The mania and then share-price descent in marijuana stocks reminds market pro Tom Lee of two other big crashes, in 2018 and the early 2000s.
The Fundstrat Global Advisors managing partner told CNBC on Monday that the cannabis sector's performance appears similar to the bitcoin craze and the height of the dot-com bubble at the turn of the century.
Lee didn't go so far as to say that a bubble was bursting in the marijuana sector. But he said the industry reminds him of some of the early internet business models, which he described as a sort of "profitless prosperity."
"There might be a growing demand, but until someone can really capture value properly, it's going to be tough to be creating something that generates sustainable return and equity," Lee told "Closing Bell."
Some analysts have pointed out for a while that the pot industry was reminiscent of bitcoin's run, beginning in 2017.
Like the marijuana sector, cryptocurrency became a huge phenomenon and sparked excitement among investors. Bitcoin skyrocketed from about $3,600 per coin in 2017 to more than $19,000 in December of that year. Throughout 2018, bitcoin plunged, and it closed the year at around $4,000. Bitcoin currently has a market value of a little more than $130 billion.
After the bitcoin craze fizzled, some investors believed cannabis stocks were the next big growth area.
But the pot sector has struggled amid the slow rollout of retail stores in Canada as well as uncertainties related to regulations in the United States.
Shares of the largest marijuana companies soared in 2018 but are all poised to end this year down sharply. Canopy Growth, the world's largest publicly traded cannabis company by market value, has plunged 64% from its all-time highs and is down around 26% for 2019. Tilray is down more than 75% this year, while Aurora Cannabis is nearly 60% lower.
The industry hopes the recent introduction of Cannabis 2.0, marijuana derivatives including edibles and beverages, will create excitement and generate sales.
— CNBC's Matthew Belvedere contributed to this report.