Industry Overview - The cannabis market is experiencing significant volatility, with publicly traded companies showing unpredictable trading patterns. Despite this, investors continue to find profit opportunities [1]. - Long-term investing is currently emphasized, particularly with anticipated reforms and regulatory changes expected in 2026, which could impact trading strategies [2][3]. Company Highlights - **GrowGeneration Corp.** operates retail hydroponic and organic gardening stores in the U.S. and is positioned to benefit from the evolving cannabis market [4]. - **Hydrofarm Holdings Group, Inc.** manufactures and distributes hydroponics equipment and supplies for controlled environment agriculture in the U.S. and Canada, indicating a strong presence in the cannabis supply chain [5]. Financial Performance - MAPH Enterprises, LLC reported a decrease in net sales to $29.4 million from $44.0 million, with a gross profit margin decline to 11.6% from 19.4%. The adjusted gross profit margin also fell to 18.8% from 24.3% [8]. - The company experienced an increase in net loss to $16.4 million compared to $13.1 million, while adjusted EBITDA was reported at $(4.4) million, indicating financial challenges [8].

Industry Overview - The marijuana sector is currently experiencing significant volatility, making it challenging for shareholders despite some legal operators showing profitability [1][2] - There is speculation about the future of the industry, with some investors considering selling their positions while others see long-term opportunities [2] Future Outlook - The next potential growth phase for marijuana stocks is anticipated around 2026, with preparation being crucial for potential gains [3] - A trading plan is recommended to navigate the unpredictable nature of the sector [3] Key Companies to Watch - **GrowGeneration Corp.**: Operates retail hydroponic and organic gardening stores in the U.S. and will exhibit at the Indoor Ag-Con 2026 Conference in Las Vegas [4] - **Hydrofarm Holdings Group, Inc.**: Manufactures and distributes hydroponics equipment in the U.S. and Canada, with no recent updates since its Q3 2025 earnings report [5] - **The Scotts Miracle-Gro Company**: Engages in the manufacture and sale of gardening products, reporting a decrease in net sales to $29.4 million from $44.0 million, and an increase in net loss to $16.4 million compared to $13.1 million [10][11]

Core Viewpoint - GrowGeneration Corp. is set to exhibit at the Indoor Ag-Con 2026 Conference, showcasing its partnership with Netafim to enhance support for growers transitioning to controlled environment agriculture [1][2]. Company Overview - GrowGeneration Corp. is one of the largest suppliers of specialty products for controlled environment agriculture (CEA), commercial cultivation, and retail garden centers, offering thousands of products including nutrients, additives, and environmental control systems [6]. - The company operates an online superstore and a wholesale business, providing a wide range of proprietary brands such as Char Coir, Drip Hydro, and Ion Lights [6]. Partnership with Netafim - The partnership with Netafim, the world's largest irrigation company, aims to deliver integrated solutions for growers, focusing on education, commercial support, and CEA solution deployments [1][2]. - This collaboration will provide growers with access to advanced fertigation, water management, and integrated systems to facilitate the transition from open-field to controlled environments [2]. Product Offerings - GrowGeneration will showcase a broad portfolio of proprietary brands and integrated solutions at the conference, including: - Integrated fertigation, substrate, and nutrient programs [4]. - Co-branded technical education and commercial grower workshops [4]. - Advanced LED lighting solutions designed for enhanced crop yield and quality [4]. - Specific products highlighted include: - Char Coir, a high-grade coco substrate [4]. - Drip Hydro, a complete nutrient solution developed for ease of use and productivity [4]. - Ion Lights, advanced LED fixtures for improved flowering and canopy development [4]. Conference Details - The Indoor Ag-Con 2026 will take place on February 11-12, 2026, at the Westgate Las Vegas Resort & Casino, where GrowGeneration will have a booth to engage with commercial operators, attendees, and investors [1][3].

