Core Viewpoint - Momentum investing focuses on "buying high and selling higher," rather than traditional strategies of buying low and waiting for recovery [1][2] Group 1: Momentum Investing Strategy - Momentum investors often face challenges in determining the right entry point, as stocks can lose momentum when their valuations exceed future growth potential [2] - Investing in bargain stocks that exhibit recent price momentum can be a safer strategy, utilizing tools like the Zacks Momentum Style Score to identify promising stocks [3] Group 2: GrowGeneration (GRWG) Analysis - GrowGeneration (GRWG) has shown significant price momentum, with a four-week price change of 45%, indicating strong investor interest [4] - Over the past 12 weeks, GRWG's stock has gained 33%, and it has a high beta of 3.29, suggesting it moves 229% more than the market [5] - GRWG has a Momentum Score of A, indicating a favorable time to invest based on its momentum characteristics [6] Group 3: Earnings Estimates and Valuation - An upward trend in earnings estimate revisions has contributed to GRWG earning a Zacks Rank 2 (Buy), which is associated with strong momentum effects [7] - GRWG is currently trading at a Price-to-Sales ratio of 0.53, suggesting it is undervalued, as investors pay only 53 cents for each dollar of sales [7] Group 4: Additional Investment Opportunities - Besides GRWG, there are other stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, presenting additional investment opportunities [8] - The Zacks Premium Screens offer over 45 different strategies tailored to help investors find winning stock picks [9]

Industry Overview - The U.S. cannabis industry is projected to generate over $30 billion in annual sales in 2024, with expectations to exceed $50 billion by 2030 due to expanding legalization and rising consumer demand [1] - Recent bipartisan discussions in Congress aim to improve banking access for cannabis businesses, potentially boosting profitability [1] - Ancillary cannabis companies, which provide products and services to cultivators and retailers, benefit from sector growth while avoiding direct plant-touching risks [1][3] Company Highlights - **GrowGeneration (GRWG)**: Operates the largest chain of hydroponic and organic gardening stores in the U.S., reporting net sales of $41 million in Q2 2025, a 14.7% increase from the prior quarter, despite a year-over-year revenue decline [5][8] - **Hydrofarm Holdings Group (HYFM)**: Manufactures and distributes hydroponics equipment, with 2024 revenue of $190.29 million, down 16% from 2023. The company is set to release Q2 2025 results, with a focus on stabilizing revenue [9] - **Scotts Miracle-Gro (SMG)**: Generated approximately $3.55 billion in total revenue in 2024, with a significant improvement in net loss to $34.9 million. The Hawthorne division faced a 35% decline in sales, but the company plans to divest this unit to reduce volatility [10][13] Investment Considerations - Ancillary cannabis stocks like GrowGeneration, Hydrofarm, and Scotts Miracle-Gro provide exposure to the cannabis market while avoiding the complexities of direct sales [14] - GrowGeneration is noted for improving margins and effective cost management, while Hydrofarm is viewed as a watch-and-see opportunity pending upcoming earnings [15] - Scotts Miracle-Gro's planned divestiture of the Hawthorne unit may reshape its market exposure, focusing on core operations for more predictable growth [15]

