Charlotte's Web Holdings Inc (OTCMKTS:CWBHF) (CSE:CWEB) was initiated Thursday as a Buy at Roth Capital Partners, which described the company as a market leader in the hemp extract cannabidiol market.
The cannabis company has high-quality supply and a recognized brand to begin selling into the mass market, Roth Capital’s Scott Fortune wrote in a research note.
Boulder, Colorado-based Charlotte’s Web stands to benefit after the 2018 US farm bill removed hemp from a list of federally controlled substances, according to Roth.
“We expect consumer acceptance, mass-market retailer adoption, supply advantages and interest from consumer packaged goods companies and Canadian limited partnerships to drive future returns for shareholders,” Fortune wrote.
The Roth analyst set a price target of C$26.50 on the shares, which is 40% higher than its current price on the Canadian Securities Exchange.
Charlotte's Web, according to Roth, has exhibited years of execution of high-quality hemp production from proprietary hemp strains, allowing a seed-to-sale approach.
The company has more than 300 acres of hemp cultivation resulting in a 675,000 pounds of hemp to meet 2019 demand from 3,700 retail stores and online, the analyst wrote.
Seed-to-sales integration allows growth of revenue to US$312.2 million in fiscal 2020 from US$70.5 million in fiscal 2018, according to Roth.
Shares of Charlotte's Web fell US$0.34 to US$13.90 in Thursday’s OTC Markets trading. They were down C$0.42 to C$18.69 in Canada.
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