Cannabis Stock behavior and Investor’s Expectations on the TSX: A Mixed Method Approach

  • Oludamola Durodola School of Business, Lakeland College Lloydminster T9V 3N7, Canada
  • Deepika Chotee School of Business, Lakeland College Lloydminster T9V 3N7, Canada

Abstract

This study examines the behavior of cannabis stock on the Toronto Stock Exchange and why investors are interested in cannabis stock. The theory of heterogeneous beliefs, bounded rationality theory and the theory of addiction grounded the study. We employed basic descriptive statistics and the Kruskal-Wallis test including an in-depth interview of investors using convenience sampling methods. The study findings showed that cannabis stocks exhibit a higher-level of risk volatility when compared to speculative and growth stocks on the Toronto Stock Exchange within the period under investigation. The descriptive statistics result suggest potential diversification benefits between cannabis stocks and growth stocks as both stocks classifications are likely to respond to macroeconomic shocks differently. Other findings show that cannabis stocks share similar characteristics with other speculative stocks but also possess unique features. Finally, investors are interested in cannabis stocks because of its potential for future strong earnings on the platform of the theory of addiction as discussed in the study.
Keywords: Cannabis stock, Theory of heterogenous belief, Kruskal-wallis test, Toronto stock exchange, Bounded rationality.
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How to Cite
Durodola, O., & Chotee, D. (2019, July 8). Cannabis Stock behavior and Investor’s Expectations on the TSX: A Mixed Method Approach. International Journal of Applied Economics, Finance and Accounting, 4(2), 56-62. https://doi.org/https://doi.org/10.33094/8.2017.2019.42.56.62
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