Regulatory mood-congruence and herding: evidence from cannabis stocks

Panagiotis Andrikopoulos, Bartosz Gebka, Vasileios Kallinterakis

Research output: Contribution to journalArticlepeer-review


Although social mood can motivate herding towards new industries, the extent to which regulators cater to social mood may affect that herding. We explore this issue in the context of the nascent cannabis industry by examining herding among the cannabis stocks listed in the US and Canada, where the regulatory treatment of cannabis varies in its congruence with the prevailing social mood on cannabis’ legalization. Canadian-listed cannabis stocks entail strong herding across all market states and sectors, alongside most capitalization-segments; conversely, herding among their US-listed counterparts is relatively limited, appearing on up-market/high-volume days, for the smallest capitalization segment, as well as for several cannabis-sectors. Herding is present (almost always absent) around cannabis’ legalization announcement-days in Canada (the US), while cross market herding between US- and Canadian-listed cannabis stocks is very weak. We attribute Canadian (US) cannabis stocks’ strong (weak) herding to cannabis’ more (less) mood-congruent regulatory treatment, which promotes (reduces) certainty and encourages investors to herd more (less) on them.
Original languageEnglish
Pages (from-to)(In-press)
JournalJournal of Economic Behavior & Organization
Early online date12 Nov 2020
Publication statusE-pub ahead of print - 12 Nov 2020

Bibliographical note

Publisher Copyright:
© 2020 Elsevier Ltd

Copyright 2020 Elsevier B.V., All rights reserved.


  • Cannabis industry
  • Herding
  • Mood
  • North America
  • Regulation

ASJC Scopus subject areas

  • Economics and Econometrics
  • Organizational Behavior and Human Resource Management

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