3 Top Ancillary Cannabis Stocks to Watch in July 2026
The cannabis industry continues evolving across the United States. However, not every successful cannabis company grows or sells marijuana. Instead, many businesses support the industry through equipment, technology, and cultivation supplies. These businesses are commonly known as ancillary cannabis companies. They provide products and services that licensed cannabis operators need every day. As a result, they benefit from industry expansion without handling the cannabis plant itself.
Ancillary cannabis companies occupy an important position within the legal marijuana market. They sell hydroponic equipment, lighting systems, nutrients, irrigation products, environmental controls, and gardening supplies. Additionally, some companies provide software, packaging, security, and compliance services. Every cultivation facility depends on reliable suppliers to maintain efficient operations. Therefore, ancillary businesses remain essential to the industry’s long-term growth.
Ancillary Stocks Positioned for Growth
Unlike multi-state operators, ancillary companies avoid many federal restrictions. Most can list their shares on major U.S. exchanges, including the Nasdaq and New York Stock Exchange. Consequently, they often attract institutional investors who cannot purchase plant-touching cannabis businesses. They also enjoy broader access to traditional banking services and capital markets. Those advantages can support stronger balance sheets and greater financial flexibility.
The sector experienced significant challenges over the past several years. High interest rates slowed expansion plans across the cannabis industry. Furthermore, falling wholesale cannabis prices reduced cultivation spending. Many growers delayed purchasing new equipment. As a result, ancillary companies focused heavily on reducing costs and improving operational efficiency. Several businesses also streamlined inventories and strengthened their balance sheets during this period.
Now, industry conditions appear to be gradually improving. More states continue expanding legal cannabis programs. Existing operators are also investing in automation and more efficient cultivation methods. Additionally, expectations surrounding potential federal cannabis reform continue to support long-term investor optimism. If capital spending increases again, ancillary suppliers could benefit before many plant-touching operators.
Investors seeking cannabis exposure with potentially lower regulatory risk often consider ancillary companies. These businesses offer diversified revenue streams while supporting the industry’s infrastructure. Three companies stand out during July 2026. GrowGeneration, Hydrofarm Holdings Group, and Scotts Miracle-Gro each provide unique opportunities. Furthermore, each company continues positioning itself for the next phase of cannabis industry growth.
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3 Top Marijuana Stocks to Watch in July 2026
- GrowGeneration (NASDAQ: GRWG)
- Hydrofarm Holdings Group (NASDAQ: HYFM)
- Scotts Miracle-Gro (NYSE: SMG)
GrowGeneration (NASDAQ: GRWG)
GrowGeneration remains one of the largest cannabis supply companies in the United States. Unlike cannabis operators, it does not sell marijuana directly. Instead, it supplies cultivation equipment and hydroponic products. Therefore, the company benefits from industry growth without touching the plant. GrowGeneration serves commercial cultivators and home growers nationwide. It also sells lighting, nutrients, irrigation systems, and environmental controls. Furthermore, its private-label brands continue expanding across multiple product categories. The company currently operates 19 retail locations across nine states.
Its strongest presence remains in California and Colorado. Those markets continue supporting commercial cannabis cultivation. Additionally, GrowGeneration has built a growing online business. Commercial customers also purchase products through its dedicated B2B platform. Management continues to reduce costs while focusing on higher-margin products. As a result, the company has become leaner and more efficient. Investors continue watching GrowGeneration because it offers exposure to cannabis cultivation infrastructure. If industry expansion accelerates, demand for cultivation equipment could increase significantly. Consequently, GrowGeneration remains a popular ancillary cannabis stock.
