaking, the key number to watch on the CMI is 784.85. That is the closing high (February 6) of the current trading range. A close above this level would confirm the larger downward correction in cannabis stocks is broken. Invest accordingly.