Top Ancillary Cannabis Stocks to Watch in October 2025
The U.S. cannabis industry continues to grow rapidly as legalization momentum spreads across new states. According to recent data, the market is projected to exceed $35 billion in annual sales by 2025. Additionally, analysts expect the industry to reach over $70 billion by 2030 as federal reform progresses. Last week, renewed discussions in Congress surrounding cannabis rescheduling lifted investor optimism. The Department of Health and Human Services’ recommendation to reclassify cannabis also fueled market speculation. As a result, many ancillary stocks—those supporting growers with equipment, nutrients, and hydroponic systems—saw a spike in trading activity. These companies remain essential for industry expansion, offering investors exposure without the risks of direct plant handling.
However, despite the growing optimism, traders must apply disciplined technical analysis and proper risk management. Chart patterns, moving averages, and support zones can help identify ideal entry levels. Furthermore, setting clear stop losses helps protect capital during market volatility. Ancillary cannabis stocks can experience sharp price swings following regulatory headlines. Therefore, traders should look for confirmation signals before entering positions. Diversifying across multiple plays also helps reduce risk exposure. With legalization efforts gaining traction and cultivation demand increasing, technical setups in this sector may present strong short-term opportunities. By combining trend analysis with sound strategy, investors can trade these stocks more confidently this week.
Ancillary Cannabis Stocks Powering the Industry’s Next Wave
As the cannabis sector evolves, ancillary companies continue to play a vital role in supporting its rapid growth. These firms provide essential cultivation products, lighting systems, nutrients, and technologies that enable producers to operate efficiently without touching the plant directly. In 2025, the U.S. cannabis market is projected to surpass $35 billion in annual sales, with continued expansion expected as more states move toward legalization. Ancillary companies benefit from this trend, offering investors diversified exposure and lower regulatory risk.
This October, three standout ancillary cannabis stocks are worth watching—GrowGeneration Corp. (GRWG), Hydrofarm Holdings Group Inc. (HYFM), and Scotts Miracle-Gro Company (SMG). Each plays a unique role in the cannabis supply chain. They also demonstrate varying degrees of financial recovery as the industry rebounds from previous oversupply pressures. Below is a closer look at their operations, market presence, and recent financial performance.
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October 2025 Watchlist: GrowGeneration, Hydrofarm, and Scotts Miracle-Gro Lead Ancillary Cannabis Gains
- GrowGeneration Corp. (NASDAQ: GRWG)
- Hydrofarm Holdings Group Inc. (NASDAQ: HYFM)
- Scotts Miracle-Gro Company (NYSE: SMG)
GrowGeneration Corp. (GRWG)
GrowGeneration operates one of the largest hydroponic and organic gardening supply chains in the United States. It does not own dispensaries but serves as a crucial supplier for licensed cultivators and home growers. The company’s biggest footprint lies in California, Colorado, Florida, Oregon, and the Northeastern U.S. With over 60 retail locations nationwide, GrowGeneration provides a full range of cultivation essentials, including lighting systems, nutrients, soils, and environmental controls.
The company has successfully built proprietary brands such as CharCoir, Drip Hydro, and Ion LED, which now make up a significant share of its product portfolio. Through a mix of e-commerce and brick-and-mortar stores, it continues to expand market reach and deepen relationships with commercial growers. As legalization momentum grows across the country, GrowGeneration remains strategically positioned as a key retail and distribution partner for the cannabis cultivation industry.
Financially, GrowGeneration has shown early signs of stabilization in 2025. In its latest quarter, the company reported approximately $41 million in net sales, reflecting gradual improvement from earlier quarters. Gross margins improved to around 28%, supported by higher sales of proprietary products and better cost control. Operating expenses have decreased as management streamlines operations and consolidates store performance.
The net loss for the quarter narrowed to under $5 million, a significant improvement compared to prior periods. Importantly, GrowGeneration holds minimal debt and maintains roughly $50 million in cash and marketable securities, giving it flexibility to invest in growth. While adjusted EBITDA remains slightly negative, the trend is positive. The company continues focusing on higher-margin categories and private-label brands to drive profitability into 2026.
