Up 568% in 12 Months and More to Come?

When a stock is up 568% in 12 months that usually a good time to lock in some gains. However, the cannabis sector just created an exception.

GrowGeneration Corp. (NASDAQ: GRWG) is the largest retailer of specialty hydroponics and cultivation materials in the U.S. GrowGen currently own 55 stores, which include 20 locations in California, eight locations in Colorado, seven locations in Michigan, five locations in Maine and Oklahoma, two locations in Nevada, Washington, Oregon, Arizona, Rhode Island, Florida, and Massachusetts. GrowGen also operates an online superstore for cultivators.

With the U.S. cannabis industry booming, Growgen has been cashing in on the trend. It’s hard to find another company delivering this kind of sales growth right now – Growgen’s first-quarter results were impressive. Here are a few highlights from the press release.

  • First-quarter revenue increased by 173%, to $90 million.
  • Comparable store sales for the quarter increased 51% from the prior year.
  • Record earnings of $0.10/share in the quarter.

GrowGen’s Impressive Stock Swing

Growgen’s impressive sales growth has been driving shares higher on the chart. Shares are up 568% in the last 12 months.

12-Month Chart GrowGeneration Corp. (NASDAQ: GRWG)

Due to the incredible growth, Growgen just announced that it will be included in the Russell 2000. The Russell 2000 is a popular and closely followed index of 2,000 small-cap stocks. Here are more details from the press release.

DENVER, June 28, 2021 /PRNewswire/ – GrowGeneration Corp. (NASDAQ: GRWG), (“GrowGen” or the “Company”), the nation’s largest chain of specialty hydroponic and organic garden centers, today was added as a member of the US small-cap Russell 2000® Index, effective after the US market opens on June 28, as part of the 2021 Russell indexes reconstitution. Membership in the Russell 2000® Index, which remains in place for one year, is based on membership in the broad-market Russell 3000® Index. The stock also was automatically added to the appropriate growth and value indexes.

Being included in the Russell 2000 is a big win for Growgen. Institutional fund managers use the Russell 2000 as a benchmark and that should drive more capital into shares of Growgen.

Inclusion in the Russell also gives Growgen additional credibility as one of the largest and most successful small-cap companies in the U.S. That should also get the attention of millions of individual investors.

Here’s what Growgen CEO Darren Lampert said.

Darren Lampert, CEO of GrowGeneration Corp., stated, “The inclusion in the Russell 2000 is a major corporate milestone and reflects the continued growth of our Company. GrowGen continues to focus on expanding the number of our hydroponic garden centers, while increasing revenue and net profit. We believe our Russell 2000 listing will increase long-term shareholder value by improving awareness, liquidity and appeal to institutional investors.”

The Big Picture on Growgen and the Russell 2000

Growgen is the largest retailer of specialty hydroponics in the U.S. The company has been cashing in on the high-growth, U.S. cannabis industry.

Recent first-quarter sales growth was impressive, driving up shares 568% in 12 months. Looking forward, we see more gains ahead after the company was included in the Russell 2000 stock index. This gives the company more publicity and should drive more capital into shares in the next 12 months.


About the Author & Cannabis Stock Trades

Michael Vodicka is an equity analyst with more than 20 years of experience trading and investing. His research has been featured in some of the industry’s most respected publications. He has been investing and leading investors in the cannabis sector since 2013.

Mr. Vodicka brings his expertise and guidance to the members of Cannabis Stock Trades.

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