Shares of GrowGeneration (NASDAQ: GRWG) were jumping 13.4% higher as of 10:51 a.m. EDT on Tuesday after soaring nearly 21% on Monday. Investors continue to be excited about the specialty hydroponic and organic gardening retailer's blowout second-quarter results announced last week. Today's move also likely stems in part from a positive reaction to GrowGeneration CEO Darren Lampert appearing on CNBC's Mad Money on Monday.
Lampert told CNBC's Jim Cramer that "business is booming." There's no arguing that point. GrowGeneration's sales in Q2 skyrocketed 123% year over year to $43.5 million.
The more important takeaway for investors from Lampert's appearance on Mad Money, though, relates to GrowGeneration's future prospects. "We're in such an early stage of a multi-billion dollar industry," Lampert said. "GrowGeneration is just getting started."
This optimism appears to be well founded. The U.S. cannabis industry continues to expand, with several large states legalizing recreational marijuana in the last two years and medical cannabis markets across the country continuing to grow as well. GrowGeneration has positioned itself as "a one-stop solution for all cannabis growers," Lampert said.
Probably the biggest concern for the picks-and-shovels cannabis stock moving forward is its valuation. GrowGeneration shares trade at 156 times expected earnings. But if the company keeps up its impressive revenue and earnings growth and Lampert's positive view of the market potential proves to be accurate, GrowGeneration's share price could continue to rise even with a premium valuation.