During the first quarter of 2026, GrowGeneration reported encouraging financial improvements. Revenue increased 7.5% year over year to $38.4 million. Commercial B2B sales drove much of that growth. Meanwhile, proprietary brands represented 37% of cultivation sales. That percentage continues climbing steadily. Gross profit remained stable at $9.7 million. However, margins declined slightly as durable equipment sales increased. Operating expenses fell sharply after multiple cost reductions. Consequently, net loss improved to $4.9 million from $9.4 million last year. Adjusted EBITDA also improved substantially. Furthermore, GrowGeneration finished the quarter with $41.1 million in cash and no debt. Management expects stronger performance during the outdoor growing season. It also forecasts continued revenue growth throughout 2026. Therefore, investors remain optimistic about the company’s improving profitability and stronger balance sheet.
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Hydrofarm Holdings Group (NASDAQ: HYFM)
Hydrofarm remains another leading supplier serving the cannabis cultivation industry. Similar to GrowGeneration, the company operates as an ancillary cannabis business. It provides cultivation equipment instead of selling marijuana products. Hydrofarm offers lighting, climate systems, nutrients, growing media, and hydroponic supplies. Furthermore, its portfolio includes several respected cultivation brands. The company serves both commercial cultivators and hobby growers. California continues to represent one of Hydrofarm’s largest operating markets. Additionally, the company maintains distribution facilities across the United States and Canada. Management continues restructuring operations after challenging industry conditions. Those efforts focus on improving profitability and strengthening cash flow. Hydrofarm also continues expanding its premium product offerings. Consequently, the company hopes to capture a larger market share as cannabis cultivation recovers. Investors often view Hydrofarm as a long-term recovery opportunity. Future cannabis legalization could significantly increase demand for equipment. Therefore, HYFM remains a stock worth monitoring during July 2026.
Hydrofarm continues to focus heavily on operational improvements and expense reductions. Recent quarterly results reflected ongoing stabilization across several business segments. Revenue remained under pressure because commercial cultivation spending stayed cautious. However, management continued to aggressively lower operating expenses. Gross margins also improved through stronger inventory management and better pricing discipline. Furthermore, the company generated stronger cash flow than in previous periods. Inventory levels also declined as management streamlined operations. Those efforts strengthened the company’s overall financial position. Leadership expects gradual improvements in demand throughout the remainder of 2026. Additionally, cost-saving initiatives should continue supporting future profitability. While challenges remain, Hydrofarm appears positioned for a stronger recovery cycle. Consequently, investors continue watching HYFM for signs of improving revenue trends and sustained margin expansion.
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Scotts Miracle-Gro (NYSE: SMG)
Scotts Miracle-Gro remains a household name in lawn and garden products. However, many investors overlook its cannabis exposure. The company’s Hawthorne Gardening division supplies commercial cannabis cultivators nationwide. Hawthorne sells lighting, nutrients, growing systems, and environmental equipment. Therefore, Scotts benefits from cannabis cultivation without directly producing marijuana. The company’s traditional consumer lawn business provides additional revenue stability. Furthermore, Scotts serves customers across every major U.S. market. Hawthorne maintains particularly strong relationships with large commercial cultivators. California remains one of its largest cannabis-related markets. Management continues investing strategically in its cultivation supply business. Meanwhile, the consumer gardening division generates substantial recurring cash flow. That combination gives Scotts greater financial stability than many cannabis companies. Investors seeking lower-risk cannabis exposure often consider SMG. Consequently, the stock remains attractive during periods of industry uncertainty.
Scotts Miracle-Gro recently reported improving financial performance across several business segments. Consumer lawn and garden demand remained healthy during the latest quarter. Meanwhile, Hawthorne continued benefiting from operational improvements. Revenue trends stabilized after several difficult years. Additionally, management continued to reduce operating expenses and improve efficiency. Gross margins also expanded through pricing improvements and disciplined cost management. Cash flow remained strong throughout the reporting period. The company also continued paying its regular dividend. Furthermore, management expressed confidence in long-term growth in the cannabis industry. Hawthorne remains positioned to benefit when cultivation spending accelerates again. Scotts continues to maintain a strong balance sheet while supporting future investments. Therefore, SMG remains one of the most diversified cannabis-related investment opportunities available today. Investors seeking stability alongside cannabis exposure should continue monitoring this established industry
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