Curaleaf Holdings, Inc. operates as an integrated medical and wellness cannabis operator in the United States. It cultivates, processes, markets, and/or dispenses a range of cannabis products, such as vape oils and concentrates.
Yesterday, the United States Food and Drug Administration (FDA) issued a warning letter to Curaleaf for illegally selling cannabidiol (CBD) induced product online to treat various ailments such as cancer, Alzheimer’s disease, etc.
While the news shook the weak hands out, those who held on saw their return for that day only down 5% after being down 14%.
Seaport analyst Brett Hundley views the FDA letter as a “non-event” for the company and believes the stock sell-off is premature. The analyst reiterates a Buy rating on Curaleaf stock, with a price target of $11.00, which implies nearly 50% upside from current levels. Hundley commented, “We view any weakness in CURLF shares as near-term buying opportunities for investors.
An FDA warning letter also known as a FDA Form 483 is issued to manufacturers or other organizations that has violated some rule in a federally regulated activity. However, a Form 483 doesn’t mean the end of the world, just formalizes their observation in order for the manufacturer to address the issue(s) found, usually within 15 days.
So Brett Hundley might be right…the FDA letter being a “non-event.” However, the chart suggests to wait for price fall a bit more, to the daily demand at $5.75 before going long.
This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.
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