Investing In Marijuana Stocks In September 2021
There are many ways to invest in marijuana stocks in 2021. Most cannabis stocks are known for being some of the more volatile stocks in the market. But for the long-term investor, there are options that have shown more stability. For the past few years, ancillary marijuana stocks have seen significant upside in the market. Ancillary cannabis companies are those companies that support the cannabis industry without touching the actual plant. Some of these companies are well-positioned to grow alongside the cannabis industry as the market grows.
One area involves companies that provide the hydroponic, lighting, and organic nutrients needed to grow cannabis. In the US leading companies have continued to expand their footprint across the country as new cannabis markets are created. During their most recent earnings, these companies are showing significant revenue growth.
In the next five years, the cannabis industry is predicted to more than double in size in terms of sales. According to Statista, US recreational cannabis sales are forecast to reach $42 billion by 2026. That’s a huge increase from the $18.93 billion in 2020. As the demand for more cannabis is seen in the US the best positioned ancillary companies could see substantial growth.
Top Cannabis Stocks For Long Term Positions
For investors researching these companies thoroughly and doing your due diligence is very important before investing. Studying how a stock moves in the market can help you achieve the best entry for your investment. Currently, some of the best pot stocks to buy are trading close to their lowest price points in 2021. Generally, this could be a good opportunity to watch how these cannabis stocks continue to behave in the market going into September. In the US and Canada, demand is increasing as the market grows.
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In the event, Congress introduces legislation that gives the cannabis industry the reform it needs the sector could see significant upside. The hydroponic gardening business continues to be one of the main ways growers cultivate cannabis. As We head into September let’s look at 2 ancillary marijuana stocks to add to your list in September 2021.
Top Cannabis Stocks September 2021
- Hydrofarm Holdings Group, Inc. (NASDAQ: HYFM)
- GrowGeneration Corp. (NASDAQ: GRWG)
Hydrofarm Holdings Group, Inc.
Hydrofarm Holdings Group, Inc. is a leading distributor and manufacturer of hydroponics equipment and supplies for controlled environment agriculture. Primarily, the company offers an extensive variety of equipment that facilitates the cannabis growing process. In general, the company offers high-intensity grow lights, climate control solutions, and growing media, as well as a broad portfolio of innovative and proprietary branded products. For some history, Hydrofarms has been in business for over 40 years helping growers in the US and Canada achieve premium-quality farming products.
On August 12th Hydrofarm reported its second-quarter 2021 results with net sales of $133.8 million up 46.7% year over year. In addition, gross profits increased 65% to $29.6 million or 22.1% of net sales. The companies adjusted EBITDA increased 127.5% to $16.2 million. In July the company announced it completed the acquisition of Aurora Innovations and its organic nutrients and grow media operations. On August 3rd the company announced the acquisition of a leading Canadian nutrient company Greenstar Plant Products, Inc. This acquisition continues Hydrofarms efforts manufacture of branded products in key CEA categories.
HYFM Stock Performance
HYFM stock is trading at $49.00 on August 30th up 14.50% in the past five trading days. The stock has a 52-week price range of $40.38-$95.48 and is down 6.43% year to date. According to analysts at CNN Business HYFM stock has a 12-month median price target of $69.50 per share. In essence, this would represent a gain of 42% from its current trading price of $49.00. For this reason, HYFM stock could be one of the best ancillary marijuana stocks to add to your watchlist for September.
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GrowGeneration Corp
GrowGeneration Corp. is a leading owner and operator of retail hydroponic and organic gardening stores across the US. Currently, the company markets and distributes organics, lighting, and hydroponic equipment mainly used by cannabis cultivators. GrowGen has 60 organic garden centers across 12 states recently opening its 6th store in Michigan. To close August the company acquired Commercial Grow Supply to strengthen its footprint in southern California. In addition, the company has also been working on its online presence with the launch of GrowGeneration.com. Recently, the company launched a newly redesigned e-commerce platform. The site is a one-stop-e-commerce destination with over 10,000 products ranging from nutrients to lighting technology. In the next five years, the company is expecting to have over 100 locations operating in the US.
On August 12th GrowGen reported second-quarter 2021 financials with record revenue of $125.9 million up 190% year over year. The company delivered a net income of $6.7 million and adjusted EBITDA of $14.5 million. In addition, the company raised its revenue guidance in 2021 to $455-$475 million. In detail, the company experienced a comparable store sales increase of 60% from the prior year. Although GrowGen delivered strong revenue growth GRWG stock saw the sharpest selloff of all ancillary marijuana stocks.
GRWG Stock Performance
GRWG stock is trading at $30.55 on August 30th up 5.66% on the past five days of trading. The stock has a 52-week price range of $13.11-$67.75 and is down 22.53% year to date. According to analysts at Tip Ranks GRWG stock has a 12-month average price target of $56.60 per share. Currently, this would represent an upside of 85.09% from its current trading price of $30.55. With this in mind, GRWG stock could be one of the best cannabis stocks for your list this week.
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