Top Ancillary Cannabis Stocks to Watch in February 2026
The cannabis sector continues to evolve as 2026 begins. While plant-touching operators still face regulatory pressure, ancillary companies remain better positioned. These businesses do not grow or sell cannabis directly. Instead, they provide the tools, products, and infrastructure that the industry depends on. As a result, they often carry less regulatory risk. They also tend to survive market downturns more effectively.
Moreover, ancillary cannabis stocks can benefit regardless of which operators win market share. Every grower still needs lighting, nutrients, and cultivation systems. Therefore, demand can persist even during slower expansion cycles. This dynamic makes ancillary names attractive for both traders and longer-term investors.
Heading into February 2026, investors are watching for improving margins and cost discipline. Many ancillary companies spent recent years restructuring. Others focused on strengthening balance sheets. Now, with early signs of stabilization across the cannabis supply chain, several names stand out again.
GrowGeneration, Hydrofarm, and Scotts Miracle-Gro each represent a different ancillary angle. GrowGeneration focuses on retail and proprietary cultivation brands. Hydrofarm operates as a manufacturer and distributor of grow equipment. Scotts Miracle-Gro offers a larger, diversified platform with indirect cannabis exposure. Together, they provide varied risk profiles and potential opportunities.
Below is a closer look at each company. Each section begins with an overview of operations and market presence. Then, it transitions into a discussion of recent financial performance. This structure helps investors evaluate both business quality and current execution.
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Top Cannabis Ancillary Plays Investors Are Watching in Early 2026
- GrowGeneration (NASDAQ: GRWG)
- Hydrofarm Holdings Group (NASDAQ: HYFM)
- The Scotts Miracle-Gro Company (NASDAQ: SMG)
GrowGeneration (GRWG)
GrowGeneration is a leading retailer of hydroponic and cultivation supplies. The company serves both commercial cultivators and home growers. Importantly, it does not operate cannabis dispensaries. Instead, it supports the cultivation side of the industry. This allows it to benefit from long-term production demand.
GrowGeneration’s largest U.S. presence comes from its retail store network. As of late 2025, the company operated twenty-four locations across eleven states. These stores supply lighting, nutrients, grow media, and environmental controls. In addition, the company sells products through online and business-to-business channels. This expands reach beyond physical locations.
Meanwhile, GrowGeneration has emphasized proprietary brands. This strategy supports higher margins and customer loyalty. As a result, the company has reduced its reliance on third-party products. Over time, this can stabilize earnings during slower industry periods. Therefore, GrowGeneration remains a core ancillary name to watch.
From a financial perspective, recent performance showed improvement. Revenue increased sequentially during the most recent quarter. This reflected stronger demand and better inventory management. At the same time, gross margins expanded meaningfully. That improvement came from cost controls and higher proprietary brand sales.
Net losses also narrowed compared to the prior year. Adjusted EBITDA turned positive again. This was an important milestone for investors. Even better, the balance sheet remained strong. The company held a significant cash position and had no long-term debt.
Looking ahead, management expects continued revenue growth in 2026. Profitability is also expected to improve. Consequently, GRWG remains a turnaround-style ancillary stock worth monitoring closely.
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Hydrofarm Holdings Group (HYFM)
Hydrofarm is a manufacturer and distributor of hydroponic equipment and supplies. The company focuses on lighting, climate systems, and grow accessories. Like GrowGeneration, it does not operate cannabis dispensaries. Its dispensary count is zero. Instead, it sells directly into the cultivation supply chain.
Hydrofarm’s products support indoor and greenhouse growing environments. This positioning provides leverage when cultivation activity rebounds. However, it also exposes the company to inventory cycles. As a result, HYFM tends to be more volatile.
Recent financial results reflected ongoing pressure. Revenue declined year over year during the latest reported quarter. This was driven by softer industry demand and customer destocking. Gross margins also compressed compared to prior periods.
Net losses widened, and adjusted EBITDA remained negative. However, management emphasized progress on restructuring efforts. Operating expenses declined year over year. That reduction helps preserve cash and extend the company’s runway.
Importantly, Hydrofarm continues to streamline its product portfolio. It is also reducing overhead and improving supply chain efficiency. These actions aim to position the company for operating leverage. If cultivation spending stabilizes, margins could rebound quickly.
Because of this setup, HYFM carries a higher risk. However, it also offers a higher potential reward. For traders, the stock may respond sharply to improving industry data. Therefore, Hydrofarm remains a speculative ancillary name to keep on watchlists.
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The Scotts Miracle-Gro Company (SMG)
Scotts Miracle-Gro is best known for consumer lawn and garden products. However, it has also played a major role in the cannabis supply chain. That exposure historically came through its Hawthorne Gardening business. Like the others, Scotts does not operate cannabis dispensaries.
Entering 2026, Scotts significantly shifted its strategy. The company moved to sell its Hawthorne division. This marked a step away from direct cannabis-related operations. As a result, Scotts now represents indirect and legacy ancillary exposure.
Financially, recent results reflected this transition. Revenue from continuing operations remained substantial. Gross margins stayed stable. However, discontinued operations weighed on overall results. These losses were tied to restructuring and exit costs.
Despite that, the strategic clarity may benefit shareholders. By refocusing on core consumer businesses, Scotts can generate steadier cash flow. At the same time, any retained exposure to cannabis infrastructure offers optional upside.
For investors, SMG represents the conservative ancillary option. It carries lower volatility than pure cannabis plays. It also benefits from a long operating history. Therefore, Scotts remains relevant for investors seeking stability with limited cannabis exposure.
Final Thoughts
Ancillary cannabis stocks offer unique opportunities heading into February 2026. GrowGeneration offers turnaround potential as fundamentals improve. Hydrofarm offers higher-beta exposure to a cultivation rebound. Scotts Miracle-Gro delivers defensive positioning with optional cannabis upside.
Together, these three names highlight different ways to approach the sector. For investors focused on risk management and diversification, ancillary stocks remain worth watching closely in early 2026.
MAPH Enterprises, LLC | (305) 414-0128 | 1501 Venera Ave, Coral Gables, FL 33146 | new@marijuanastocks.com
