Whether the U.S. marijuana industry "only" doubles or more than triples in size over the next few years, there's one top stock that I think is especially poised to benefit from the growth: Scotts Miracle-Gro (NYSE:SMG). The reality is that there aren't many good choices for U.S. investors right now. Most U.S.-based marijuana stocks are penny stocks that come with risks including low liquidity levels.
Scotts Miracle-Gro, however, is an established company with a long history of success. The company's roots date back to the 19th century. Scotts ranks as a leader in the lawn and garden products business, with total revenue last year of more than $2.6 billion.
Over the last few years, Scotts has moved aggressively to position itself as a key supplier to the rapidly expanding marijuana industry. The company's Hawthorne business segment completed multiple acquisitions in 2015, 2016, and 2017, picking up hydroponic gardening businesses and horticultural lighting systems companies. Most recently, Scotts acquired Sunlight Supply, a top U.S. distributor of hydroponics products, for $450 million. The deal is expected to roughly double Scotts Miracle-Gro's sales to the marijuana industry.