Now is not the time to invest in Tilray, former NYSE President Tom Farley told CNBC on Thursday.
"Your viewers should not trade Tilray if they are concerned about losing all their money. If they have some leftover money in their budget ... go ahead, but this is not an investment at this point, it's a mania," Farley said on "Power Lunch."
Canadian medical marijuana supplier Tilray has had a wild few days. The stock rose as much as 14 percent at one point Thursday, only to give up that gain and go negative. It was last down 15.7 percent. On Wednesday, Tilray gave up a 90 percent one-day surge and turned negative, before ending the day up 38 percent — its best day since going public in July. The moves followed Tilray's Tuesday announcement that the U.S. Drug Enforcement Administration approved its efforts to export a cannabinoid study drug into the United States from Canada for a clinical trial.
Farley, who is also a CNBC contributor, described Tilray's wild moves as akin to a "video game," but said Tilray and its fellow marijuana stocks wouldn't be so volatile if there were just more of them listed.
"It's actually really unfortunate – one of the reasons why Tilray and Canopy are trading so crazy is they're the only two stocks listed here in the U.S. Some investors are restricted by their charter to only invest and trade U.S. stocks. I wish there were more marijuana stocks listed in the U.S.," he said. Canopy Growth is a leading medical marijuana company in Canada, which listed on the NYSE earlier in 2018.
Farley, who was NYSE president from 2014 until he was succeeded by Stacey Cunningham in May, said he was supportive of approving more marijuana companies for trading on the NYSE, but had to rethink his approach when U.S. Attorney General Jeff Sessions, who as Farley said is "very against marijuana," took office and made his feelings known.
"I was very high on that idea, and when Attorney General [Eric] Holder was in office, I was willing at the NYSE to approve those marijuana-based stocks," Farley said. "The one that I said yes to, when I was there at the NYSE, was Canopy, because all of their operations are in Canada, so they don't violate a federal law here in the United States."
Companies that want to list on the NYSE are required to be fully legal and compliant in the countries in which they operate. Both Canopy and Tilray fit that criteria. If either of them were to pick up operations in the U.S., Farley said he guarantees "the Nasdaq would have a tough conversation with [Tilray], or the NYSE would have a tough conversation with Canopy."
"In Canada, they have a whole lot of marijuana stocks that are listed there that wish they could be listed in America, and I wish they could be listed here in America," Farley added.
Despite those sentiments, Farley said it's best for investors to steer clear of Tilray right now, until the volatility eases or more marijuana companies pick up trading on major U.S. exchanges.
"The high of today, does that stand for a long time? It's my hunch that it does," Worth said. "Pot stocks in general, it's a long run. We have talked about that, this is just the beginning. But this particular stock on this particular day has all the indications of a key reversal, a bad close."
Tilray was last trading down 15.7 percent at $180.46 per share, after hitting an all-time, intraday high of $300 on Wednesday. The stock has skyrocketed more than 680 percent since it began trading on the Nasdaq at $23.05 per share in July.
Tilray did not immediately respond to CNBC's request for comment.