Vireo Growth today completed its previously announced acquisition deal for Hawthorne, a cannabis supply subsidiary of Scotts Miracle-Gro.
In exchange for 213 million subordinate voting shares (with the option to buy more), Vireo gets $35 million of cash held by Hawthorne, approximately $58 million of net working capital and $20 million of inventory (primarily growing media).
In connection with the transaction, Vireo has nominated Chris Hagedorn, executive vice president of ScottsMiracle-Gro who has also led the Hawthorne business, for election to its board.
“The divestiture of Hawthorne demonstrates further progress toward our strategy to drive long-term growth in our core lawn and garden business,” said Hagedorn in a statement. “We are focused on making sustained investments to deliver operational efficiencies and groundbreaking innovation while engaging consumers in powerful ways. Additionally, the exclusion of Hawthorne will contribute to our margin recovery and other full-year targets.
“The acquisition of Hawthorne further strengthens the Vireo balance sheet and creates a procurement platform to optimize supply chain management and drive cost efficiency across our portfolio,” said Vireo CEO John Mazarakis in a statement.
For Vireo, the bow on Hawthorne ties up the last loose ends from a recent buying spree that includes retail assets from Eaze, PharmaCann and Schwazze. Those transactions have expanded Vireo’s retail presence in Colorado to 55 stores.
The company's portfolio of cannabis brands and assets now spans 10 total states, with 166 active retail dispensaries and approximately 800,000 square feet of operational cannabis cultivation and production, making it one of the largest multi-state, vertically integrated cannabis operators in the U.S.
