Hydroponic products retailer GrowGeneration (GRWG -3.90%) is about to grow its share count. The company announced Monday that it is floating a $125 million secondary issue of its common stock. Additionally, the company expects to grant the issue's underwriters -- Oppenheimer and Stifel -- a 30-day option to buy up to an additional 15% of the shares offered in the flotation.

The company has not yet specified how many shares it will issue.

It also was not immediately apparent for what GrowGeneration intends to use its share of the proceeds. In recent times it has been busy acquiring complementary assets, signing deals to purchase hydroponics retail stores in locations such as Arizona and Michigan. It's very possible that it will utilize the funds for more acquisitions.

Close up of 100 dollar bill with marijuana leaf atop it.

Image source: Getty Images.

At the moment, it operates 36 stores, most of which are located in states that have legalized the sale and consumption of recreational cannabis. The company estimates that the global hydroponics market will be worth around $16 billion; its latest annual revenue figure was $80 million.

The company is well capitalized relative to other issuers considered to be marijuana stocks, with a market capitalization approaching $1.7 billion. Nevertheless, a $125 million flotation raises the ugly specter of share dilution. This is a worry common to investors in cannabis companies, many of which have issued new shares, warrants, or a combination thereof to shore up their iffy finances.

Likely for that reason, shares of GrowGeneration dipped by 2.3% on Monday, a deeper fall than that suffered by the S&P 500 index.