What happened

GrowGeneration (GRWG -4.67%) grew like a weed on Thursday, after a prominent investment bank initiated coverage on the stock with a very bullish outlook. 

Stifel analyst Andrew Carter rates the stock a buy, at a $22 per share price target. That's well above its $14.05 closing price the day before Carter made his feelings known.

Marijuana leaf atop a $100 bill.

Image source: Getty Images.

So what

GrowGeneration, Stifel believes, will enjoy robust revenue growth because the company is a top name in hydroponics, a method of growing plants without soil. The bank is projecting that GrowGeneration will be able to nearly triple its take, to $362 million in fiscal 2022 from the trailing 12-month tally of $124 million.

One significant factor in this growth should be the expansion of the company's market due to legalization. Carter predicts that at least four U.S. states will legalize the sale and consumption of recreational marijuana, widening GrowGeneration's potential customer base commensurately.

Also, the analyst believes organic sales growth throughout the marijuana industry will be "driven by robust same-store sales growth and new store openings (1.5 year payback) with continued execution of [GrowGeneration's] ongoing roll-up of the category, suggesting potential upside to our estimates."

Now what

GrowGeneration certainly has momentum behind it. The company's business is booming, as proven by the very strong Q2 results it released earlier this month. It's arguably the hottest "picks and shovels" play in cannabis at the moment, and it's realistic to believe the company will meet or exceed Stifel's lofty view of it.