Minneapolis-based multistate marijuana operator Vireo Development plans to accumulate The Hawthorne Gardening Co., the cannabis-oriented subsidiary of garden and backyard large The Scotts Miracle-Gro Co.
As a part of the deal introduced Wednesday, Scotts Miracle-Gro will transition to what executives described as an “fairness participation association” with Vireo somewhat than sustaining direct possession of Hawthorne, in accordance with a Vireo Development information launch.
Precise phrases of the deal, described as a memorandum of understanding (MOU), weren’t introduced.
Scotts Govt Vice President Chris Hagedorn might be named to Vireo’s board when the transition is full.
The deal represents one other pivot away from hashish for Scotts – and yet one more audacious acquisition for Vireo.
Scotts Miracle-Gro’s $1.7 billion marijuana trade play
In a press release, Scotts Chairman and CEO Jim Hagedorn mentioned the deal ensures “a very good residence for Hawthorne that aligns with our pursuits whereas enabling us to sharpen the deal with our core enterprise.”
“Vireo is properly capitalized and has a powerful platform and working method to be a market chief within the hashish area,” he mentioned.
Through Hawthorne, which Scotts launched in 2014 as a part of a $1.7 billion play to enter the hashish trade, the standard mainstream gardening provide firm scooped up hashish lighting and nutrient firms throughout the nation in the course of the trade’s growth time earlier than working into acquainted hassle.
The corporate laid off 1,000 workers as gross sales dipped by 40% by mid-2023 – and at one level needed to ship $200 million price of develop lights to the landfill for lack of a purchaser.
Shares in Scotts, which soared to as excessive as $250 in April 2021, had been buying and selling at round $61.50 on Wednesday. Scotts is listed on the New York Inventory Change.
Final 12 months, Ohio-based Scotts spun off Hawthorne right into a stand-alone operation in a transfer the corporate mentioned would make it “extra precious.”
A number of months later, the corporate additionally dumped its hashish funding unit, referred to as the Hawthorne Collective, to an unnamed “strategic accomplice.”
In a press release, Vireo CEO John Mazarakis mentioned the corporate is specializing in strengthening its relationship with Scott as the businesses transfer towards closing the deal.
“This proposed transaction builds on a basis of mutual respect and belief developed over time,” Mazarakis mentioned in a press release.
Marijuana MSO Vireo’s acquisition spree continues
For Vireo, the deal is the newest in a sequence of high-profile purchases.
Vireo launched into a sequence of acquisitions starting in December 2024 when it obtained $75 million in fairness financing to accumulate 4 single-state operators: Deep Roots Harvest in Nevada; The Flowery in Florida; Correct Manufacturers in Missouri; and WholesomeCo Hashish in Utah.
It continued its shopping for spree final 12 months, closing on a deal in October to purchase 86% of struggling MSO Schwazze’s convertible notes for $62 million following a default.
In December, Vireo introduced it might purchase a few of MSO PharmaCann’s Colorado belongings for $49 million, and earlier this month, it mentioned it might purchase former “Uber of Weed” retail and supply platform Eaze in a $47 million all-stock deal.
A flurry of M&A exercise within the hashish trade adopted President Donald Trump’s Dec. 18 government order to downgrade marijuana’s standing from Schedule 1 to Schedule 3.
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