Wall Street has seen what happens when "irrational exuberance" comes back down to reality in the long-awaited Uber and other companies that have come public this year, CNBC's Jim Cramer said.

The cannabis cohort is another group that has had a similar result as American states gradually legalize the drug and taboo dies down.

"Whenever you see this kind of boom, you need to take the more exuberant pronouncements with a grain of salt," the "Mad Money" host said. "I think we're witnessing a pretty straightforward problem. I wanna call it reefer madness."

While some stocks of marijuana companies have performed much better than others, such as Cramer's favorite cannabis pick Canopy, many have been "too promotional for my taste," he said.

Looking at Tilray, Cramer noted that its stock shot u from $100 to about $300 within a matter of days last October prior to legalization in Canada. The stock collapsed to $100 a month later, and has since drifted below $50.

"In Tilray's case, there haven't been any major negative catalysts," he said. "It's just the stock should never been so high in the first place."

Get Cramer's full insight on cannabis picks here