What happened

Shares of Charlotte's Web Holdings (OTC:CWBHF) were sinking 16.2% lower as of 2:51 p.m. EST on Thursday. The company didn't announce any news. Instead, the decline appears to be the result of a broader sell-off of cannabis stocks.

So what

If Charlotte's Web's business prospects had diminished, today's fall would be understandable. However, nothing has changed on that front.

Hemp CBD oil in a dropper over a bottle with a hemp plant in the background

Image source: Getty Images.

The general pullback in cannabis stocks today really has nothing to do with business fundamentals. Many traders are likely taking profits after a major run-up in recent days, fueled in part by Reddit users talking up pot stocks online.

There could also be some concern about Aurora Cannabis' earnings update, scheduled for after the market closes on Thursday. Poor results from Aurora could potentially weigh on other cannabis stocks -- even ones like Charlotte's Web that have little in common with the Canadian cannabis producer.

Now what

The smartest thing for investors to do is to ignore the noise with Charlotte's Web and focus solely on the company's long-term growth opportunities. Those opportunities will remain somewhat murky, though, until the U.S. Food and Drug Administration finalizes regulations related to CBD food supplements.

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.