As pot stock Tilray (TLRY) traded wildly on Wednesday, September 19, prominent investor Whitney Tilson was teaching a seminar on just that sort of stock movement.

On Tuesday, Tilray gained approval from the U.S. Drug Enforcement Administration to import medical cannabis into the U.S. for testing purposes and the company’s CEO said that the investment in cannabis companies “is a global opportunity.” Tilray opened Wednesday with shares higher by 50.7% and other traders scrambled to get in fast before shares were halted for trade five times within an hour. TLRY finished Wednesday’s session up 38% at $214.06 per share — after seeing intraday gains of more than 90%. Shares fell from there, with the stock closing Monday at $99.50 per share after ending the day down 19%.

Tilson, founder of educational platform Kase Learning and hedge fund Kase Capital (which shut down last year), said the hype around Canadian Marijuana producer Tilray was an example of the dangers of short selling certain stocks — even if you’re very confident in the bet.

“My advice to my students is: Just learn from it,” Tilson said on the Final Round. “Look at it. And by the way, learn the dangers of short selling. Because it was only a few weeks ago the stock was at $50, and it was trading at 150 times revenues or whatever the number was, and it looked like a great short. And those shorts have gotten obliterated. So it’s very dangerous shorting popular stocks in hot sectors with thin floats with a high short interest.”

The renowned short seller added: “This will be a case study I will teach for years on the dangers of things to avoid on the short side.”

Short-seller Whitney Tilson talks weed stocks on the Final Round. (Photo: screenshot/Yahoo Finance)Tilson added that his advice was to avoid stocks like Tilray altogether. But he added that if someone is to short such a popular stock, they should wait until most of the crowd is moving on from the fad.

“The best time to short this is when it’s down 50%, 60%, 80%. Because this stock is going down 90%, I guarantee you, a year from now,” Tilson said. “There’s a lot of room to short it on the downside. You don’t want to try and be a hero and top ticket.”

Tilray stock is down about 67% since Wednesday’s high.

Emily McCormick contributed to this post.

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