In this segment from Motley Fool Money, host Chris Hill and senior analysts Jason Moser, Matt Argersinger, and Ron Gross consider the rapid ascent of pot producer Tilray (NASDAQ:TLRY), which was powered by the legalization of marijuana in its home market of Canada. (That new law is set to go into effect next month.)

Shares were below $23 just a couple of months ago. Now they are trading above $100, and there's enormous volatility involved as investors try to figure out how to price a speculative company operating in fairly uncharted territory. Regardless of where you stand on whether or not the U.S. federal government should or will fully legalize marijuana, the Fools are not ready to endorse Tilray or its peers as investments, and they explain why.

A full transcript follows the video.

This video was recorded on Sept. 21 , 2018.

Chris Hill: We begin this week with Tilray, the well-known Canadian cannabis company that I've never heard of until this week. It started the year with a market cap of around $2 billion. Jason, it's going to close this week with a market cap of just north of $12 billion. I'm used to seeing this kind of exponential rise with technology companies. What is going on with this cannabis stock?

Jason Moser: I'm not even used to seeing that kind of a rise with tech companies, at least not in the course of a week. I think that's what we're seeing, more or less. Coming from me, who supports legalization -- I am for it, OK -- you need to avoid this thing like plague. I mean, this is mania. That's the only real world I can offer that fits the mold in. I think a lot of it is based on speculation, perhaps, what will be one day here domestically with Tilray. It is a Canadian company. I think a lot of people are thinking that what is going on now with Canada will one day be that same way here. But this is just a wicked combination of speculation.

In Tilray's case, it's a very low float on the open market. Of the 93.1 million shares outstanding, only 19.1% of them trade on the open market. That means it's only about 17.8 million shares. Very low float means high volatility, which is what we're seeing. When I talk about high volatility, just go back to September 19th. The stock hit a high of $300 and a low of $151, all in the same day! On the 20th high of $244, low $158, all in the same day. That is not normal. We don't see that.

That's why we tell people with stuff like this, this business and the stock, it's not based on anything fundamental. That's why you have to steer clear of this thing. Wait until we have a better idea of how legalization is going to take form here domestically, before you start placing any crazy bets.

Matt Argersinger: Speaking of fundamentals, Chris, I think you mentioned a $12 billion market cap, if I heard correctly. Well, this company in the last 12 months did $28 million in revenue.

Ron Gross: That seems reasonable.

Argersinger: Even if the day it all becomes legal in Canada -- and, as Jason mentioned, maybe legalization here in the U.S. -- even if that revenue went up 10X in the next year, it would still be a ridiculous valuation. I think this ultimately is, just as Jason described it, a total mania. This is, for me, a buy the rumor, sell the news kind of thing. In other words, I think these companies are still going to be rallying. It's not just Tilray, you have companies like Canopy Growth, Aurora Cannabis. The day it goes legal in Canada, I feel like that's the day these stocks probably turn over.

Moser: Just ask yourself, what would be their competitive advantage? What they do is grow and distribute marijuana. I knew guys who did that in college, and they weren't running $13 billion businesses.