water
corn grits, preferably stone-ground
kosher salt, plus more as needed
medium or sharp cheddar cheese (about 1 cup shredded)
unsalted butter
heavy cream
large green bell pepper
medium scallions
garlic
sliced bacon (4 to 6 slices)
diced tomatoes
Creole or Cajun seasoning
smoked paprika
granulated sugar
raw peeled and deveined large shrimp (26 to 30 per pound)
hot sauce, such as Tabasco or Crystal, plus more for serving
Lemon wedges, for serving (optional)
Place 5 cups water, 1 1/2 cups corn grits, and 3/4 teaspoon kosher salt in a large saucepan. Bring to a boil, stirring occasionally, over high heat. Take the saucepan off the heat, cover, and let sit for 10 minutes.
Meanwhile, grate 4 ounces medium or sharp cheddar cheese on the large holes of a box grater, or measure out 1 cup store-bought shredded. Trim and dice 1 large green bell pepper (about 1 1/2 cups). Thinly slice 4 medium scallions (about 1 cup). Reserve 3 tablespoons of the dark green parts for garnish. Mince 3 garlic cloves. Cut 4 ounces sliced bacon crosswise into 1/2-inch pieces.
Uncover the grits, place over medium-high heat, and bring back to a boil. Boil uncovered, stirring occasionally and scraping the bottom to prevent clumping or burning, until all the water is absorbed and the grits are tender, 15 to 25 minutes. Meanwhile, start cooking the shrimp mixture.
Place the bacon in a large skillet and cook over medium heat until browned and crisp, 8 to 10 minutes. Using a slotted spoon, transfer the bacon to a paper towel-lined plate. Discard all but 2 tablespoons of the bacon fat in the skillet. Add the bell pepper, remaining scallions, and garlic, and cook over medium heat until the pepper is crisp-tender, about 2 minutes.
Add 1 (14.5-ounce) can diced tomatoes and their juices, 1 teaspoon Creole or cajun seasoning, 1/2 teaspoon smoked paprika, and 1/4 teaspoon granulated sugar. Bring to a simmer and cook, stirring occasionally, until slightly reduced, about 3 minutes. Turn off the heat.
When the grits are ready, remove the pan from the heat. Add the cheddar, 3 tablespoons unsalted butter, and 1/3 cup heavy cream. Stir until the cheese and butter are melted and the mixture is combined. Taste and season with kosher salt as needed. Cover to keep warm.
Return the tomato mixture to a simmer over medium heat. Add 1 pound raw peeled and deveined large shrimp and cook, stirring occasionally, until the shrimp are opaque and just cooked through, 3 to 4 minutes. Add the bacon and 1 to 3 dashes hot sauce, and stir to combine. Taste and season with kosher salt as needed.
Divide the grits between serving bowls and top with a generous spoonful of the shrimp mixture. Sprinkle with the reserved scallion greens and serve with hot sauce and lemon wedges for squeezing if desired.