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Why Shares of Cresco Labs Are Down This Week

By Bram Berkowitz – Sep 9, 2021 at 3:04PM

Key Points

  • The study examined more than 33,000 young adults and found that heart attacks were more frequent among cannabis users.

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Many cannabis stocks have declined after a new report showed there could be a link between cannabis use and heart attacks.

What happened

Shares of the medical marijuana company Cresco Labs (CRLBF -5.72%) 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.

Red stock chart arrow moving downward.

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.

Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Cresco Labs Inc. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Cresco Labs Inc. Stock Quote
Cresco Labs Inc.
$3.13 (-5.72%) $0.19

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