2 Ancillary Marijuana Stocks To Watch This Week
Whenever people talk about marijuana stocks to buy they often focus on pure-play marijuana stocks more than other areas of the market. However, there is a wide array of other marijuana stocks to buy within the cannabis industry. For example, some cannabis companies may not deal with the physical plant but rather offer a product or service. Cannabis companies like these are known as ancillary marijuana stocks. Ancillary marijuana stocks are companies that usually help with branding and packaging, grow supplies, and sometimes real estate.
Investors have found that the ancillary side of the cannabis industry is less volatile making investments a little safer. Granted that,s not say other sectors of the cannabis market are not thriving as well. For instance, MSO marijuana stocks like Columbia Care Inc (CCHWF Stock Report) Acreage Holdings, Inc. (ACRHF Stock Report), and Red White & Bloom (RWBYF Stock Report) have had solid momentum recently. Even though nothing in the market or investment is promised it’s always a good idea to watch all sides of the cannabis industry. With marijuana stocks gaining more momentum in the market now may be the time to get involved. Below we will discuss 2 potential pot stocks to buy in 2020.
Top Anciallry Marijuana Stocks To Watch: KushCo Holdings
KushCo Holdings (KSHB Stock Report) for some is a great place to start when looking for possible pot stocks to buy. However, the company doesn’t work directly with the cannabis plant. But rather in facilitating other needs to the cannabis industry. This marijuana stock has multiple parts of their operation. Initially, the company started out as a packaging producer for cannabis-related businesses. This was key to have a service like this as each legal state has strict packaging laws when dealing with cannabis. Later on, the company got involved in selling vaporizer products across America. Last KushCo has also profited from the company's ability to service the supply of the solvents needed to produce derivatives. This includes hydrocarbon gases, which are necessary in the production of oils and concentrates.
Back in late October KushCo released its operational and financial highlights. Some of these highlights consist of a well thought out plan known as the “2020 Plan” to align with leading operators, which led to sales. As well general, and administrative (SG&A) expenses dropped down by more than 50% from fiscal Q1 2020 to fiscal Q4 2020. Also, the company managed to reach a positive adjusted EBITDA in fiscal Q4 2020 for the first time in over three years. Along with this KushCo locked down a new leading private multi-state-operator customer and a top vape brand in the U.S. With much in the works for this company Kushco Holdings looks to be a pot stock watch heading into 2021.
Top Anciallry Marijuana Stocks To Watch: GrowGeneration Corp
Another promising marijuana stock to watch is none other than GrowGeneration Corp (GRWG Stock Report). The company entered into the cannabis ancillary space in 2014. Since then GrowGeneration has become one of the top players not only in the agri-tech space but also becoming one of the largest hydroponic suppliers in the US. Currently, As of March 27, 2020, GrowGen operates over 25 retail and commercial hydroponic gardening centers. This including states such as Colorado, California, Michigan Nevada, Washington, Oregon, Oklahoma, and Florida to name a few.
For some this marijuana stock maybe for a more aggressive investor. In addition to this, some analysts have mentioned that GrowGen is one of the fastest-growing marijuana stocks to watch in 2020. I recent news GrowGen acquired The GrowBiz, America’s third-largest chain of hydroponic garden centers. This deal between both parties is expected to close before fiscal year-end 2020. Wrapping up 2020 and heading into 2021 GRWG stock looks to be a promising marijuana stock to watch.
The Need For Anciallry Marijuana Stocks In The Cannabis Industry
Given these points above it seems there is more to the cannabis industry than just growing marijuana. Each cannabis company needs different services to help comply with regulations or help operations run more smoothly. With the cannabis industry growing at a fast pace most marijuana companies need to work hand in hand. With ancillary marijuana stocks, you get just that. All things considered, the above-mentioned pot stocks may be a good starting place for those who want less risk when investing.
Though no risk no reward it’s always best to remember to do the proper research on each company before investing. As you become more comfortable with cannabis stocks in one niche looking into other areas of the sector may be profitable as well. For example as previously mentioned MSO, as well as pure-play and ESPs. All of these different sectors help to run and build the cannabis industry in its entirety. In conclusion, as we wrap up elections and prepare for the new year marijuana stocks seem to be in a good place in the market despite recent lows in other sectors.
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