What happened
Shares of the medical marijuana company Cresco Labs (OTC:CRLBF) had fallen roughly 12% this week, as of 2:35 p.m. EDT, for no obvious reason other than negative sentiment in the broader sector.
So what
The main reason marijuana stocks seem to be struggling has to do with a recent report from the Canadian Medical Association Journal that found a link between the use of marijuana and heart attacks.
The study looked at more than 33,000 young adults, ages 18-44, and found that a history of heart attacks was more frequent among cannabis users.
Robert Page, chairman of the American Heart Association, also issued a statement recently that said that cannabis can also interact with many cardiovascular medications such as blood thinners.
Image source: Getty Images.
Now what
Cresco recently completed the acquisition of Cultivate, a Massachusetts cannabis cultivator, and not too long ago reported earnings results for the second quarter that handily beat estimates from analysts.
While this recent news from the Canadian Medical Association Journal is certainly alarming and should make users think about whether using marijuana is appropriate with their specific health conditions, I do find it unlikely that the study will significantly curb marijuana use long term. This leads me to believe that if you like the company’s fundamentals, then this could be an opportune time to buy the stock.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.
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