Cresco Labs (CRLBF -4.14%) ranks as one of the top multi-state cannabis operators in the U.S. But its shares haven't performed well this year, falling more than 40% below the highs set in early 2021.

Is Cresco now a smart marijuana stock to buy or are investors better off staying away? We asked two Motley Fool contributors to give both the bullish and bearish perspectives on the stock. 

Cannabis plants growing under lights.

Image source: Getty Images.

Bull case: Cresco is a cannabis bargain

Keith Speights: Sure, Cresco's share price has fallen year to date. However, that's not a reflection on the company's underlying business strength whatsoever. Cresco's sales continue to rise with solid gross profit margins of 50% or more. 

The company operates in several of the biggest and most attractive cannabis markets in the country. Many of the states where Cresco does business present tremendous growth opportunities.

Cresco should keep increasing sales both organically and through acquisitions. The stock could also have other catalysts, notably including the potential for federal cannabis reform in the U.S.

Our Motley Fool colleague Eric Volkman views Cresco as "a low-risk marijuana stock." I agree -- primarily because of Cresco's valuation. The stock's price-to-sales ratio is one of the lowest in the industry. In my opinion, Cresco is a cannabis bargain that has great long-term prospects.

Bear case: Cresco might be biting off more than it can chew

Rich Duprey: I'll admit to liking the long-term potential of Cresco Labs, seeing it as a strategically positioned multistate operator (MSO) with a strong presence in some of the biggest marijuana markets. But let's temper the enthusiasm for its potential with the reality that there are a lot of moving parts right now for this pot stock.

In the third quarter alone, Cresco Labs acquired Blair Wellness, a Baltimore dispensary; Cultivate Licensing and BL Real Estate, a Massachusetts operator; and Cure Pennsylvania, a Keystone State retail outfit. Just last month it agreed to buy another Pennsylvania shop, the vertically integrated Laurel Harvest Labs, while earlier this year it bought Florida's Bluma Wellness and four Ohio dispensaries that were previously operated by Verdant Creations.

There's a good argument to be made for the land grab Cresco Labs is undertaking, as staking claims in growth markets with limited marijuana licensing minimizes your competition. But it also means the MSO has a lot of plates it needs to keep spinning all at once.

It addition to buying up markets, Cresco is also in expansion mode. During the most recent quarter, for example, it began building out its cultivation and processing facility in Ohio, a five-year, $40 million project.

With a smart retail and wholesale operation producing record results, it all looks great, but growth by acquisition is a very difficult strategy to pull off. Often it causes the acquirer to stumble when investors least expect it as integrating different companies and cultures many times proves more challenging than originally believed. The allure of the rapid growth realized shields the underlying weaknesses in the fundamentals of a company's core businesses. 

That's not to say that's going to happen with Cresco, which thus far seems to have a pretty shrewd management team. However, buying growth is a lot easier than organically producing growth.

The key differentiator

The main difference between the bull case and bear case for Cresco Labs comes down to the company's ability to execute, especially with acquisitions. If the company can't tie its new businesses together well, all bets are off. 

On the other hand, Cresco is more attractively valued than nearly all of its peers. And most of them are aggressively expanding via acquisitions as well. If the company doesn't stumble from an execution standpoint, its stock could have plenty of room to run.