The U.S. cannabis industry continues expanding, creating opportunities for ancillary companies that support cultivation and retail operations the U.S. legal cannabis industry experienced significant growth, with sales reaching approximately $31.4 billion, marking a 9.14% increase from the previous year. Industry experts predict sales could reach $50 billion by 2028 as more states legalize marijuana. Recently, Congress discussed federal cannabis reform, increasing speculation about potential rescheduling. If federal legalization advances, ancillary stocks could see strong momentum. These companies provide essential products, including hydroponics, lighting, and packaging, benefiting from growing cannabis demand. As the industry evolves, investors are closely watching top-performing ancillary stocks this week.

To navigate cannabis stocks, investors should use technical analysis and risk management strategies. Identifying key support and resistance levels helps time entries and exits efficiently. Volume trends and moving averages also provide insight into stock momentum. Additionally, diversifying investments reduces risk in this volatile sector. As legalization efforts progress, tracking market sentiment and sector news remains essential.

Key Players in the Industry

The cannabis industry continues to expand in the U.S., creating strong demand for ancillary companies. These companies provide essential products and services to cannabis cultivators and dispensaries. With legalization efforts gaining traction, ancillary stocks could see significant growth in 2025.

This month, three top ancillary cannabis stocks stand out. GrowGeneration Corp. (GRWG) specializes in hydroponic and organic gardening products. Hydrofarm Holdings Group, Inc. (HYFM) supplies lighting, ventilation, and nutrients to cannabis growers. Scotts Miracle-Gro Company (SMG) dominates the lawn and garden market while expanding its cannabis-focused division. Each of these companies plays a vital role in the industry’s supply chain.

Investors should consider these stocks due to their strong market presence and financial performance. Let’s take a closer look at what makes each of them a top pick in March 2025.

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March 2025’s Top Ancillary Cannabis Stocks: Companies Powering the Green Industry

1. GrowGeneration Corp. (NASDAQ: GRWG)
2. Hydrofarm Holdings Group, Inc. (NASDAQ: HYFM)
3. Scotts Miracle-Gro Company (NYSE: SMG)

GrowGeneration Corp. (GRWG)

GrowGeneration Corp. (GRWG) is the largest hydroponics and specialty gardening retailer in the U.S. The company operates over 60 retail locations nationwide, supplying cannabis cultivators with nutrients, lighting, and grow tents. It has a strong presence in key cannabis markets, including California, Colorado, and Michigan. These states have established recreational and medical cannabis programs, making them critical to GrowGeneration’s success.

The company also sells its products online through its e-commerce platform. This has allowed it to reach customers beyond its physical locations. GrowGeneration continues to expand by acquiring smaller hydroponics companies and opening new stores in emerging markets. Its strong distribution network gives it an edge over competitors.

Financially, GrowGeneration has maintained stable revenue despite industry challenges. In its latest earnings report, the company reported $260 million in annual revenue. While this is a slight decline from previous years, cost-cutting measures have helped improve profitability.

Gross margins have remained strong at around 28%, showing efficient operations. The company has reduced operating expenses and streamlined its supply chain. These actions have helped maintain positive cash flow. Additionally, GrowGeneration’s e-commerce sales continue to grow, contributing to overall revenue stability.

Looking ahead, the company plans to focus on higher-margin products. It also aims to expand into new markets as more states legalize cannabis. With improving financials and strategic expansion, GrowGeneration remains a key ancillary stock to watch in 2025.

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Hydrofarm Holdings Group, Inc. (HYFM)

Hydrofarm Holdings Group, Inc. (HYFM) is a leading supplier of hydroponic equipment and agricultural technology. The company provides lighting, climate control systems, and nutrients for indoor cannabis cultivation. It operates multiple distribution centers across North America, ensuring efficient delivery of products.

Hydrofarm’s largest presence is in the United States, where it serves commercial and home growers. The company’s products are widely used in California, Oregon, and Washington. These states have a strong cannabis cultivation industry, making them key markets for Hydrofarm.

The company has expanded its product portfolio through acquisitions of leading hydroponics brands, strengthening its position in the cannabis industry. It also continues to invest in research and development to improve its products.

Financially, Hydrofarm has faced challenges in recent years. However, its latest earnings report showed signs of recovery. The company reported $350 million in revenue, marking a 10% increase from the previous year. Cost reductions and supply chain improvements have contributed to better margins.

Despite previous losses, Hydrofarm has improved its cash flow and reduced debt. This financial discipline is helping the company stabilize its operations. The demand for hydroponic solutions remains high as cannabis cultivation expands.

Looking forward, Hydrofarm plans to introduce new energy-efficient lighting solutions. These innovations aim to reduce growers’ cultivation costs. The company also expects further growth from its commercial partnerships. Hydrofarm could see stronger financial performance in 2025 if the industry continues expanding.

