Cannabis Industry Support Leaders: Top Ancillary Stocks for Active Traders
Ancillary cannabis stocks are drawing attention this week as the U.S. cannabis industry continues its rapid expansion. In 2024, the market reached $38.5 billion in total value. Analysts expect it to grow at an annual rate of over 11% through 2030. Sales from both medical and adult-use cannabis are projected to surge in 2025. Additionally, the total economic impact may exceed $120 billion this year. Several new bills are pushing federal lawmakers toward rescheduling cannabis. Meanwhile, states are advancing new legislation to expand access and retail opportunities. These changes offer potential catalysts for stocks supporting the cannabis supply chain. Ancillary companies sell lighting systems, hydroponics, packaging, and security services. Since they don’t touch the plant, they face fewer legal barriers. Still, technical analysis plays a key role. Traders should watch moving averages and momentum levels. Also, risk management is essential. Always limit position sizes and use stop-loss orders.
Ancillary firms stand to benefit as cannabis demand grows across both recreational and medical markets. These companies provide the tools and infrastructure behind every cultivation and retail operation. Unlike growers and dispensaries, they are not subject to strict federal oversight. This gives them more flexibility and nationwide reach. As more states allow cannabis cafes and consumption lounges, supporting businesses will see increased opportunity.
Ancillary Stocks to Track
However, the sector remains volatile. That’s why technical setups matter. Use volume breakouts and support zones to help confirm entries. Don’t rely on hope. Instead, let price action guide your decisions. Traders must be disciplined. Define your risk before entering any trade. Also, consider diversifying across several ancillary names instead of going all in on one. When possible, tighten stop-loss levels to reduce exposure. By combining solid technical setups with smart risk controls, investors can manage uncertainty while positioning for future upside in this fast-evolving space.
As the U.S. cannabis industry continues to mature, ancillary companies remain critical to supporting cultivators and retailers. These businesses provide the tools, nutrients, and systems that allow cannabis to be grown efficiently and at scale. Unlike traditional plant-touching operators, ancillary firms face fewer regulatory hurdles. They can also operate nationally without directly handling the product. In June 2025, three stocks stand out in this space: GrowGeneration Corp. (GRWG), Hydrofarm Holdings Group Inc. (HYFM), and The Scotts Miracle-Gro Company (SMG). Each brings a different approach to supporting cannabis growers while navigating today’s volatile environment. Below is a deeper look at each company’s U.S. presence and financial health.
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Top 3 Ancillary Cannabis Stocks to Watch in June 2025
- GrowGeneration Corp. (NASDAQ: GRWG)
- Hydrofarm Holdings Group Inc. (NASDAQ: HYFM)
- The Scotts Miracle-Gro Company (NASDAQ: SMG)
GrowGeneration Corp. (GRWG)
GrowGeneration is the largest hydroponic and organic garden center chain in the U.S. The company operates 31 retail and distribution locations across 12 states. California is its strongest market, followed by Colorado, Oregon, and Florida. Although GrowGeneration doesn’t own any cannabis dispensaries, it services thousands of cultivation operations. Its reach spans coast to coast, and it provides growers with nutrients, lighting systems, climate control gear, and more. The company also serves home growers, which adds additional market depth. Its network and specialized offerings make it a top supplier in the cannabis supply chain.
In Q1 2025, GrowGeneration reported $35.7 million in net sales. This was a decline from the prior year, as industry-wide headwinds affected demand. However, gross margins increased to 27.2%, showing improved cost efficiency. Proprietary branded products now represent over 30% of sales. Store and operating expenses decreased by 17%, helping limit losses. The company posted a net loss of $9.4 million and an adjusted EBITDA loss of $4 million. Despite these challenges, it ended the quarter with $52.6 million in cash and no debt. Management expects stronger Q2 revenue and a return to modest growth.
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Hydrofarm Holdings Group Inc. (HYFM)
Hydrofarm focuses on manufacturing and distributing hydroponic equipment for indoor and greenhouse growers. The company supplies cannabis cultivators with lights, nutrients, grow media, and environmental control systems. Its branded product lines are widely used in commercial grow operations. While Hydrofarm doesn’t operate dispensaries, it plays a crucial role in the supply chain. The company has facilities across the U.S. and serves cultivators in both mature and emerging cannabis markets. Its relationships with cultivators give it a national footprint without being plant-touching.
In its most recent quarter, Hydrofarm reported $40.5 million in net sales. That represented a 25% drop year-over-year due to softer market conditions. Gross margins declined slightly to 17%, reflecting price pressure and higher input costs. However, adjusted gross profit margins were higher, signaling internal improvements. SG&A expenses were cut by nearly 10%, and the company continues to reduce overhead. The net loss widened to $14.4 million as the company continues to work through restructuring efforts. Adjusted EBITDA also swung to a loss. Free cash flow was negative $12 million, and the company closed the quarter with $13.7 million in cash. Despite these losses, Hydrofarm is focused on streamlining operations for a return to profitability.
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The Scotts Miracle-Gro Company (SMG)
The Scotts Miracle-Gro Company is best known for its lawn care products. However, it also owns Hawthorne Gardening, a major supplier to the cannabis industry. Hawthorne specializes in hydroponic systems, lighting, and plant nutrients. This business unit supports large-scale cannabis cultivators across the country. Unlike its competitors, Scotts operates in both the consumer lawn segment and the cannabis-adjacent space. While the company does not run dispensaries, its presence in cultivation supply makes it a leading ancillary cannabis player. Hawthorne’s scale and access to major retail chains give it a strategic advantage.
In its second fiscal quarter of 2025, Scotts reported $1.42 billion in revenue. While sales fell slightly compared to the previous year, the company maintained healthy margins. Adjusted gross margin came in at nearly 30%. Full-year adjusted EBITDA is projected to be between $570 million and $590 million. Scotts expects $250 million in free cash flow this year. Its long-term plan includes reducing its debt-to-earnings ratio below 3.5x by 2027. Hawthorne may be spun into a separate entity, allowing Scotts to sharpen its focus on core business segments. That potential move could unlock shareholder value and allow investors direct exposure to cannabis infrastructure.
U.S. Cannabis Growth Lifts Ancillary Stocks Into Focus
GrowGeneration, Hydrofarm, and Scotts Miracle-Gro represent three different but vital pieces of the cannabis ecosystem. GrowGeneration stands out for its retail footprint and diverse client base. Hydrofarm is focusing on efficiency as it navigates tough market conditions. Scotts Miracle-Gro brings strong balance sheets and scale, while Hawthorne remains a key player in commercial cultivation support. Each company offers a unique value proposition for investors watching the ancillary cannabis space in June 2025. Although challenges persist, the potential for federal reform and sector recovery remains. For traders and long-term investors alike, these three stocks deserve close attention.
MAPH Enterprises, LLC | (305) 414-0128 | 1501 Venera Ave, Coral Gables, FL 33146 | new@marijuanastocks.com
