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The new mania is pot stocks. Valuations are beyond absurd, which is what always happens in bubbles. Investitute co-founder Jon Najarian says It's Stupid Time.

In June, Canada announced it will legalize recreational marijuana use effective Oct. 17, sparking a series of industry moves. Soon after Canadian marijuana producer Tilray filed for an initial public offering, which occurred in July.

In August, Molson Coors said it will partner with The Hydropothecary Corporation to develop cannabis-infused beverages for the Canadian market. Later that month beer maker Constellation Brands invested an additional $4 billionin Canadian-cannabis producer Canopy Growth.

Tilray shares are up more than 800 percent through Wednesday morning since its first day of trading after its July IPO and rose nearly 600 percent in the past month. The stock is also up nearly 50 percent Wednesday, a day after its CEO Brendan Kennedy told CNBC's Jim Cramer that pharmaceutical companies should partner with cannabis producers as a "hedge" against the space.

The company now has a market value of more than $20 billion with its stock price at $233, trading at nearly 500 times its 2018 estimated sales versus the S&P 500's 2.2 times sales, according to FactSet.

Tilray reported just $17.6 million in sales over the last two quarters with a net loss of $18 million in the same time period.

"This is just stupid time. I can't believe the valuations at this stage," Investitute co-founder Jon Najarian said in interview Wednesday.

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Bitcoin vs Pot

Another Wall Street trader compared the mania surrounding pot stocks this year to 2017's cryptocurrency market craze. For example, Riot Blockchain shares surged by more than 400 percent during the fourth-quarter last year.

"It reminds me of Bitcoin / Blockchain late in 2017 … There was a stock called RIOT who experienced explosive growth in its stock price simply because it was one of the few ways to invest in bitcoin publicly," Baird institutional sales trader Michael Antonelli said in an email Wednesday. "Humans are emotional creatures and nothing is worse than seeing your friend get rich in a pot stock, while you sit in an index fund. So I have little doubt that people are chasing the stock higher so they don't feel left behind."

Riot Blockchain shares are down more than 85 percent this year.

Pot Shot

From $17 to $280 and Tilray is losing money. Wow.

I certainly wish I took a crack at that pot shot.

Mike "Mish" Shedlock