Core Insights - GrowGeneration Corp. is one of the largest suppliers of specialty products for controlled environment agriculture (CEA), commercial cultivation, and retail garden centers in the United States [3] Event Participation - GrowGeneration will participate in the IgniteIt Spotlight: New Jersey event on February 10, 2026, in Jersey City, New Jersey [1] - David Todd, the Vice President of Enterprise Solutions at GrowGeneration, will be part of a panel discussion titled "The Plant Matters: How Genetics, Terpenes and Cultivation Strategy Drive Market Advantage" at 10:30 a.m. Eastern Time on the same day [2] Product Offerings - The company offers a wide range of products including nutrients, additives, growing media, lighting, environmental control systems, and proprietary brands such as Char Coir, Drip Hydro, and Power Si [3] - GrowGeneration operates an online superstore for cultivators and has a wholesale business for resellers, as well as a benching, racking, and storage solutions business called Mobile Media or MMI [3]

Core Insights - The cannabis sector is evolving, with ancillary companies better positioned than plant-touching operators due to lower regulatory risks and better resilience during market downturns [1][2] - Ancillary cannabis stocks can benefit from consistent demand for cultivation supplies, regardless of which operators gain market share [2] - Investors are focusing on improving margins and cost discipline as ancillary companies restructure and strengthen their balance sheets [3] Company Summaries GrowGeneration (GRWG) - GrowGeneration is a leading retailer of hydroponic and cultivation supplies, serving both commercial cultivators and home growers without operating cannabis dispensaries [5][9] - As of late 2025, GrowGeneration operated 24 locations across 11 states, offering a range of products through both physical and online channels [7] - Recent financial performance showed revenue growth, improved gross margins, and a narrowing of net losses, with management expecting continued revenue growth in 2026 [9][10] Hydrofarm Holdings Group (HYFM) - Hydrofarm manufactures and distributes hydroponic equipment and supplies, focusing on lighting and climate systems without operating dispensaries [11][13] - Recent financial results indicated a year-over-year revenue decline due to softer industry demand, but management is working on restructuring and improving supply chain efficiency [13][14] - Hydrofarm carries higher risk but also offers higher potential rewards, making it a speculative option for traders [15] The Scotts Miracle-Gro Company (SMG) - Scotts Miracle-Gro is known for consumer lawn and garden products and has historically been involved in the cannabis supply chain through its Hawthorne Gardening business [16][18] - The company has shifted its strategy by selling its Hawthorne division, focusing on core consumer businesses while retaining some indirect cannabis exposure [18][19] - Financial results reflect this transition, with stable gross margins and a focus on generating steadier cash flow, making it a conservative option for investors [19] Final Thoughts - Ancillary cannabis stocks present unique opportunities, with GrowGeneration showing turnaround potential, Hydrofarm offering higher-beta exposure, and Scotts Miracle-Gro providing defensive positioning [20]