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Scotts Miracle-Gro Company (SMG)

Scotts Miracle-Gro Company (SMG) is a lawn and garden care household name. While known for traditional gardening products, it has built a strong presence in the cannabis industry. Through its subsidiary, Hawthorne Gardening Company, Scotts provides lighting, fertilizers, and hydroponic systems for cannabis growers.

The company operates nationwide, with a significant presence in states like California, Colorado, and Michigan. Both home and commercial cannabis cultivators widely use its products. Hawthorne Gardening has become a market leader in hydroponic solutions, making Scotts a major ancillary cannabis stock.

In addition to its hydroponic business, Scotts continues expanding its organic and environmentally friendly product lines. This strategy aligns with increasing consumer demand for sustainable cultivation practices.

Financially, Scotts Miracle-Gro has maintained steady revenue growth. In its latest report, the company announced $4.2 billion in annual sales. This represents a slight increase from the previous year, driven by its Hawthorne division.

However, rising production costs have impacted overall profit margins. Scotts has responded by optimizing operations and streamlining product distribution. Despite economic challenges, it remains profitable, with strong cash reserves.

The company also continues to return value to shareholders through dividends and stock buybacks. Its diversified product portfolio provides stability in fluctuating markets. With continued investment in the cannabis sector, Scotts Miracle-Gro remains a strong pick for ancillary cannabis investors in 2025.

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Must-Watch Ancillary Cannabis Stocks for Smart Investors

Ancillary cannabis stocks not only provide essential products and services to the growing cannabis industry but also play a vital role in its expansion. Companies like GrowGeneration, Hydrofarm, and Scotts Miracle-Gro have not only positioned themselves as industry leaders but have also built strong market presence. Because of this, their dominance in key U.S. cannabis markets makes them attractive investment options.

Even though the industry faces challenges, these companies continue to adapt by focusing on financial improvements, strategic expansions, and new product developments. As a result, their growth remains strong. Investors seeking exposure to the cannabis sector without directly investing in cultivation should seriously consider these ancillary stocks.

Furthermore, with increasing legalization and rising demand for cultivation products, these companies are set to benefit in 2025. Therefore, keeping an eye on their financial performance and market trends will help investors make informed decisions. Ultimately, as the cannabis industry evolves, ancillary stocks will remain crucial to its success.

The post March 2025 Watchlist: Top Ancillary Cannabis Stocks Poised for Growth appeared first on Marijuana Stocks | Cannabis Investments and News. Roots of a Budding Industry..

The U.S. cannabis industry continues to expand, creating strong opportunities for ancillary companies that support dispensaries and cultivators. In 2024, legal cannabis sales in the U.S. exceeded $35 billion, with projections reaching over $40 billion by 2025. Ancillary businesses that provide technology, equipment, and services benefit from this rapid growth without facing the same legal challenges as plant-touching companies. Recently, federal legalization talks have gained momentum, with lawmakers pushing for banking reform and rescheduling cannabis. If these changes occur, more businesses could enter the market, boosting demand for ancillary services. Investors looking for exposure to the sector should watch these stocks closely.

When trading cannabis stocks, technical analysis and risk management are essential. Volatility remains high, making support and resistance levels key for identifying potential entry points. Additionally, traders should monitor volume trends and moving averages to gauge momentum. Setting stop-loss orders helps protect against sudden market swings. As legalization efforts advance, traders should stay updated on industry news. Changes in regulations often impact stock prices, creating both risks and opportunities.

As the cannabis industry expands, ancillary companies are playing a critical role. These businesses do not grow or sell cannabis directly. Instead, they provide essential services and infrastructure to dispensaries and growers. Ancillary stocks offer investors a way to gain exposure to the sector while avoiding legal restrictions tied to plant-touching businesses.

With U.S. cannabis sales projected to exceed $40 billion by 2025, companies supporting dispensaries and growers are expected to see strong demand. Additionally, federal legalization talks continue, which could drive further growth. Below are three top ancillary cannabis stocks to watch in February 2025.

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3 Ancillary Cannabis Stocks to Watch in February for Strong Returns

Leafly Holdings, Inc. (NASDAQ: LFLY)

WM Technology, Inc. (NASDAQ: MAPS)

GrowGeneration Corp. (NASDAQ: GRWG)

Leafly Holdings, Inc.

Leafly Holdings, Inc. is a well-known cannabis technology platform. The company operates one of the largest online cannabis marketplaces, helping consumers discover products and dispensaries. Its platform offers reviews, strain information, and purchasing options. This makes it a crucial tool for both consumers and dispensary owners.

