The pot stock market is currently very heavily dominated by those who grow the physical substance. Because they have such a tight grasp on the industry, it can be difficult at times to identify other sources of value amongst pot stocks. This is where alternative companies come in. While the growers may be a good choice, alternative pot stocks offer a different level of volatility to those who wish to invest in the industry.
The past few weeks have seen an unusually high amount of fluctuations which have led to some feeling uncertain about the industry’s future. With ancillary companies, they tend to have a more clear path to the future as they are not nearly as limited by legislative measures. Because they don’t always touch the plant itself, they also can sometimes be much less volatile than the biggest name pot stocks. Of course, it all comes down to the individual investing style, but these two companies are definitely making a solid case for themselves.
The Grower Pot Stock
Aurora Cannabis (ACB Stock Report) is considered to be one of the largest players in the marijuana stock market. The company has made its name off of growing large quantities of the substance. Recently, they showed that their revenue was right around CA$100 million for the fourth quarter of 2019. This is quite substantial and shows that they are definitely on the right path.
Additionally, the company was able to illustrate that they are producing an 85% quarter over quarter growth in terms of cannabis grown. Cam Batley, Chief Corporate Officer of the company stated that they have “continued growth across all our distribution channels, Canadian medical, Canadian consumer, and international medical, and a massive increase in kilograms produced.” For this reason, they should continue to be a pot stock to watch. The company definitely has no shortage of volatility though, which investors should be aware of.
The Pot Stock Helping to Grow Cannabis
Scotts Miracle-Gro (SMG Stock Report) is no stranger when it comes to cannabis. The company has been helping growers do just that for quite some time now. With a large amount of experience on their back, the company also created a subsidiary known as Hawthorne Gardening. This subsidiary was created with the goal of helping those who want to specifically grow cannabis using hydroponic methods. With the subsidiary, the company saw its revenue shoot up by as much as 40% during the past year.
This is quite substantial considering their revenue is north of $1.15 billion. With massive growth under their belt, Scotts Miracle-Gro is showing what it truly means to be an alternative pot stock. The company has also managed to avoid a large amount of the volatility that has swept through the industry in the past few months. Of course, they are not immune to it, but they are less exposed than the biggest companies in the market. For this reason, they remain a key pot stock to watch.