Core Insights - The cannabis industry is evolving with a focus on efficiency, margin recovery, and balance sheet strength as operators adapt to tighter capital markets and shifting regulations [2][19] - Ancillary cannabis stocks provide alternative exposure to the industry, supporting it without directly selling cannabis, thus avoiding many regulatory risks while benefiting from cultivation and retail improvements [1][19] Industry Trends - Growers are upgrading equipment, improving yields, and cutting costs instead of reckless expansion, favoring well-positioned ancillary suppliers [2] - Federal reform discussions create volatility, but the demand for essential products like nutrients and lighting remains consistent, offering attractive risk-reward setups for investors [3][19] Company Summaries GrowGeneration (GRWG) - GrowGeneration is a leading hydroponics and cultivation supply company, serving cannabis growers with essential products like lighting, nutrients, and climate control [5][7] - The company has shown signs of stabilization with sequential revenue improvement and expanded gross margins, marking a return to positive adjusted EBITDA [9][10] - Key focus for GRWG is on margin sustainability and potential earnings amplification with a modest rebound in cultivation spending [10] Hydrofarm Holdings Group (HYFM) - Hydrofarm is a distributor focused on controlled environment agriculture, providing essential tools for indoor cannabis cultivation [10][11] - The company has faced revenue declines and compressed gross margins due to reduced capital expenditures from growers, but it has made progress in reducing operating expenses [11] - Investors should monitor revenue stabilization, as even flat sales could improve cash flow if costs are controlled [12] The Scotts Miracle-Gro Company (SMG) - Scotts is known for lawn and garden products but has exposure to cannabis through its Hawthorne Gardening division, which supplies hydroponic equipment [14][16] - The decision to divest Hawthorne simplifies the business and reduces cannabis-related volatility, allowing a focus on its core consumer segment [16] - Financially, Scotts has shown improving margins and prioritized debt reduction, making it a lower-risk option for investors seeking stability [17][18] Investment Considerations - Ancillary stocks are critical to the cannabis ecosystem, as growers rely on supplies and systems [22] - Each highlighted company serves different investor profiles, with GrowGeneration focusing on recovery, Hydrofarm offering higher risk and leverage, and Scotts providing stability [20][21]

Core Viewpoint - GrowGeneration Corp. will participate in the Oppenheimer 11th Annual Emerging Growth Conference virtually on February 3-4, 2026, highlighting its position as a leading supplier in the controlled environment agriculture sector [1]. Company Overview - GrowGeneration is one of the largest suppliers of specialty products for controlled environment agriculture (CEA), commercial cultivation, and retail garden centers in the United States [3]. - The company offers a wide range of products, including nutrients, additives, growing media, lighting, environmental control systems, and proprietary brands such as Char Coir, Drip Hydro, and Power Si [3]. - GrowGeneration operates an online superstore for cultivators at growgeneration.com and has a wholesale business for resellers, along with a benching, racking, and storage solutions business called Mobile Media or MMI [3]. Conference Participation - The company will host one-on-one meetings throughout the Oppenheimer conference, providing opportunities for investors and stakeholders to engage directly [2].

Core Insights - The cannabis industry is evolving with increasing legalization in the U.S., and ancillary cannabis companies are emerging as attractive investment opportunities due to fewer regulatory hurdles compared to plant-touching operators [1] Group 1: GrowGeneration Corp. (GRWG) - GrowGeneration Corp. is a leading ancillary cannabis company specializing in hydroponic and organic gardening products for cannabis cultivators, operating over twenty retail and distribution locations across major markets like California, Colorado, and Florida [2] - The company has focused on restructuring and margin improvement, showing stabilizing revenue and improved gross margins due to a higher mix of proprietary brands, while also reducing operating expenses [3] - GrowGeneration reported positive adjusted EBITDA recently, marking a significant milestone, and maintains a strong cash position with minimal debt, providing flexibility during industry downturns [3] Group 2: Hydrofarm Holdings Group, Inc. (HYFM) - Hydrofarm Holdings Group manufactures and distributes hydroponic equipment for commercial growers, with a strong presence in West Coast cannabis markets and a broad product portfolio [6] - The company has faced challenges due to industry oversupply, leading to revenue declines and increased losses, but is focusing on restructuring initiatives to stabilize operations [8] - Despite weaker demand, Hydrofarm's brands retain loyalty among professional cultivators, and its diversification into indoor food production markets provides some revenue insulation [8] Group 3: The Scotts Miracle-Gro Company (SMG) - The Scotts Miracle-Gro Company, known for lawn and garden products, has a division called Hawthorne Gardening that supplies hydroponic growers with essential cultivation technology [9] - While Hawthorne's sales have declined due to slowed cultivation, Scotts remains profitable and cash-generative, supported by its core lawn and garden products [10] - The company generates strong free cash flow and has publicly supported cannabis reform initiatives, which could benefit Hawthorne if federal policies shift favorably [10]

