Volatility is a hotly debated topic in the cannabis industry. On one hand, investors who swing trade, use volatility as an advantage for trading marijuana stocks. Large fluctuations can mean the difference between seeing returns in one day or a few months. And with the cannabis industry still in its infancy, many investors are choosing this strategy. On the other hand, volatility can be something that scared potential pot stock investors. Often times, people want a safer investment and one that will grow with time. But, a large majority of marijuana stocks to watch, happen to be on the more volatile side. Have no fear though, because there are plenty of options for those looking for stability.
These pot stocks to watch may not have the most upward momentum to offer in the short term. But, they do look like they have quite a lot of potential for the mid to long term time period. With that in mind, these marijuana stocks do have the opportunity to grow, but they tend to be more stable than others. This is in no way a guarantee of their stability, however, relative to pure-play pot stocks, these companies may have smaller fluctuations. With that in mind, here are two marijuana stocks to watch that could be safer choices than others.A Stable Ancillary Marijuana Stock to Watch
Scotts Miracle-Gro Inc. (SMG Stock Report) is one of the most popular ancillary marijuana stocks in the industry. The leading pot stock has remained a stronghold in the cannabis industry for quite some time. For those who don’t know, SMG stock has benefitted from producing and selling home gardening supplies. After realizing that a large portion of its customers were purchasing its products for growing cannabis, the company spun out a new subsidiary. The subsidiary known as Hawthorne Gardening has provided a lot of opportunity for SMG stock growth. For the full 2020 year, SMG stock may be able to see sales growth of around 30%.
This is in large part due to the profits that Hawthorne Gardening has brought in. Analysts have stated that Hawthorne alone could see as much as $1 billion in sales by the end of this year. If that comes true, it would be a definite benefit to SMG stock. Currently, Hawthorne is at around $430 million with half a year to go. For this reason, investors continue to believe that Scotts Miracle-Gro is a solid safer pot stock to watch.A Marijuana Stock By Proxy
Constellation Brands Inc. (STZ Stock Report) is not a marijuana stock on its own accord. Rather, STZ stock became a pot stock after the company invested as much as $4 billion into Canopy Growth Corp. (CGC Stock Report). For this reason, many believe that STZ stock has exposure to the cannabis industry, but only in a limited way. STZ stock on its own benefits from the sales of alcohol around the world. But, with more people than ever being home, alcohol sales have not reached expectations.
Despite this, STZ stock reported sales that were up by almost 4% for the year. This is due to the sales increase that Canopy Growth has seen. On the contrary to alcohol, the demand for marijuana has shot up dramatically since the beginning of the year. This is due to the effects of the coronavirus, and again, people staying at home. Because of Constellation’s sheer size, the company has remained a more stable marijuana stock than most. For that reason, it continues to be viewed as a pot stock to watch.