Battered shares of Curaleaf Holdings Inc. (CURA.CN)(CURA) represent a “strong buying opportunity” for investors, according to analysts at Beacon Securities.

The U.S. Food and Drug Administration (FDA) issued the largest U.S. cannabis company by revenue a warning letter on Tuesday over how it markets its CBD products.

The agency accused Curaleaf of making “unsubstantiated claims that the products treat cancer, Alzheimer’s disease, opioid withdrawal, pain and pet anxiety, among other conditions or diseases,” citing examples on the company’s website and social media channels.

Canadian Securities Exchange-listed shares fell as much as 14 per cent following the announcement, before closing seven per cent lower on Tuesday. The stock fell 2.15 per cent to $9.54 at 2:00 p.m. ET on Wednesday.

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“This represents a strong buying opportunity, as we believe the CBD product line currently represents less than one per cent of current company revenue,” Beacon Securities analyst Russell Stanley wrote in a research note on Wednesday.

He expects actions by Curaleaf to meet the FDA’s requirements will have minimal associated costs. The company was given a 15-day window to notify the health agency in writing of its steps to correct the violations.

“Curaleaf is committed to the highest standards of quality and compliance, and will work collaboratively with the FDA to resolve all issues addressed in the agency's letter,” Curaleaf wrote in a news release on Tuesday. “Compliance is a top priority for Curaleaf and the company is fully committed to complying with FDA requirements for all of the products that it markets.”

CEO Joe Lusardi has previously lashed out at the FDA. In a May interview with Yahoo Finance he called the regulator “out of step with the American public.”

Beacon’s Stanley remains positive on Curaleaf’s position as an industry leader, pointing to the company’s expansive U.S. retail footprint and share price discount to similarly-sized peers.

“CURA continues to dominate with 48 operating dispensaries. Pro forma the recently announced acquisition of Grassroots, the company would have 68 operating dispensaries, and licenses for 63 more, giving it a commanding lead of its peers,” he wrote.

Stanley maintains his “buy” rating and $25 price target on the stock.

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