Thursday, February 2, 2023

Let’s Talk About How Scotts Miracle-Gro Is Becoming A Major Player In The Cannabis Market

Scotts Miracle-Gro is quietly becoming one of the major players in the cannabis industry — and the 150-year-old multinational garden giant doubled down on its investment this week by purchasing a hydroponics company.

Scotts announced it will acquire Sunlight Supply Inc., the largest U.S. distributor of hydroponics products for $450 million, a deal the company predicts will more than double its sales to cannabis growers.

Three years ago, Scotts began gobbling up cannabis-related companies. In 2015, it spent $135 to buy two California-based businesses that sell fertilizers, soils and accessories to cannabis growers. In 2016, it forked over another $120 million on a Dutch lighting and hydroponics equipment company.

“We are creating a game-changing moment for Scotts Miracle-Gro, for Hawthorne, the hydroponic products industry and the users of our products,” said Jim Hagedorn, CEO of Scotts Miracle-Gro. “For a lot of conventional companies, I don’t think they’d want to take the risk,” added Hagedorn. “I mean I’ve talked to some other friends and CEOs who basically shake their head.”

Sunlight Supply will be part of Scotts Miracle-Gro’s wholly-owned subsidiary Hawthorne Gardening, which had sales of $290 million last year. Hawthorne now owns some of the biggest players in the hydroponic space, including Gavita, Botanicare, Can-Filters, and General Hydroponics. Sunlight Supply is America’s largest distributor of hydroponic products. In 2017, Sunlight opened a 350,000-square foot distribution center in Vancouver, Washington, and has eight other distribution facilities across North America.

“Combining Hawthorne’s industry-leading product portfolio with Sunlight’s unparalleled distribution capabilities and complementary portfolio will benefit consumers and all stakeholders in the hydroponic marketplace,” said Hagedorn. “It reinforces our confidence in the future of this industry and takes Hawthorne to a new level as a business with unique competitive advantages.”

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