Better Buy: Scotts Miracle-Gro vs. Innovative Industrial Properties
Marijuana is expected to be a huge growth business, with some on Wall Street projecting that legal pot sales could eventually reach a massive $166 billion a year. If that forecast proves anywhere close to accurate, there could be a lot of upside for both marijuana companies and the companies that provide them with vital products and services. Which is exactly where Scotts Miracle-Gro (NYSE: SMG) and Innovative Industrial Properties (NYSE: IIPR) come in. If you can't stomach the idea of owning a marijuana stock, then these two industry suppliers are worth a close look. Picking between the two, meanwhile, is getting more difficult.
Scotts operates primarily in the lawn care sector -- a slow and boring business. However, a few years ago it decided to branch out into the hydroponic space to take advantage of the increasing legalization of marijuana. The subsidiary it launched to cater to cannabis growers, Hawthorne Gardening Company, has been growing quickly, and now accounts for around 20% of Scotts' sales. So far, most of that growth has been driven by acquisitions. However, management reported that in the company's fiscal third quarter, Hawthorne's organic sales growth would have been nearly 50%, factoring out a big acquisition made in mid-2018. That's impressive.
Image source: Getty Images
Source Fool.com
