The Best Ancillary Marijuana Stocks on the Nasdaq to Watch Right Now in July
New lows for the cannabis sector from July 2022
Are top marijuana stocks on your radar as the industry hits new lows? Many of the top cannabis stocks to watch fell to new lows as July trading began. In general, the markets have seen a significant decline due to inflation concerns and delays in federal cannabis reform. However, it seems that the cannabis industry is preparing for a possible change in August. Congress has been moving faster on cannabis legislation lately.
A new initiative to increase the financial resources and opportunities available to cannabis companies was tabled in June by a bipartisan pair of federal lawmakers. The Capital Lending and Investment for Marijuana Businesses Act, or CLIMB Act, was specifically introduced by Representatives Troy Carter (D-La.) and Guy Reschenthaler (R-Pa.). It aims to enable cannabis businesses to engage in community development, small business, minority development and other sources of public or private financial capital for investment and financing. This could then propel a number of top cannabis stocks into major US stock markets.
Many of the ancillary cannabis stocks that are now trading on the Nasdaq have seen a significant drop in value in the first half of 2022. Some of these marijuana stocks are now selling at significantly better values for investors. Some of these stocks can be a starting point for a long-term investment in cannabis or an opportunity to profit from considerable losses in the short term. Many analysts now believe that the stock market will soon bottom. Here are a handful of the best marijuana stocks to add to your watch list for July.
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Top Marijuana Stocks on the Nasdaq in Q3 2022
- The Scotts Miracle-Gro Company (NASDAQ: SMG)
- Grow Generation Corp. (NASDAQ: GRWG)
- Hydrofarm Holdings Group, Inc. (NASDAQ: HYFM)
The Scotts Miracle-Gro Company
The world’s largest manufacturer of branded lawn and garden products, Scotts Miracle-Gro, has joined the cannabis industry. Hawthorne Gardening, a wholly-owned subsidiary of the company, sells cannabis fertilizers, lighting and hydroponic equipment. On January 6, Scotts added True Liberty and Luxx Lighting bags to the Hawthorne portfolio. The acquisition will strengthen Hawthorne’s already competitive lighting portfolio. Hawthorne’s sales fell, but the company did not change its full-year projection.
In May, Scotts announced record consumer sales for the first half of 2022, citing growing demand for lawn and garden supplies as the cause. GAAP earnings from continuing operations for the three months ended April 2, 2022 were $4.94 per diluted share, compared to $5.44 per diluted share a year earlier. Non-GAAP adjusted diluted earnings per share increased from $5.64 to $5.03 from a year ago. Fiscal second quarter sales were $1.68 billion, down 8% from $1.83 billion a year earlier. In addition, sales in the consumer market in the United States increased slightly to $1.38 billion. Sales in the Hawthorne area fell 44% to $202.6 million. In June, Scotts revised its guidance for fiscal 2022 to adjust earnings per share from $4.50 to $5.
Performance of SMG shares
SMG stock closed at $80.18 on July 1st down 12.96% last month. Currently, the stock has a 52-week price range of $72.58 to $189.57 and is down 50.20% year-to-date. According to CNN Business analysts, SMG stock has a 12-month price target of $102.50 per share. This forecast represents a 27.85% increase from its last trading price of $80.18.
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The well-known supplier and manager of hydroponic and organic farming facilities in the United States is GrowGeneration Corp. The company provides cannabis growers with a range of products, including organics, lighting, and hydroponic tools. Today, GrowGen owns and operates 63 organic garden stores across the United States. The organization has focused on its internet presence since the inception of GrowGeneration.com. The website has grown into a one-stop e-commerce destination with over 10,000 products, ranging from nutrition to lighting technology. The company plans to open more than 100 locations across the United States over the next five years. In the third quarter of 2021, the company built the largest hydroponic garden facility in Los Angeles County.
According to the company’s May 10 reports, GrowGen’s net sales for the first quarter of 2022 decreased to $81.8 million due to lower industry demand. Additionally, comparable store sales fell 35.5% in the third quarter. Results for the quarter were a net loss of $5.2 million, or a loss of $0.09 per share. The company suffered an overall adjusted EBITDA loss of $0.7 million. Drip Hydro, a whole line of liquid fertilizer blends created for industrial growers, was launched by GrowGeneration in May. Previous revenue estimates for 2022 were $415-445 million, but have now been lowered to $340-400 million.
July 1st, shares of GRWG ended at $3.79, down 24.20% last month. GRWG stock is down 70.96% year-to-date, with a 52-week price range of $3.42 to $52.80. According to CNN Business analysts, GRWG stock has a 12-month median price target of $6.25 per share. This predicted a 64.47% increase from the last trade price of $3.78.
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Hydrofarm Holdings Group, Inc.
Hydrofarm Holdings Group, Inc. is a well-known reseller of hydroponics and controlled environment growing supplies and equipment. In general, the company offers a wide selection of cannabis cultivation tools for sale. High-intensity grow lights, temperature control systems, and grow materials are just a few of the company’s products. In addition to a wide selection of distinctive products with a sophisticated brand, the company revealed on November 1 that it had successfully acquired Innovative Growers Equipment, Inc. To provide water filtration technology and solutions by state-of-the-art reverse osmosis, the company partnered with AXEON Water Technology in January.
Net sales for the first quarter of 2022 were announced by Hydrofarm on May 10 and remained at $111.4 million. Additionally, the overall profit went from $23.2 million to $16.6 million. The company reported a net loss of $23 million, or $0.52 per share. Hydrofarm’s 2022 guidance calls for revenue of $480-520 million and adjusted EBITDA of $46-54 million, or about 10% of net sales.
HYFM stock closed July 1st at $3.48, down 46.63% last month. The stock has a 52-week price range of $3.40 to $59.00 and is down 87.70% year-to-date. According to analysts at Tip Ranks, HYFM stock has a 12-month average price target of $9.60 per share. In this case, that would be a 175.86% increase from its last trading level of $3.48.
Top Cannabis Stocks for July 2022 and Uncovering Gains in a Falling Market
You should review a company’s financial reports and press releases to determine if the assets are suitable for your portfolio and your business approach. You may be able to make better market decisions by understanding chart patterns and technical indicators. The current volatility in the marijuana market in July may present an opportunity for seasoned traders. In 2022, a number of variables could ignite the cannabis stock market. The price of major ancillary marijuana stocks can be significantly impacted by the passage of any federal cannabis legalization legislation.