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Mike Novogratz: Cannabis stocks today are like cryptocurrencies in Dec. 2017

Former hedge fund manager Mike Novogratz has reinvented himself as an authority on cryptocurrencies. In the past year, cryptocurrencies surged to stratospheric levels in December 2017 before crashing. But Novogratz, the founder of Galaxy Digital, still sees a bright future for the asset class.

Furthermore, Novogratz sees parallels in the recent mania surrounding cannabis stocks.

“I think the cannabis business is going to grow and it’s going to grow relatively rapidly,” he said at Yahoo Finance’s All Markets Summit. “I think the prices feel like Bitcoin and Ethereum did in December of last year.”

The weed stock frenzy has been led by Tilray (TLRY), a Canadian cannabis company with a stock that surged more than 700% since being priced at $17 during its July IPO. On Wednesday it went boom and then bust.

Tilray boomed and busted in just one week.

If cannabis stocks follow the path of cryptocurrencies, then they could go a lot lower before recovering.

“If I was long them, I’d sell them,” Novogratz said. “If you’re a speculator, I’d get short them.”

Novogratz actually noted that he was able to find “a cool way to short Tilray,” but he didn’t share any more details.

The price of bitcoin (BTC-USD) peaked on December 19, 2017 at $19.140.70. It’s currently trading at around $6,400.

Julia La Roche is a finance reporter at Yahoo Finance. Follow her on Twitter. Send tips to laroche@oath.com.