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Curaleaf Holdings (CSE:CURA) (OTCQX:CURLF) is one of the bigger marijuana stocks in the medical marijuana industry. Recently, this pot stock had a slight setback after it received a warning letter from the United States Food and Drug Administration about its CBD products. The FDA warning letter confronted the company for claiming that their CBD products could treat serious health conditions. The news was not well received by the market and Curaleaf shares dropped by as much as 9% once the news broke. The contents of the letter are explosive and could have an adverse impact on the company.

In its letter, the FDA stated that the company is “illegally selling unapproved products containing cannabidiol (CBD) online with unsubstantiated claims that the products treat cancer, Alzheimer’s disease, opioid withdrawal, pain, and pet anxiety, among other conditions or diseases.”

Focusing on This Marijuana Stock

These are serious issues and one that could have a big impact on the company’s business model. More importantly, the FDA has also stated in the letter that if the company fails to correct these violations, the agency would be left with no option but injunction and seizure of the products in question.

Since 2018, regulations pertaining to CBD products have been under the FDA’s scope. The agency has stated that certain products can be infused with CBD. However, the manufacturers should not make any claims regarding its effects on serious health conditions. Curaleaf confirmed that it had received the letter and added that the company is going to fully co-operate with the FDA regarding this matter. However, a company spokesperson also added that no concerns have been raised regarding the safety of CBD products manufactured by Curaleaf.

.This past week has been an eventful one in the marijuana industry, with many marijuana stock companies announcing their earnings and new deals. However, the bigger news from that period came from the marijuana stock Curaleaf Holdings (CSE:CURA) (OTCQX:CURLF). The company announced that it had reached an agreement to acquire Grassroots, the multi-state cannabis producer in a deal worth $875 million. This deal caused a spike in trading for this marijuana stock to watch.

What About This Marijuana Producer

Grassroots is a large operation in its own right. The company has a total of 17 cultivation and processing sites. The company also has 20 dispensaries and a total of 61 licenses for stores. Once the deal is completed, this pot stock will have a presence in 19 states and will also manage to have a presence in key states like Michigan and Illinois. Currently, Curaleaf’s operations are focused in East and West coasts. Amidst all this optimism, Brett Hundley, an analyst at Seaport has also stated that the deal could prove to be a major boost for the marijuana stocks and gave the stock a buy rating.

A Cannabis Stock To Watch

One of the most important things regarding this deal is that it gives Curaleaf a smooth area into Illinois. The state is potentially a highly lucrative one but it is tough to get licenses. If permitted it could allow Curaleaf to grow into a major force in the state quickly. In fact, due to the barriers to entry, the company might not have to handle a lot of competition either. Additionally, the pending acquisition of Cura Partners for $949 million will also give Curaleaf control of the well known CBD brand Select and with the addition of Grassroots, the future could be quite bright for the company.