It’s an exciting space to invest, though it’s clearly not risk-free with the federal government still looming. Wisely, SMG avoids the higher risk aspects of handling the substance, instead focusing on the lower-risk opportunity to simply supply the booming hydroponics industry. There are obvious similarities between today’s proliferation of “pot stocks” and the California Gold Rush of 1849. Not every prospector will make it. But the companies supplying those prospectors? That was where the smart money went in 1849 – the same is true today. Following the big money, like SMG, it’s clear why they’re investing heavily in the ability to “sell shovels” to cannabis handlers. SMG’s Hawthorne subsidiary and gardening segment accounted for about 13% of net sales last year, or $365 million, and the company reported 30% revenue growth from Hawthorne over the previous year. This was Hawthorne’s second full year in business. Solis Tek (OTCMKTS:SLTK) takes the same approach. The company is a manufacturer of digital lighting equipment (called “grow lights”) for the hydroponics industry. Solis Tek is one of these custom light providers, producing ballasts, reflectors, and Marijuana Stocks HID lights, with some of the most respected custom products on the market; Dope Magazine dubbed Solis Tek 2016’s “Best Lighting Company.” It may not sound as sexy as medicinal pot growing companies, but the market potential, and Solis Tek’s current growth and financials, are fundamentally sound.
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