Success: Top Ancillary Cannabis Stocks to Keep an Eye on Before October
As October 2023 approaches, the cannabis industry is still thriving, and legalization campaigns are picking more steam in many regions of the globe. This expanding industry has provided a favorable climate for ancillary companies that specialize in the necessary tools and services to aid in the growth and manufacturing of cannabis. Top marijuana stocks in the cannabis industry’s support industries should be closely monitored by investors hoping to profit from the expanding cannabis sector.
According to a Grand View Research analysis, the worldwide legal marijuana market is forecast to reach $97.35 billion by 2026, reflecting the cannabis industry’s impressive recent development. The ancillary businesses that offer cutting-edge growing and production equipment to private and public cannabis farmers stand to gain a great deal from this expansion. Companies like GrowGen and Scotts Miracle-Gro, which offer a variety of products from hydroponic systems and lighting options to soil and fertilizers, have already established themselves as leaders in this industry. These supporting businesses are well-positioned to prosper and present appealing investment options for individuals seeking exposure to the developing cannabis industry as the demand for high-quality cannabis is rising.
In conclusion, ancillary companies that specialize in offering crucial machinery and services to support cannabis cultivation and manufacturing are positioned for major development as the cannabis sector continues to thrive and legalization initiatives gain momentum. This industry presents investors with an intriguing chance to capitalize on the booming cannabis business, with a predicted global market value in the tens of billions. Keep a close eye on the top marijuana ancillary stocks as October begins to see how they fare in this dynamic and promising sector.
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Ancillary Marijuana Stocks Worth Your Attention in October
- The Scotts Miracle-Gro Company (NYSE: SMG)
- Hydrofarm Holdings Group, Inc. (NASDAQ: HYFM)
- Agrify Corporation (NASDAQ: AGFY)
The Scotts Miracle-Gro Company
Scotts Miracle-Gro, the world’s largest brand-name consumer lawn and garden product maker, has entered the cannabis sector. The company’s wholly-owned subsidiary, Hawthorne Gardening, offers hydroponic equipment, lights, and fertilizers for cannabis cultivation. In January, Scotts added True Liberty Bags and Luxx Lights to their Hawthorne line. Hawthorne will be able to broaden its already top-notch lighting products due to the acquisition. Hawthorne’s year-end projection is unaffected by the decline in profits.
Details for the Third Quarter
- Company-wide third-quarter net sales decreased 6% due to Hawthorne’s decline of 40%; U.S. Consumer net sales increased 1% over the prior year.
- Consumer POS dollars were up 8% in the third quarter and over 5% year-to-date.
- Year-to-date cash flow improved by over $700 million.
- Total Project Springboard savings to exceed $300 million
- Full-year sales and Adjusted EBITDA are expected to decline.
- Amended credit agreement updates leverage glide path, providing operational flexibility.
SMG Stock Performance
SMG stock closed at $52.95 on September 27th, up 2.68% in the past month. In this case, the stock has a 52-week price range of $39.06-$88.61 and is up 8.97% year to date. According to analysts at CNN Business, SMG stock has a 12-month price target of $65 per share. This forecast represents an increase of 22.73% from its last trading price of $52.95.
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Hydrofarm Holdings Group, Inc.
Hydrofarm is a leading independent manufacturer and distributor of branded hydroponics equipment and supplies for controlled environment agriculture, including grow lights, climate control solutions, growing media, and nutrients, in addition to a diverse portfolio of proprietary and innovative branded products. For more than 40 years, Hydrofarm has helped farmers grow more easily and profitably. The organization wants to offer goods that will aid farmers, cultivators, and growers raise the caliber, effectiveness, consistency, and speed of their endeavors.
Second Quarter 2023 Highlights vs. Prior Year Period
- Net sales decreased to $63.1 million compared to $97.5 million.
- Gross Profit increased to $14.5 million compared to $7.3 million. Gross Profit Margin increased to 23.0% of net sales compared to 7.5%.
- Adjusted Gross Profit(1) increased to $17.0 million compared to $9.1 million. Adjusted Gross Profit Margin(1) increased to 27.0% of net sales compared to 9.3%.
- Net loss was $12.9 million compared to net loss of $203.3 million.
- Adjusted EBITDA(1) increased to $2.5 million compared to $(6.8) million.
- Cash from operating activities of $9.9 million and Free Cash Flow(1) of $8.3 million.
Updated Full Year 2023 Outlook
- Net sales of approximately $230 million to $240 million.
- Adjusted EBITDA(1) that is modestly positive.
- Positive Free Cash Flow(1).
HYFM Stock Performance
HYFM stock closed at $1.25 on September 27th, up 38.89% in the last month of trading. At present, HYFM stock has a 52-week price range of $0.6720-$3.25, down 19.35% year to date. According to analysts at CNN Business, HYFM stock has a 12-month median price target of $1.25. In this case, this would represent an increase of 2% from its last trading price of $1.25.
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Agrify Corporation
Agrify Corporation, based in the US, offers trustworthy equipment and software to the indoor farming sector. The company offers vertical farming systems, integrated grow racks, and LED grow lights. Organizations may operate at the highest levels of dependability, effectiveness, and quality at the lowest possible cost, thanks to Agrify’s innovative software and technology solutions. Among the services the business offers are consulting, engineering, and construction. The business recently acquired Precision Extraction Solutions and Cascade Sciences, two well-known suppliers of equipment and services for analyzing, processing, and extracting hemp and cannabis. The business invested $10 million in Lab Society in February, a leader in the extraction, distillation, and solvent separation of cannabis.
Revenue at Agrify decreased from $15.8 million in 2021 to $7.0 million in the third quarter of 2022. Revenue climbed by 51.4% this year, from $34.6 million to $52.4 million. The third-quarter gross loss was $(4.1) million, or (58.6%) of revenue, compared to $(380) thousand, or (2.4%) in the previous year’s same period. Gross profit (loss) for the most recent quarter was $1.7 million, or 3.2% of revenue, compared to $393 thousand, or (1.1%) of revenue in the prior year-to-date quarter. In fiscal year 2022, Agrify expects adjusted revenues of $65 million to $70 million. In July, the company did a 1-20 reverse stock split. The stock split aims to boost the Company’s per-share price to meet Nasdaq’s listing bid price requirement.
AGFY Stock Performance
AGFY stock closed on September 27th at $2.21, down 8.30% in the past month of trading. The stock has a range of $2.00-$416 and is down 66.82% year to date. According to analysts at CNN Business, AGFY stock has a median price target of $33.50 per share. In this case, this would represent an upside of 1409.01% from its last trading price of $2.21.
Ancillary Cannabis Stocks for Smart Investors
As October 2023 approaches, highlighted ancillary marijuana stocks offer compelling opportunities in the thriving cannabis industry due to global growth projections. These companies provide essential equipment and services for cultivators, positioning them to meet increasing demand. From hydroponic pioneers to nutrient suppliers, they’ll shape the cannabis sector’s future. Don’t disregard these promising stocks in your investment strategy; they could yield substantial returns soon.
However, it’s crucial to remember that investing in the stock market, especially in a dynamic industry like cannabis, carries inherent risks. Before making any investment decisions, conducting thorough research, diversifying your portfolio, and consulting with financial professionals if needed are wise. With due diligence and strategic planning, these top ancillary marijuana stocks could become valuable assets in your investment portfolio, contributing to your long-term financial success.
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