Top Ancillary Cannabis Stocks to Watch in February 2026
The cannabis industry continues to evolve as operators adjust to tighter capital markets and shifting regulations. As a result, many investors are looking beyond plant-touching companies. Ancillary cannabis stocks often provide that alternative exposure. These businesses support the industry without directly selling cannabis. Therefore, they avoid many regulatory and licensing risks. At the same time, they still benefit when cultivation and retail activity improve.
Entering February 2026, the focus remains on efficiency, margin recovery, and balance sheet strength. Growers are no longer expanding recklessly. Instead, they are upgrading equipment, improving yields, and cutting costs. This trend favors well-positioned ancillary suppliers. Companies that offer essential products and services can survive downturns and rebound faster. Moreover, ancillary stocks often move earlier in recovery cycles.
Additionally, federal reform discussions continue to create headline-driven volatility. However, long-term operators still need nutrients, lighting, and growing systems. That demand does not disappear. It simply pauses and then resumes. Consequently, ancillary stocks can offer attractive risk-reward setups for patient investors.
This article highlights three top ancillary cannabis stocks to watch in February 2026. Each company plays a different role in the supply chain. Together, they provide a broad view of cultivation and infrastructure demand. The companies covered are GrowGeneration (GRWG), Hydrofarm Holdings Group (HYFM), and The Scotts Miracle-Gro Company (SMG). While their paths differ, each presents a unique setup heading into the new year.
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February 2026 Watchlist: Leading Ancillary Cannabis Stocks
- GrowGeneration (NASDAQ: GRWG)
- Hydrofarm Holdings Group (NASDAQ: HYFM)
- The Scotts Miracle-Gro Company (NYSE: SMG)
GrowGeneration (GRWG)
GrowGeneration is a leading hydroponics and cultivation supply company serving cannabis growers nationwide. It sells lighting, nutrients, soil, and climate control products. These products are critical for indoor cultivation. Its largest presence is in mature cannabis markets like California and Colorado. Additionally, the company operates in other key legalization states across the country. GrowGeneration does not own cannabis dispensaries. Therefore, its dispensary count remains zero. Instead, it supports the growers who supply dispensary shelves.
The company operates more than twenty retail and distribution locations nationwide. This footprint allows fast delivery and local service. Moreover, GrowGeneration has focused on expanding proprietary brands. These in-house products help improve margins and customer loyalty. Growers often prefer consistent inputs, especially during cost-cutting cycles. As a result, long-term relationships can form even in slow markets. Consequently, GRWG remains closely tied to cultivation health rather than retail sales trends.
From a financial standpoint, GrowGeneration has shown signs of stabilization. Recent results reflected sequential revenue improvement. More importantly, gross margins expanded meaningfully. That improvement followed aggressive cost reductions and store optimization. Adjusted EBITDA returned to positive territory, which marked an important milestone. Management has also emphasized disciplined inventory management. This approach reduces cash burn during slow demand periods.
Looking ahead, the key story for GRWG is margin sustainability. If proprietary brands continue to gain share, profitability can improve without explosive revenue growth. Additionally, a modest rebound in cultivation spending could amplify earnings. Therefore, GrowGeneration stands out as a recovery-oriented ancillary play for February 2026.
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Hydrofarm Holdings Group (HYFM)
Hydrofarm is a distributor and brand owner focused on controlled environment agriculture. Its products include grow lights, nutrients, and environmental systems. These tools are essential for indoor cannabis cultivation. The company’s largest U.S. exposure sits in California and western cultivation markets. Additionally, Hydrofarm serves non-cannabis indoor farming customers. Like other ancillary players, it does not operate dispensaries. Therefore, its dispensary count is zero.
Hydrofarm’s business model is more volume-sensitive than some peers. When growers delay expansion, equipment orders slow quickly. As a result, HYFM has experienced sharper drawdowns during industry downturns. However, this dynamic also creates leverage during recoveries. When growers restart spending, distribution volumes can rebound rapidly. Therefore, Hydrofarm often trades as a higher-beta ancillary name.
Financially, recent quarters showed continued pressure. Revenue declined year over year as growers reduced capital expenditures. Gross margins also compressed, reflecting lower volumes and pricing pressure. Additionally, adjusted EBITDA remained negative. However, management has made progress in reducing operating expenses. SG&A declined compared to prior periods. That discipline matters because it lowers the break-even point.
Looking forward, investors should monitor revenue stabilization rather than growth. Even flat sales could meaningfully improve cash flow if costs remain controlled. Inventory management and supplier terms will also be important. If cultivation demand turns upward, HYFM could respond quickly. Consequently, Hydrofarm remains a speculative but potentially rewarding watchlist candidate for February 2026.
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The Scotts Miracle-Gro Company (SMG)
The Scotts Miracle-Gro Company is best known for lawn and garden products. However, it has long had exposure to cannabis through its Hawthorne Gardening division. Hawthorne supplied hydroponic equipment to commercial growers. Scotts has a massive nationwide footprint through big-box retail channels. It does not operate cannabis dispensaries. Therefore, its dispensary count is zero.
The major development for Scotts is its decision to divest Hawthorne. This move simplifies the business and reduces cannabis-related volatility. As a result, Scotts can refocus on its core consumer lawn and garden segment. This shift may appeal to more conservative investors. At the same time, it still offers indirect insight into cannabis infrastructure trends.
Financially, Scotts has shown improving margins in recent quarters. Gross margin expansion reflected better pricing and cost controls. Additionally, adjusted EBITDA improved year over year. Management has also prioritized debt reduction. A new share repurchase authorization further signals confidence. Importantly, the Hawthorne divestiture is expected to improve earnings consistency.
For February 2026, Scotts represents a lower-risk ancillary-adjacent option. While it lacks pure-play exposure, it offers stability. Investors seeking reduced volatility may prefer this setup. Consequently, SMG can serve as a defensive complement to higher-risk cannabis names.
Hidden Opportunities in Cannabis
Ancillary cannabis stocks continue to offer compelling opportunities as the industry matures. Unlike plant-touching operators, these companies avoid many regulatory obstacles. However, they still benefit from long-term cultivation demand. As February 2026 approaches, investors remain focused on profitability and balance sheet strength.
GrowGeneration stands out as a margin recovery story. Its proprietary brands and disciplined operations provide upside if demand stabilizes. Hydrofarm offers higher risk but greater leverage to a spending rebound. If cultivation capex returns, HYFM could move quickly. Meanwhile, Scotts Miracle-Gro delivers stability and cash flow with reduced cannabis exposure.
Each company serves a different investor profile. Some favor recovery trades. Others prefer defensive positioning. Together, these three stocks provide diversified exposure to cannabis infrastructure. As always, risk management remains essential. The sector can be volatile and headline-driven. Therefore, position sizing and technical confirmation matter.
Ultimately, ancillary stocks remain a critical part of the cannabis ecosystem. Growers cannot operate without supplies and systems. As the industry resets, these businesses may quietly rebuild. For investors watching February 2026 closely, these names deserve a spot on the watchlist.
MAPH Enterprises, LLC | (305) 414-0128 | 1501 Venera Ave, Coral Gables, FL 33146 | new@marijuanastocks.com
