Supporting the Boom: Top Ancillary Cannabis Stocks to Monitor This Week
The ancillary cannabis sector continues to attract attention as market conditions shift. The U.S. cannabis industry is expected to reach $45 billion in sales by 2025. Growth remains steady, with projections calling for double-digit annual gains through 2030. Ancillary companies benefit by supporting cultivators and retailers without touching the plant. They provide hydroponic systems, lighting, packaging, and security services. As demand rises, these support businesses become more essential. Traders are also using technical analysis to identify breakout opportunities. Moving averages, support levels, and volume spikes help confirm strong setups. Many stocks are forming bullish consolidations. However, using proper risk management is key. Setting stop-loss orders and managing position size protects against large losses. These tools help traders stay disciplined. With momentum building and the broader market stabilizing, this week may offer compelling opportunities in the ancillary space.
Recent cannabis news adds fuel to investor interest. More states are passing medical and recreational laws, expanding the legal footprint. Just last week, a new state approved medical use, pushing the total past 40 nationwide. At the same time, others are forming commissions to study full legalization. While federal reform remains slow, state-level progress keeps pushing the industry forward. Ancillary stocks are positioned to benefit from this growth without facing heavy regulation. Their role is vital yet lower-risk. Traders are also watching for news-driven price action.
U.S. Cannabis Market Growth
When legislation headlines appear, stocks can break key resistance zones. Combining technical patterns with catalysts creates high-probability setups. Still, it’s important to use discipline. Chasing spikes without a plan often leads to losses. By pairing technical entries with sound risk controls, traders can capture upside while managing downside. As momentum builds, these ancillary cannabis names deserve close attention.
As the U.S. cannabis market grows, ancillary companies continue to support its backbone. These businesses do not sell cannabis directly. Instead, they supply cultivation products, hydroponics, packaging, and infrastructure. This sector offers investors lower regulatory risks while still capturing cannabis-driven growth. Before July 2025, three ancillary stocks stand out: GrowGeneration Corp. (GRWG), Hydrofarm Holdings Group Inc. (HYFM), and The Scotts Miracle-Gro Company (SMG), specifically through its Hawthorne Gardening division.
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Top Ancillary Cannabis Stocks to Watch Before July 2025
- GrowGeneration Corp. (NASDAQ: GRWG)
- Hydrofarm Holdings Group Inc. (NASDAQ: HYFM)
- The Scotts Miracle-Gro Company (NYSE: SMG)—Hawthorne Gardening
GrowGeneration Corp. (GRWG)
GrowGeneration operates the largest chain of hydroponic and organic gardening centers in the United States. The company owns and manages 31 retail and distribution centers across 12 states. Its largest presence is in California, where cannabis cultivation is widespread. Other key markets include Colorado, Oregon, and Florida. While it does not operate dispensaries, it supplies them with a wide range of growing equipment. These include lighting systems, nutrients, climate controls, and custom soil blends. GrowGeneration supports both home growers and large-scale cannabis operations. It continues to expand its reach through acquisitions and in-house product lines.
In the most recent quarter, GrowGeneration reported net sales of $35.7 million. This represented a slight year-over-year decline due to a slowdown in industry-wide cultivation. Despite this, gross margins increased to 27.2 percent, reflecting improved inventory management and a greater share of proprietary product sales. These in-house brands now make up over 30 percent of revenue. The company also reduced operating expenses by 17 percent, helping manage overall losses. It posted a net loss of $9.4 million, but ended the quarter with $52.6 million in cash and no long-term debt. Management expressed optimism for future quarters and expects stronger revenue performance and improving profitability going forward. Efficiency and positioning remain strong even amid temporary industry softness.
Hydrofarm Holdings Group Inc. (HYFM)
Hydrofarm manufactures and distributes advanced hydroponic equipment. It focuses heavily on the indoor and greenhouse cultivation space. While it does not sell cannabis itself, its products are vital for growers. Hydrofarm offers lighting systems, ventilation equipment, nutrients, and water filtration technologies. It supports both commercial cannabis cultivators and traditional growers. The company has a broad national footprint, with strategically located warehouses and distribution centers across the country. This ensures fast delivery and strong customer support. It also owns a range of proprietary product lines that differentiate it in a competitive space.
In its most recent earnings report, Hydrofarm announced net sales of $40.5 million. This marked a 25 percent decline compared to the prior year, driven by reduced spending from large-scale cultivators. Gross margins fell to 17 percent, pressured by higher input costs and lower product volume. However, the company made internal improvements by reducing its adjusted operating costs. It cut SG&A expenses by nearly 10 percent year over year. Despite these efforts, it reported a net loss of $14.4 million, largely due to restructuring charges. Nonetheless, the company continues to improve inventory management and cost controls. It remains focused on returning to profitability. Hydrofarm’s focus on proprietary products and efficiency may lead to stronger quarters ahead.
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The Scotts Miracle-Gro Company (SMG) – Hawthorne Gardening
The Scotts Miracle-Gro Company is widely known for lawn and garden products. However, its Hawthorne Gardening subsidiary makes it a powerful ancillary cannabis player. Hawthorne supplies cannabis cultivators with high-performance hydroponic systems, lighting equipment, nutrients, and growing media. The division serves many of the largest multi-state operators in the U.S. It does not touch cannabis directly, but it enables large cultivation facilities to operate efficiently. Hawthorne has become a recognized brand in cannabis infrastructure. This dual structure allows Scotts to benefit from both traditional gardening and the cannabis boom.
Financially, Hawthorne’s revenue was flat year over year in its latest quarter. However, gross margins improved slightly thanks to better supply chain planning and product mix. The company also made progress in reducing overhead, improving operational discipline across the division. Adjusted EBITDA for Hawthorne showed year-over-year improvement, signaling financial stabilization. Meanwhile, the broader Scotts Miracle-Gro business faced challenges in its consumer lawn segment. This weighed on consolidated performance. Despite this, Hawthorne’s consistent results provided a reliable offset. Management reaffirmed long-term growth expectations and plans to reinvest in higher-margin categories. As cannabis cultivation demand grows, Hawthorne remains positioned as a core infrastructure provider.
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From Grow Lights to Gains: Ancillary Cannabis Stocks Worth Watching
These three ancillary cannabis stocks each offer unique exposure to the industry’s growing backbone. GrowGeneration continues to expand its hydroponics retail footprint while maintaining cost control. Hydrofarm, although challenged by macro softness, is improving operations and enhancing its proprietary lineup. Meanwhile, Scotts Miracle-Gro’s Hawthorne division benefits from its well-established supply relationships with large-scale growers. Each company is adjusting to the industry’s evolution in its own way. However, they share a common role as essential providers of infrastructure. With federal cannabis reform still under discussion, many investors prefer ancillary plays due to lower legal risks. As the summer approaches, these three names could show upside potential, especially if cultivation activity rebounds. Watching their earnings, margin trends, and operational shifts will be key before July 2025.
MAPH Enterprises, LLC | (305) 414-0128 | 1501 Venera Ave, Coral Gables, FL 33146 | new@marijuanastocks.com
