- The crazy trading of Tilray should not be viewed as typical for investors in pot stocks, says Bruce Linton, CEO of rival Canopy Growth.
- Linton says Canopy shares on the New York Stock Exchange trade "relatively normal."
- However, a "relatively normal" trading pattern surrounding marijuana stocks is certainly in the eye of the beholder.
The crazy trading this week around Canadian pot stock Tilray should not be viewed as typical for investors who want to put money into the industry, Bruce Linton, CEO of rival Canopy Growth, told CNBC on Friday.
"I think it got technically weird," said Linton, referring to the wild swings in the U.S. shares of British Columbia-based Tilray.
Linton attributes the Tilray moves, in part, to the "very limited trade available in the total number of shares in the float."
There are about 76.5 million Tilray shares outstanding, but the float — those shares actually available for trading — is just 17.8 million, according to FactSet.
Shares of Tilray, which have been captivating Wall Street this week, had another roller-coaster ride Thursday, eventually closing down more than 17 percent, with a market value of about $13.5 billion.
Tilray opened 20 percent lower on Friday.
During the regular trading day Wednesday, the stock was halted five times by the Nasdaq, rising as much as 90 percent and briefly turning negative before closing up 38 percent.
"I suspect [Tilray trading] will return to normal. They're a nice business. They have a nice start," Linton said on "Squawk Box" on Friday.
Linton said shares of Ontario-based Canopy Growth, with 228.5 million shares outstanding and a float of about 201 million shares, trades "relatively normal."
However, a "relatively normal" trading pattern surrounding marijuana stocks is certainly in the eye of the beholder.
U.S. shares of Canopy, which traded for years on the OTC pink sheets, began trading on the New York Stock Exchange on May 24. Over the past 12 months, Canopy has gained nearly 500 percent — nearly 115 percent year to date alone.
In an up-and-down week, Canopy shares rose 11 percent as of Thursday's close, with a market value of nearly $12 billion. The stock was under pressure early Friday.
But Tilray, which priced its July initial public offering at $17 per share on the Nasdaq, has soared nearly 1,000 percent since its debut, as of Thursday's close.
Brendan Kennedy, CEO of Tilray, said on "Mad Money with Jim Cramer" on Tuesday the huge opportunity for marijuana companies is not just Canada's legalization of recreational use on Oct. 17.
"It's about all the countries that follow," Kennedy said.