Financial Data and Key Metrics Changes - The company reported net revenue of approximately $41 million for Q2 2025, exceeding guidance of $40 million and reflecting a decrease from $53.5 million in the same period last year [7][15] - Gross margins improved to 28.3% in Q2 2025, up from 26.9% in Q2 2024, driven by higher proprietary brand sales [9][17] - The net loss for Q2 2025 was $4.8 million, or negative $0.08 per share, an improvement from a net loss of $5.9 million, or negative $0.10 per share, in Q2 2024 [18] Business Line Data and Key Metrics Changes - Proprietary product sales accounted for nearly 32% of total revenue in Q2 2025, up from 21.5% in the same period last year, indicating a stronger focus on higher-margin products [8][15] - In the MMI storage solutions segment, revenue reached $8.1 million, up over 69% sequentially, reflecting strong demand and product diversification [12] Market Data and Key Metrics Changes - The company is expanding internationally, having signed a distribution agreement with V1 Solutions for commercial sales across the European Union and launched a proprietary product line in Costa Rica [11] - The company noted a significant backlog in durable goods, indicating a recovery in demand within the industry [40] Company Strategy and Development Direction - The company is focused on transforming into a leaner, more profitable, product-driven business with an emphasis on B2B customers [6] - The acquisition of Viagro is seen as a strategic move to enter the home gardening market and strengthen the proprietary brand portfolio [11][27] - The company aims to achieve gross margins in the 30% range and is actively working to mitigate tariff impacts through diversified sourcing and improved supply chain efficiency [30][33] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the potential for growth in the lawn and garden space and the positive impact of cannabis reform on the cultivation ecosystem [14][27] - The company is not providing full-year 2025 guidance due to uncertainties in global trade policy and cannabis reform but expects sequential revenue growth in Q3 2025 [20] Other Important Information - The company ended Q2 2025 with $48.7 million in cash and no debt, providing flexibility for working capital and growth initiatives [13][19] - The company is continuing to rationalize operations and expects further cost savings in the latter half of 2025 [20] Q&A Session Summary Question: Insights on the Viagro acquisition and opportunities in the gardening space - Management sees tremendous opportunity in the lawn and garden space with the Viagro acquisition, which brings strong relationships and products that can crossover into cannabis [27] Question: Future gross margin expectations amid tariff risks - Management aims for gross margins to reach the 30% range and is implementing strategies to mitigate tariff impacts while maintaining competitive pricing [30][33] Question: Status of expense reductions and future cuts - Management confirmed ongoing cost reductions and expects additional improvements in SG&A and operating expenses in the latter half of the year [38] Question: Industry outlook and capital investments - Management noted a significant backlog in durable goods and observed clients beginning to refurbish their portfolios, indicating a positive shift in industry dynamics [40] Question: Timeline for repositioning the business towards commercial focus - Management believes most internal needs are met and anticipates significant savings and growth opportunities by the end of Q4 2025 [46][48]

[PART I FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Presents unaudited condensed consolidated financial statements, including balance sheets, operations, equity, cash flows, and notes [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) | ASSETS (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Cash and cash equivalents | $23,309 | $27,471 | | Marketable securities | $25,399 | $28,984 | | Accounts receivable, net | $10,425 | $7,361 | | Inventory | $41,737 | $40,295 | | Total current assets | $108,988 | $113,208 | | TOTAL ASSETS | $160,610 | $174,352 | | LIABILITIES & STOCKHOLDERS' EQUITY (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Accounts payable | $11,608 | $8,146 | | Total current liabilities | $27,266 | $24,274 | | Total liabilities | $53,889 | $54,259 | | Total stockholders' equity | $106,721 | $120,093 | | TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $160,610 | $174,352 | - Total assets **decreased by $13.7 million** from $174.352 million at December 31, 2024, to $160.610 million at June 30, 2025[12](index=12&type=chunk) - Total stockholders' equity **decreased by $13.372 million** from $120.093 million to $106.721 million during the same period[12](index=12&type=chunk) [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) | (in thousands, except per share amounts) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net sales | $40,963 | $53,536 | $76,666 | $101,424 | | Gross profit | $11,594 | $14,421 | $21,301 | $26,785 | | Loss from operations | $(5,274) | $(6,514) | $(15,148) | $(15,946) | | Net loss | $(4,811) | $(5,896) | $(14,188) | $(14,733) | | Net loss per share, basic | $(0.08) | $(0.10) | $(0.24) | $(0.24) | - Net sales **decreased by 23.5%** for the three months and **24.4%** for the six months ended June 30, 2025, compared to prior-year periods[14](index=14&type=chunk) - Net loss **improved by 18.4%** for the three months and **3.7%** for the six months ended June 30, 2025, year-over-year[14](index=14&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) | (in thousands) | Balance as of Dec 31, 2024 | Balance as of June 30, 2025 | | :------------- | :------------------------- | :-------------------------- | | Common Stock (Shares) | 59,403 | 59,772 | | Common Stock (Amount) | $59 | $60 | | Additional Paid-In Capital | $375,677 | $376,492 | | Accumulated Deficit | $(255,643) | $(269,831) | | Total Stockholders' Equity | $120,093 | $106,721 | - Total stockholders' equity **decreased from $120.093 million to $106.721 million**, primarily due to a **net loss of $14.188 million**[16](index=16&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) | (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(6,750) | $(4,044) | | Net cash provided by investing activities | $2,699 | $6,182 | | Net cash used in financing activities | $(111) | $(4,317) | | Net decrease in cash and cash equivalents | $(4,162) | $(2,179) | | Cash and cash equivalents at end of period | $23,309 | $27,578 | - The net decrease in cash and cash equivalents was **$4.162 million** for the six months ended June 30, 2025, an increase from the prior-year period[18](index=18&type=chunk) - This was primarily driven by **increased cash used in operating activities** and **decreased cash provided by investing activities**[18](index=18&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) [1. General Business Overview](index=8&type=section&id=1.%20General%20Business%20Overview) GrowGeneration operates Cultivation and Gardening and Storage Solutions segments, with 29 retail locations and online presence - GrowGeneration operates two major lines of business: **Cultivation and Gardening** and **Storage Solutions**[20](index=20&type=chunk) - As of June 30, 2025, the Company has **29 retail locations** across 11 states and an online superstore[21](index=21&type=chunk) [2. Recent Accounting Pronouncements](index=8&type=section&id=2.%20Recent%20Accounting%20Pronouncements) The Company is evaluating the impact of recently issued accounting pronouncements, ASU 2023-09, ASU 2024-03, and ASU 2025-05 - **ASU 2023-09 (Income Taxes)** is effective for annual periods beginning after December 15, 2024, and will be adopted in Q4 2025[26](index=26&type=chunk) - **ASU 2024-03 (Expense Disaggregation Disclosures)** is effective for fiscal years beginning after December 15, 2026[28](index=28&type=chunk) - **ASU 2025-05 (Credit Losses for Accounts Receivable and Contract Assets)** is effective for annual periods beginning after December 15, 2025[29](index=29&type=chunk) [3. Fair Value Measurements](index=9&type=section&id=3.%20Fair%20Value%20Measurements) Financial assets and liabilities are classified into a three-level hierarchy, with cash equivalents as Level 1 and marketable securities as Level 2 | (in thousands) | Level | June 30, 2025 | December 31, 2024 | | :------------- | :---- | :------------ | :---------------- | | Cash equivalents | 1 | $12,961 | $16,945 | | Marketable securities | 2 | $25,399 | $28,984 | - Changes in fair value of marketable securities were **$0.2 million** (3 months) and **$0.4 million** (6 months) for June 30, 2025[32](index=32&type=chunk) [4. Revenue Recognition](index=10&type=section&id=4.%20Revenue%20Recognition) Net sales are disaggregated by segment and product line, with accounts receivable and customer deposits showing changes | (in thousands) | Accounts Receivable, Net | Customer Deposits | | :------------- | :----------------------- | :---------------- | | Balance as of January 1, 2025 | $7,361 | $2,404 | | Balance as of June 30, 2025 | $10,425 | $2,448 | | Increase | $3,064 | $44 | - Accounts receivable **increased by $3.064 million** from January 1, 2025, to June 30, 2025[37](index=37&type=chunk) - Of customer deposits as of January 1, 2025, **$1.6 million was recognized as revenue** during the six months ended June 30, 2025[37](index=37&type=chunk) [5. Property and Equipment](index=1

