One of the best pot stocks to buy is already up nearly 40% this year, compared to the S&P 500's 8% rise. And this pot stock is poised to rise even more.
This company just made three investments worth $326 million, which give the company wide exposure to the highly profitable marijuana industry.
In fact, on Nov. 10, Money Morning Director of Tech & Venture Capital Research Michael A. Robinson said this pot stock could soar 30% over the next 12 months as more states legalize marijuana.
Before we get to this top pot stock to buy, here's why this Fortune 1000 company is investing so heavily in the marijuana industry...
On Nov. 8, seven new states legalized either recreational or medical marijuana. This brings the total number of states with legalized marijuana up to 28, including Washington, D.C. Eight of these states have legalized recreational marijuana, while all 28 states have legalized medical marijuana.
Big companies like the one we're about to show you are now embracing the growing public acceptance of marijuana.
That's because over the next three-and-a-half years, the marijuana industry is estimated to grow to $35 billion in value, according to a 2015 report by Bank of America and Merrill Lynch.
A good portion of that growth will be from marijuana cultivators. In fact, the marijuana-growing market could top $100 billion by 2021, according to Robinson.
There's no better way to capitalize on this niche than by investing in one of the world's largest lawn-care and garden products producers, like the company we're excited about.
What's more, this company's three "marijuana" investments specifically target growers...
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The company we're talking about is Scotts Miracle-Gro Co. (NYSE: SMG). Scotts' products are all over home and garden stores and include seed products, soil, and fertilizer. And while the company doesn't strictly operate in the marijuana business, it has made three new investments that give it massive exposure to the marijuana-growing market...
These investments are in the burgeoning technology of hydroponics: the process of using water, air, and light to grow plants indoors without soil.
Back in April 2015, Scotts purchased General Hydroponics for $150 million. Shortly after, it purchased Gavita, a Dutch lighting and hardware company for $136 million. And more recently, Scotts bought Botanicare, a hydroponics firm that boasts almost $40 million in sales, according to a report from The Cannabist.
The value of plants grown through hydroponics is projected to rise from $17 billion in 2013 to $24 billion over the next two years, Robinson said on Nov. 10.
"If other countries follow the lead set by the United States, pot cultivation - and hydroponics - could well soar much higher than that," he said.
In the last year, Scotts' "marijuana acquisitions" have increased sales by more than 20%. That's nearly four times the growth rate of the rest of the garden and lawn-care company, Robinson noted. What's more, these hydroponics firms also contributed to Scotts' 50% climb in profit since 2012.
Robinson projects that SMG stock could rise 30% over the next 12 months as more states legalize cannabis and more pot producers consider hydroponics as an alternative growing method. This gives the stock a price target of $109 per share by October 2013, based on the Nov. 10 date that Robinson recommended the stock.
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