Last month Canaccord Genuity initiated coverage on Charlotte’s Web with a target price of C$21.00 with a BUY rating, calling the stock an “attractive buying opportunity.”

Canaccord is forecasting a CAGR of 91 percent over the next three years (EBITDA of $28 million, $59 million and $99 million in 2018, 2019 and 2020, respectively). The projection is that Charlotte’s Web Holdings will outperform the industry average growth rate. Canaccord cites the company’s strong brand positioning, vertical integration and retail presence among other assets that make it attractive to investors. Here are their key investment highlights.

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In August, the company completed an IPO. The aggregate gross proceeds of the offering totaled around CAD$100 million. Canaccord Genuity Corp. served as the lead underwriter offering the shares.

The CBD market continues to grow

The CBD market is a high growth sector, and Charlotte’s Web offers investors an attractive way to plant a foot in the door. In 2017, the CBD market’s value was $202 million. Forbes reports that the market is expected to grow 700 percent by 2020, to a $2.1 billion valuation, and a nearly $3 billion valuation by 2021.

Charlotte’s Web is an established market leader in hemp-derived CBD production and distribution operations. Because their products are hemp-derived, the company has been able to sell them across the U.S. as well as globally. The specific market for hemp-derived CBD has grown rapidly over the last two years, with projected growth of a CAGR of 55 percent and a $1.6 billion valuation by 2021. Charlotte’s Web maintains a $72 million net cash position.

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Based in Boulder, Colorado, the company had a 2017 market share of 14 percent in the hemp-extracted CBD supplement space. The company, which sells tinctures, topical products and capsules, nearly doubled their 2017 market share, up from 8 percent in 2016.

The company’s largest competitor is CV Sciences (CVSI), and Canaccord states that Charlotte’s Web is positioned for higher near-term growth than its peers.

Charlotte Web’s strong brand power

Charlotte’s Web is named for pediatric patient Charlotte Figi, who suffers from a rare form of epilepsy that caused her to have as many as 300 seizures in one day. The company turned her story into a powerful branding tool.

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The company offers a popular line of products under the CW Hemp brand including oils, topicals, capsules, and pet products. Their claim to fame is an extract from a plant originally named “Hippie’s Disappointment”—appropriately named for its inability to provide a THC high. Hemp has an almost undetectable amount of THC —0.3 percent or less.

Retail relationships and management team

In addition to strong brand recognition, the company’s products are well positioned in larger niche and specialty healthcare retailers. At the end of this year, Charlotte’s Web expects to have over 3,000 retail partners. They’ve exhibited continued growth in their e-commerce platforms, as well; both should allow the company to continue to expand its market share. As federal and FDA regulations on CBD become less stringent, the company is poised to place their products in mass-market retail.

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The story of Charlotte’s Web is a fascinating one. Seven Stanley brothers are behind the company’s line of CW Hemp products, which include oils, topical, capsules and even pet products. The company’s claim to fame is its world-renowned hemp genetics straight from their farm in Boulder, Colorado.

The company has a robust innovation pipeline that positions them well for growth over the long-term. Currently, Charlotte’s Web offers about 25 products in various formulations. Additionally, the company has both proprietary hemp strain cultivation as well as proprietary extraction methodologies and is fully vertically integrated with control from seed to shelf. They own the plant genetics and have proprietary conversion processes as well. Because of all of these factors, they are projected to introduce five to seven new products over the next two years, expanding into other applications such as cosmetics, beverages, pet care, and sports medicine.

The management team will easily be able to scale its cultivation operations while maintaining their pricing ability cost-effectively.