Core Insights - GrowGeneration Corp. reported net sales of $41.0 million for Q2 2025, reflecting a 14.7% increase sequentially but a decline from $53.5 million in Q2 2024 [4][6] - Proprietary brand sales accounted for 32.0% of total Cultivation and Gardening revenue, up from 21.5% in the same period last year, indicating strong brand performance [5][6] - The company achieved a gross profit margin of 28.3%, an improvement from 26.9% in Q2 2024, driven by higher private label penetration [7][6] Financial Performance - Net sales for the Cultivation and Gardening segment were $32.9 million, down from $46.1 million year-over-year due to fewer retail locations [4] - Storage Solutions segment net sales increased to $8.1 million from $7.4 million in the prior year [4] - Store operating expenses decreased by approximately 22.9% to $7.9 million compared to $10.2 million in Q2 2024 [8][6] Profitability Metrics - Gross profit was $11.6 million for Q2 2025, down from $14.4 million in Q2 2024, attributed to decreased sales volume [7] - The net loss narrowed to $4.8 million from a loss of $5.9 million in the same quarter last year [9][6] - Adjusted EBITDA loss was $1.3 million, slightly worse than a loss of $1.1 million in Q2 2024 [10][6] Strategic Initiatives - The company is focusing on a transformation strategy aimed at enhancing long-term profitability, including expanding its online B2B portal and entering the home gardening segment [3] - GrowGeneration established distribution partnerships in the European Union and Costa Rica, indicating international expansion efforts [3] - The company aims for proprietary brands to represent 35.0% of segment sales by year-end 2025 [3] Operational Footprint - As of June 30, 2025, GrowGeneration operated 29 retail locations across 11 states, with a total retail and warehouse space of 709,000 square feet [11] - The company closed two retail locations as part of its network optimization strategy [11] Future Outlook - For Q3 2025, the company expects total consolidated net sales to exceed $41 million, indicating continued sequential growth [13] - Due to macroeconomic uncertainties, the company is not providing a full-year 2025 financial outlook at this time [12]

