Gundlach: The cannabis boom looks like a ‘mania’

After a red-hot 2018, cannabis stocks are on fire again to start the year.

Canadian cannabis company Canopy Growth (CGC), for example, is up nearly 60% through February, as shares of its competitor Aurora Cannabis (ACB) have posted gains of 35% over the same stretch.

The moves higher in such a short time period have some investors issuing caution, including “Bond King” DoubleLine Capital CEO and founder Jeffrey Gundlach, who warned investors about the cannabis “mania” in an exclusive interview with Yahoo Finance on Feb. 13. DoubleLine oversees $121 billion in assets.

“The cannabis thing does seem like a mania,” Gundlach said. “I’ve got young guys working for me that are big believers in the cannabis thing, and they claim that it’s all about getting shelf space and branding and getting bought out by another big company… But I don’t know.”

Canopy Growth, the largest cannabis company by market cap, reported earnings Thursday and posted a 282% jump in net revenue in its latest quarter. Still, however, Gundlach expressed concern that cannabis companies could be overvalued.

“People make a lot of money in some parts of it, but that’s just not for me. I’ve no interest in mania stuff,” Gundlach said. “I don’t understand why just because it used to be illegal, that somehow it’s got this special magic to it.”