The company has a strong presence across the U.S. It connects over 4,500 dispensaries with millions of customers each month. Leafly also provides advertising and data analytics services, helping dispensaries attract and retain customers. In states like California, Colorado, and Michigan, Leafly is a top choice for cannabis users seeking information on legal products.

Recently, Leafly has been expanding its business model. It now integrates directly with dispensary point-of-sale systems. This allows real-time product availability updates. As the cannabis market grows, Leafly continues to strengthen its role as a vital industry resource.

Leafly’s Latest Financials

Leafly’s most recent earnings report showed steady revenue growth. In its latest quarter, the company reported $11.3 million in revenue, marking a 7% year-over-year increase. This growth was driven by increased ad spending from dispensaries and product manufacturers.

However, the company continues to face challenges. Leafly reported a net loss of $4.8 million, mainly due to higher operating costs and investments in platform upgrades. Despite this, Leafly has been working to improve efficiency. The company has streamlined its workforce and optimized marketing expenses.

Cash reserves remain stable. Leafly ended the quarter with $21 million in cash and short-term investments. This gives it enough liquidity to fund operations while expanding its market reach. If ad revenues continue to grow, Leafly could move closer to profitability in the near future.

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WM Technology, Inc.

WM Technology, Inc., known as Weedmaps, is another major player in cannabis tech. It provides an online platform that connects consumers with dispensaries and delivery services. Weedmaps also offers software solutions that help dispensaries manage their businesses efficiently.

Weedmaps is widely used across the U.S., particularly in states with well-established cannabis markets. The platform lists over 5,000 dispensaries and serves millions of monthly users. In states like California, Nevada, and Arizona, Weedmaps plays a crucial role in the cannabis supply chain.

Beyond being a marketplace, Weedmaps offers business tools. Its software helps dispensaries handle inventory tracking, compliance, and customer engagement. This makes it a key partner for legal cannabis businesses looking to streamline operations. The company also provides advertising services, allowing dispensaries to boost visibility.

WM Technology’s Latest Financials

WM Technology recently posted $50.6 million in quarterly revenue, reflecting a 5% year-over-year decline. The decrease was attributed to lower ad spending from dispensaries facing economic pressures. However, the company remains profitable, with a net income of $3.2 million for the quarter.

The company has been focusing on cost control. Operating expenses have been reduced by 10% year-over-year, helping maintain profitability. Weedmaps also continues to invest in improving its platform. New features, such as AI-driven recommendations, have increased user engagement.

Despite short-term revenue challenges, Weedmaps has a strong cash position. The company reported $62 million in cash reserves, ensuring financial stability. With potential federal legalization on the horizon, Weedmaps could see an uptick in business as more dispensaries enter the market.

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GrowGeneration Corp.

GrowGeneration Corp. is one of the largest suppliers of hydroponic and cultivation equipment in the U.S. The company provides growers with lighting, nutrients, soil, and irrigation systems. As legal cannabis cultivation expands, GrowGeneration plays a crucial role in supplying the industry.

GrowGeneration currently operates over 60 retail locations across the U.S., with a strong presence in California, Colorado, and Oklahoma. These states have some of the highest cannabis production levels. The company also serves commercial cultivators, providing bulk equipment and consulting services.

In addition to retail stores, GrowGeneration operates an e-commerce platform. This allows growers to order supplies online with fast shipping. The company continues to expand, acquiring smaller hydroponic retailers to strengthen its market share.

GrowGeneration’s Latest Financials

GrowGeneration’s latest earnings report showed $65.7 million in quarterly revenue, representing a 4% year-over-year increase. The growth was driven by higher demand for cultivation supplies, particularly in newly legalized states.

However, the company reported a net loss of $2.5 million for the quarter. This was primarily due to supply chain challenges and rising operating costs. GrowGeneration has been working to address these issues by optimizing its distribution network.

Cash reserves remain healthy. The company ended the quarter with $78 million in cash, providing flexibility for future expansions. GrowGeneration also recently announced new partnerships with major cannabis cultivators. If demand for growing supplies remains strong, the company could see improved profitability in upcoming quarters.

Cannabis Stocks for February as Industry Demand Increases

Ancillary cannabis stocks provide unique investment opportunities. They support the industry without directly handling cannabis, making them more accessible to investors. Leafly, WM Technology, and GrowGeneration are three leading companies in this space. Each plays a key role in connecting consumers, supporting dispensaries, and supplying cultivators.

Despite some financial challenges, these companies remain strong industry players. With potential federal legalization and continued market expansion, ancillary cannabis stocks could see significant growth in 2025. Investors looking for exposure to the sector should keep a close watch on these companies in the coming months.

The post High-Potential Ancillary Cannabis Stocks to Watch in February 2025 appeared first on Marijuana Stocks | Cannabis Investments and News. Roots of a Budding Industry..