Amid wild volatility in marijuana stocks this week, former Goldman Sachs macro trader Michael Novogratz shorted Tilray — but says he still thinks the marijuana industry will make it.
"Listen, the weed business has a great underlying story, a lot like cryptocurrency. In five or six years, we will have a monster weed business," Novogratz said on CNBC's "Fast Money."
Shares of Canadian marijuana company Tilray fell sharply Friday, concluding a wild week that captivated investors. The stock closed 30.3 percent lower and has posted sharp moves all week. It was also the worst-performing stock in the ETFMG Alternative Harvest ETF (MJ), which fell 7 percent. Tilray shares posted a 10 percent gain on Monday, followed by surges of 29 percent and 38 percent on Tuesday and Wednesday, respectively.
The moves followed Tilray's announcement on Tuesday 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.
Novogratz said he couldn't help but to jump into the mix and short Tilray — a point he teased Thursday at the Yahoo Finance All Markets Summit.
"The Tilray move, I don't think I've ever seen a short squeeze and a frenzy like that ... the amount of volume and turnover on a low-float. And so, I was able to get a borrow, short it for a day trade, make some money," Novogratz said.
He said he's since covered his short and is out of the sector.
Novogratz said the marijuana industry has a promising future, but short-term, he said, it's all about short-selling.
"If that was my business, I would be short," he said.
Novogratz emphasized the Tilray short was a personal trade, separate from Galaxy Digital, the crypto merchant bank he launched in November 2017, a month before bitcoin hit its all-time high near $20,000. The firm took a $134 million hit in the first quarter of this year, according to its first-ever financial disclosure released in Canada after the company went public.
Novogratz is still bullish on bitcoin and cryptocurrency and predicts a rally by 2019.
"I do think bitcoin is going to be significantly higher by the end of the year," Novogratz said, adding he'd be disappointed if it didn't hit $6,800 or $8,800 by the end of the year.
Back in November 2017, the former Fortress hedge-fund manager told CNBC that bitcoin could "easily" hit $40,000 by the end of 2018. He also predicted ethereum, which was trading near $211 this week, could hit roughly $1,500.
Those two cryptocurrencies have gone in the opposite direction. Bitcoin is down more than 50 percent this year after starting 2018 above $14,000. Ethereum has dropped 83 percent from its high in January, according to CoinDesk.