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Best Cannabis Infrastructure Stocks to Buy in 2025
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Top Ancillary Cannabis Stocks to Watch This Week: Industry Insights and Investment Strategies
The U.S. cannabis industry continues to expand rapidly. Experts estimate the market will exceed $45 billion in annual revenue by 2025. This growth is fueled by consumer demand, increasing dispensary presence, and employment surges across cultivation and retail sectors. Most Americans now live near a licensed cannabis store, and the industry employs hundreds of thousands. While federal legalization remains pending, significant momentum is building. Recent federal efforts to reclassify cannabis could reduce restrictions and tax burdens. These changes would directly benefit ancillary businesses supporting cultivation and distribution. Therefore, many investors are closely watching this space for early opportunities.
Ancillary Cannabis Stocks and the U.S. Cannabis Industry
Ancillary cannabis stocks are gaining traction due to their indirect involvement with plant-touching operations. These companies provide vital equipment, technology, and services to cannabis producers. However, trading in this space requires discipline and planning. Technical analysis can help spot patterns in price action for well-timed trades. Investors should also use stop-loss levels to manage downside risk. Additionally, monitoring key indicators and market sentiment remains essential. With regulatory changes likely ahead, informed trading decisions can offer strong upside potential.
As the U.S. cannabis industry continues to evolve, ancillary companies—those providing essential products and services without directly handling cannabis—are gaining prominence. These businesses support cultivators and retailers by offering tools, equipment, and infrastructure. Due to their strategic roles and broader market applications, ancillary stocks become more attractive as the market matures. Here are three top ancillary cannabis stocks to watch this April: GrowGeneration Corp. (GRWG), Hydrofarm Holdings Group, Inc. (HYFM), and The Scotts Miracle-Gro Company (SMG).
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Top 3 Ancillary Cannabis Stocks to Watch in April 2025
- GrowGeneration Corp. (NASDAQ: GRWG)
- Hydrofarm Holdings Group, Inc. (NASDAQ: HYFM)
- The Scotts Miracle-Gro Company (NYSE: SMG)
GrowGeneration Corp. (NASDAQ: GRWG)
GrowGeneration is the largest hydroponics supplier in the United States. It operates 31 retail locations across 12 states as of the end of 2024. The company offers a wide range of products, including organic nutrients, soils, lighting systems, and high-tech hydroponic equipment. Both commercial cultivators and home growers rely on their inventory. GrowGeneration has developed strong relationships with leading industry brands. Additionally, its direct-to-farm delivery service gives it a competitive edge in customer logistics and satisfaction. Its focus on proprietary product lines continues to grow as the market demands more specialized cultivation solutions.
In 2024, GrowGeneration reported net sales of $188.9 million. Proprietary brand sales accounted for $39.5 million of that figure. The proportion of proprietary sales grew from 18.8% to 24.2% year-over-year. Despite restructuring-related setbacks, the company ended the year with no debt and $56.5 million in cash. Its net loss of $49.5 million was driven by transformation efforts meant to position the company for long-term growth. In 2025, GrowGeneration expects net revenues between $170 million and $180 million. Management also projects a shift toward profitability, aiming for up to $2 million in adjusted EBITDA. Gross margins are expected to rise to as much as 31%, fueled by higher-margin in-house products.
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Hydrofarm Holdings Group, Inc. (NASDAQ: HYFM)
Hydrofarm is a leading manufacturer and distributor of branded hydroponic equipment. It supports indoor and greenhouse cultivation through a wide variety of products. These include grow lights, climate control systems, nutrient solutions, and other essential cultivation tools. With more than 40 years in the industry, Hydrofarm has built a strong reputation for innovation and reliability. Its broad customer base includes both small-scale growers and large commercial operations. The company continues to evolve by offering more proprietary brands and optimizing its logistics network. Hydrofarm is widely known for being a comprehensive one-stop-shop for controlled environment agriculture.
In 2024, Hydrofarm reported $190.3 million in net sales. This figure reflected a year-over-year decline from $226.6 million. The company posted a net loss of $66.7 million and an adjusted EBITDA loss of $5.2 million. Despite these setbacks, Hydrofarm generated $2.7 million in positive operating cash flow in the fourth quarter. It also maintained a zero balance on its revolving credit line, showing strong liquidity discipline. Proprietary brand sales now represent 56% of total revenue, up from 35% just four years ago. This shift highlights a strategic focus on higher-margin items. For 2025, Hydrofarm anticipates a 10–20% decline in sales, but expects improved cash flow and operating efficiency. The company is taking steps to restructure and streamline operations.
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The Scotts Miracle-Gro Company (NYSE: SMG)
Scotts Miracle-Gro is the world’s largest marketer of consumer lawn and garden products. Its flagship brands include Scotts, Miracle-Gro, and Ortho. Through its Hawthorne Gardening division, the company is also a major player in the cannabis cultivation supply space. Hawthorne offers lighting, nutrients, and hydroponic systems to professional growers. Although the division focuses heavily on cannabis, it also supports a variety of indoor agricultural operations. Scotts’ dual presence in consumer retail and the hydroponics sector makes it uniquely positioned for growth. It benefits from broad market exposure and strong brand recognition across its verticals.
In the first quarter of 2025, Scotts Miracle-Gro reported $416.8 million in total sales. U.S. Consumer segment sales rose 11% to $340.9 million. The company’s gross margin improved to 22.7%, while adjusted gross margin reached 24.0%. Non-GAAP adjusted EBITDA came in at $3.8 million, up significantly from the prior year. Hawthorne’s sales dropped 35%, largely due to a strategic exit from third-party distribution. However, this shift has positively impacted EBITDA by reducing excess costs. Scotts continues to invest in marketing and promotional efforts to maintain its leading consumer position. Management remains confident in its full-year outlook and its ability to navigate short-term challenges.
Ancillary Cannabis Stocks Set to Thrive in 2025
GrowGeneration, Hydrofarm, and Scotts Miracle-Gro stand out as key ancillary players in the cannabis sector. Each company is actively adapting to current industry conditions while investing in future growth strategies. Although financial results in 2024 reflected ongoing challenges, all three firms are positioning themselves for improvement in 2025. With strong brand identities, product innovation, and operational improvements underway, these stocks offer potential upside. Investors looking for exposure to the cannabis industry—without directly betting on plant-touching companies—should keep a close eye on these three names in the months ahead.
The post Best Cannabis Infrastructure Stocks to Buy in 2025 appeared first on Marijuana Stocks | Cannabis Investments and News. Roots of a Budding Industry.™.
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April 17, 2025 at 10:01AM
April 17, 2025 at 10:06AM
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