The efforts to legalize marijuana across the nation bodes well for up-and-coming pot-stock GrowGeneration (NASDAQ:GRWG). In contrast to traditional cannabis companies, GRWG plays the role of the servicer rather than the provider. The company is involved in hydroponics and all the essentials cannabis products require to grow. This key role puts GrowGeneration stock in an optimal position to benefit from the sweeping legalization of marijuana.

This has been the year to go green as investors place their bets on cannabis companies. There are two main reasons for this.

One, the demand for marijuana has soared amidst the coronavirus pandemic as more people live, work and play at home. Second, many states have taken a stronger stance on legalizing marijuana. Recreational use of cannabis is now legal in 15 states with more looking to join.

Image of marijuana leaves growing on a plant.

If you want to make some plays in the cannabis market but don’t want to jump right in, GrowGeneration stock is the perfect way to get your foot in the door.

GRWG Stock Jumps As States Go Green

A drug once abhorred by the public, marijuana has now reached formal acceptance in states across the nation. This comes after the changing attitudes of voters who are now more enthused about legalizing recreational weed than ever before. 15 states in the U.S. and the District of Columbia have now sanctioned the use of recreational marijuana. Earlier this month, New Jersey passed the ballot on its use and will soon be followed by New York.

The gradual decriminalization and acceptance of weed is a positive development for marijuana tool supplier, GrowGeneration. While the company does not deal with the production of cannabis, it does provide growers with the tools required for cultivation. The sweeping cannabis initiatives across states will allow the gardening enterprise to make waves in the multi-billion industry.

GrowGeneration says it is looking to cash in on the upcoming approvals on the East Coast. With New Jersey and New York approving recreational use, it’s only a matter of time before other states follow suit. In an interview with CNBC, GrowGeneration CEO Darren Lampert said that the company expects to benefit from the expanding weed industry. It is already scouting locations to set up shop on the East Coast this spring.

The green sweep will allow GrowGeneration to expand its footprint in the coming years. With the potential for excellent growth, GRWG stock is definitely worth buying.

An All-Round Great Buy

The legalization of marijuana is great news for GrowGeneration but that’s not all the company has going for it. 2020 was a period of high uncertainty and losses for many but GRWG stock proved to be a stable buy in these trying times. In its previous quarter, the company reported a 153% increase in year-over-year revenue at $55 million. Gross profit for the period also saw a massive surge to $14.6 million. This led the company to increase guidance for 2021 and expects sales to be between $280 to $300 million.

Adding to a great bottom line, GrowGeneration also has an acquisition strategy in place to spearhead its growth mission. This year the company acquired a series of businesses including Hydroponics Depot, Big Green Tomato and The GrowBiz. All three companies will bring in an approximate revenue of $71 million. These subsidiary entities will also add value to GrowGeneration’s current product offering. In terms of store numbers, the company is looking to add 22 new locations to the existing 28 next year.

Maintaining a great bottom line while completing several acquisitions during a global pandemic is no easy feat. However, GrowGeneration managed to do all this and more while maintaining a negative debt balance. The company funds its growth plans by issuing more stock – a strategy that has paid off, given its high revenue numbers.

The Bottom Line On GRWG

GrowGeneration may not produce marijuana but is one of the best pot stocks on the market today. The company has the perfect combination of a uniquely positioned business with a great strategy for growth. As the legalization of marijuana sweeps across the nation, GRWG stock is in for a much greater upside.

GrowGeneration is in a stable position right now making it the perfect time to buy-in and benefit from upcoming tailwinds.

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