Core Viewpoint - GrowGeneration Corp. will exhibit at the Grow Up Conference & Expo in Vancouver, BC, on January 20-21, 2026, showcasing its proprietary brands and solutions for controlled environment agriculture [1][2]. Company Overview - GrowGeneration is one of the largest suppliers of specialty products for controlled environment agriculture (CEA), commercial cultivation, and retail garden centers, offering thousands of products including nutrients, additives, and environmental control systems [4][6]. - The company operates an online superstore and a wholesale business for resellers, along with providing benching, racking, and storage solutions [4][6]. Event Participation - The participation in the Grow Up Conference & Expo aligns with the company's strategic focus on growth through commercial engagement and brand adoption, allowing direct connections with high-value operators [2]. - GrowGeneration's team will be available for meetings with commercial operators, conference attendees, and investors during the event [3]. Product Portfolio - GrowGeneration will feature several proprietary brands and products at the expo, including: - **Char Coir**: High-grade coco sourced from a single farm, ensuring quality and consistency [5]. - **Drip Hydro**: A complete nutrient solution designed to enhance productivity and yield [5]. - **Ion Lights**: Advanced LED fixtures aimed at improving cannabinoid expression and canopy development [5]. - **PowerSi**: Concentrated additives that enhance plant health and crop quality [5]. - **Dialed In Under Canopy LED lights**: A unique lighting solution for boosting lower-canopy flower development in cannabis cultivation [5]. - **The Harvest Company**: Offers a range of products for home gardening and commercial growing needs [5].

Core Insights - The Zacks Agriculture - Products industry is expected to benefit from stable food demand driven by population growth and consumer preferences for healthier options [1][4] - Innovative agricultural technologies like hydroponics and vertical farming are anticipated to be significant growth drivers for the industry [1][5] Industry Overview - The Zacks Agriculture - Products industry includes companies involved in storing agricultural commodities, distributing ingredients, and farming crops, livestock, and poultry products [3] - Companies in this sector also provide nutrients, advanced lighting systems, and accessories for hydroponic gardening, as well as innovative plant-based health products [3] Demand Trends - Global population is projected to reach 8.5 billion by 2030 and 9.7 billion by 2050, leading to a 50% increase in food demand [4] - Companies are investing in innovation to meet consumer demand for healthier food alternatives, enhancing product and market strategies [4] Technological Innovations - Hydroponics allows for controlled nutrient delivery and faster crop growth, making it popular in cannabis cultivation and vertical farming [5] - Vertical farming minimizes land and water usage, addressing environmental vulnerabilities and food production challenges [5] Cost Management - Industry players are facing rising costs in labor, packaging, and distribution, but have implemented cost-reduction actions to sustain margins [6] - Recent easing of feed prices may help companies engaged in animal products manage production costs [6] Industry Performance - The Zacks Agriculture - Products industry holds a Zacks Industry Rank of 99, placing it in the top 41% of 243 Zacks industries, indicating positive prospects [7][8] - Over the past 12 months, the industry has underperformed, with a decline of 11.9% compared to the S&P 500's increase of 17.9% [9] Valuation Metrics - The industry is currently trading at a trailing 12-month EV/EBITDA ratio of 10.17X, significantly lower than the S&P 500's 18.51X and the Basic Materials sector's 14.62X [12] Company Highlights - **Bunge Global S.A (BG)**: Recently completed a $34 billion merger with Viterra Ltd., enhancing its global agribusiness platform and expected to yield stable cash flows and synergies [14] - BG has a trailing four-quarter earnings surprise of 11.75% and a long-term estimated earnings growth of 5.13%, currently holding a Zacks Rank of 2 (Buy) [15] - **GrowGeneration (GRWG)**: Reported a 15.4% sequential net sales growth in Q3 2025, returning to positive adjusted EBITDA and improving gross margins [21] - GRWG's proprietary brands are expected to contribute significantly to revenue growth, with a focus on acquiring profitable hydroponic garden centers [21][22]