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"Whenever you see this kind of boom, you need to take the more exuberant pronouncements with a grain of salt," CNBC's Jim Cramer says.
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"I think we're witnessing a pretty straightforward problem. I wanna call it reefer madness," the "Mad Money" host says.
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"In Tilray's case, there haven't been any major negative catalysts. It's just the stock should never been so high in the first place," he says.
Wall Street has seen what happens when "irrational exuberance" comes back down to reality in the long-awaited Uber UBER and other companies that have come public this year, CNBC's Jim Cramer said.
The cannabis cohort is another group that has had a similar result as American states gradually legalize the drug and taboo dies down.
"Whenever you see this kind of boom, you need to take the more exuberant pronouncements with a grain of salt," the "Mad Money" host said. "I think we're witnessing a pretty straightforward problem. I wanna call it reefer madness."
While some stocks of marijuana companies have performed much better than others, such as Cramer's favorite cannabis pick Canopy CGC , many have been "too promotional for my taste," he said.
Looking at Tilray TLRY , Cramer noted that its stock shot u from $100 to about $300 within a matter of days last October prior to legalization in Canada. The stock collapsed to $100 a month later, and has since drifted below $50.
"In Tilray's case, there haven't been any major negative catalysts," he said. "It's just the stock should never been so high in the first place."
Get Cramer's full insight on cannabis picks here
Winners and losers
President Donald Trump has practically "blacklisted" Chinese telecommunications giant Huawei and made it crystal clear that he does not want American companies doing business with the country, Cramer said.
That tanked the shares of a group of chipmakers — Qualcomm QCOM , Skyworks Solutions SWKS , Broadcom AVGO , Micron MU , and Xilinx XLNX — as much as 7.3%, he argued.
"Huawei has the best technology for the 5G wireless infrastructure build-out, but without components from American suppliers, that technology just doesn't work. They're gonna get beat," the host said. "It could be the end for Huawei's 5G leadership. That's a huge blow to this pioneering company that many in the industry actually feel is nothing but an arm of the [Chinese] Communist Party."
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