Core Viewpoint - GrowGeneration Corp. will release its financial results for the second quarter ended June 30, 2025, on August 11, 2025, after market close, followed by a live earnings conference call [1]. Company Overview - GrowGeneration Corp. is the largest specialty retailer of hydroponic and organic gardening products 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 Charcoir, Drip Hydro, Power Si, Ion lights, and The Harvest Company [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]. Earnings Call Information - To participate in the earnings call, domestic participants can dial 1-(888)-699-1199 and international participants can dial 1-(416)-945-7677, using the conference code 53471 [2]. - The call will be webcast and accessible through the Investor Relations section of the GrowGeneration website, with a replay available approximately two hours after the call for about 90 days [2].

Group 1 - Alan Brochstein is a pioneer in the cannabis investment sector, having focused exclusively on this industry since 2007 [1] - He founded AB Analytical Services to provide independent consulting to registered investment advisors [1] - Brochstein is the managing partner of New Cannabis Ventures, which has been a key provider of financial information in the cannabis industry since 2015 [1] Group 2 - Alan has led the investing group 420 Investor since 2013, which focuses on publicly-traded cannabis stocks [2] - The group covers 20 stocks, providing investment news, earnings report previews, and post-report analyses [2] - Additional features of the group include a model portfolio, 10 weekly videos with chart analysis, 3 weekly summary pieces, a monthly newsletter, and a chat for questions [2]

Core Insights - GrowGeneration Corp. is the largest specialty retailer of hydroponic and organic gardening products in the U.S. and will showcase innovations at Cultivate'25 from July 12-15, 2025 [1][2] Company Overview - GrowGeneration offers a wide range of products including nutrients, additives, growing media, lighting, and environmental control systems, featuring proprietary brands like Charcoir, Drip Hydro, and The Harvest Company [6] Event Participation - At Cultivate'25, GrowGeneration will present its proprietary portfolio of cultivation products and services tailored for modern greenhouse, nursery, and commercial growing operations [2][3] Product Innovations - The company will highlight new and proven products from its brands, including Viagrow, Charcoir, Drip Hydro, and Ion lights, emphasizing its commitment to innovation and performance [3][5] Expansion Strategy - GrowGeneration is expanding into the lawn, garden, and nursery sectors through The Harvest Company and Viagrow, providing scalable, retail-ready solutions for growers nationwide [3]

Industry Overview - The cannabis industry is experiencing continuous growth, leading to optimism among investors despite current market conditions [1][2] - There is a lack of sustained volatility in cannabis stocks, which has hindered shareholder profits [2] - Federal legalization is speculated to be a key resolution for the public sector of cannabis companies [2] Company Highlights - **GrowGeneration Corp.** operates retail hydroponic and organic gardening stores in the U.S. and has entered a distribution agreement with V1 Solutions for its products in the EU and Costa Rica [4] - **Hydrofarm Holdings Group, Inc.** manufactures and distributes hydroponics equipment in the U.S. and Canada, reporting a decrease in net sales to $40.5 million from $54.2 million [6][5] - **The Scotts Miracle-Gro Company** reaffirmed its full fiscal year 2025 guidance and is involved in the manufacture and sale of gardening products [8][10] Financial Performance - Hydrofarm's gross profit for Q1 2025 was $6.9 million, with a gross profit margin of 17.0%, down from 20.2% [11] - Adjusted gross profit margin decreased to 21.0% from 23.4% [11] - The company reported a net loss of $14.4 million, an increase from $12.6 million, and an adjusted EBITDA of $(2.4) million compared to $0.3 million [11]

Core Insights - The cannabis industry is experiencing significant progress and innovation, despite many marijuana stocks underperforming [1] - The market is divided into two main areas: large multi-state operators (MSOs) and ancillary companies that provide services or products related to cannabis [2] - Ancillary marijuana companies are performing better due to their diversified business models, which help them withstand market fluctuations [3] Company Highlights - **Hydrofarm Holdings Group, Inc.**: Reports Q1 2025 earnings with net sales of $40.5 million, down from $54.2 million; gross profit decreased to $6.9 million with a gross profit margin of 17.0% [7] - **GrowGeneration Corp.**: Operates retail hydroponic and organic gardening stores; recently entered a distribution agreement with V1 Solutions to expand its market presence in the EU [8] - **High Tide Inc.**: Engages in cannabis retail across North America; recently opened two new Canna Cabana locations in Toronto and Winnipeg, indicating strong market performance in Manitoba and Ontario [11]