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Hydrofarm Holdings Group Inc. (HYFM)
Hydrofarm Holdings designs, manufactures, and distributes hydroponic and controlled-environment agricultural products. Like GrowGeneration, Hydrofarm does not operate dispensaries but plays a critical role in the supply chain. It serves commercial cultivators, indoor farmers, and greenhouses across the United States and Canada. The company operates several large distribution centers and has a diverse product catalog that includes lighting systems, nutrient lines, climate controls, and grow media.
Hydrofarm’s key competitive strength lies in its proprietary and acquired product brands. It has developed a reputation among professional growers for high-efficiency lighting and nutrient delivery systems. Despite challenges in recent years due to industry oversupply and retailer consolidation, Hydrofarm continues to maintain a loyal customer base. As the cannabis market stabilizes, the company is expected to benefit from renewed capital investment by cultivators expanding capacity.
On the financial side, Hydrofarm’s most recent results showed continued operational challenges but also early restructuring benefits. The company reported a per-share loss of around $3.60, compared to a loss of roughly $2.80 in the same quarter last year. Revenues came in lower year over year due to weaker order volumes from commercial growers, yet cost reductions offset part of the shortfall. Gross margins remained in the mid-teens at about 15%, reflecting pricing pressure and discounting to clear inventory.
Hydrofarm carries moderate long-term debt, but liquidity ratios indicate manageable short-term solvency. Management has been actively renegotiating supplier agreements and optimizing its logistics network to improve profitability. Although profitability remains elusive, analysts expect a gradual recovery as the market normalizes and Hydrofarm’s new product lines gain traction. The next few quarters will be crucial for the company to demonstrate consistent cash-flow improvements.
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Scotts Miracle-Gro Company (SMG)
Scotts Miracle-Gro is a well-known leader in lawn, garden, and hydroponic solutions, giving investors a diversified way to gain cannabis exposure. Its Hawthorne Gardening Company division serves as the cannabis industry’s primary link. Through Hawthorne, Scotts provides hydroponic systems, LED lighting, nutrients, and environmental control technologies to large commercial cultivators. While the company does not own or manage dispensaries, its products are deeply embedded in the cultivation supply chain.
Scotts’ largest cannabis-related presence is in California and other high-growth U.S. states where commercial cultivation has scaled significantly. The parent company’s broader consumer gardening business helps buffer Hawthorne’s cyclical performance. As a result, Scotts offers stability and long-term potential even during periods of market consolidation. Hawthorne has also invested heavily in research and partnerships focused on sustainability and water-efficient growing systems — areas gaining traction among environmentally focused growers.
Financially, Scotts Miracle-Gro remains one of the strongest ancillary cannabis plays in the market. The company recently reaffirmed its full-year 2025 outlook with continued sales growth in both consumer and Hawthorne divisions. The Hawthorne segment experienced rising demand for LED grow lighting and advanced nutrient systems, signaling recovery from earlier slowdowns. Gross margins improved year over year as higher volumes offset prior inventory markdowns.
Scotts continues to generate robust free cash flow, which supports dividend payments and additional R&D investment. While the cannabis segment represents a smaller percentage of total revenue, it offers meaningful upside as federal reform advances. The company’s diversified structure provides resilience in volatile markets, making SMG an appealing ancillary stock for investors seeking stability with exposure to cannabis-driven growth.
Investing Beyond the Plant
Ancillary cannabis companies like GrowGeneration, Hydrofarm, and Scotts Miracle-Gro remain key beneficiaries of the U.S. cannabis industry’s expansion. They provide the tools and technology enabling cultivators to produce efficiently and profitably. As legalization progresses, demand for high-quality growing supplies and equipment should continue to rise.
From a technical standpoint, traders should monitor support and resistance levels closely, especially as volatility increases in the broader market. Proper risk management — including defined stop levels and position sizing — is essential when trading or investing in these volatile names. With the cannabis industry poised for another wave of growth, these three ancillary stocks offer investors diversified exposure to one of the most promising sectors heading into 2026.
MAPH Enterprises, LLC | (305) 414-0128 | 1501 Venera Ave, Coral Gables, FL 33146 | new@marijuanastocks.com
