Vireo Growth said it has entered an agreement with Scotts Miracle-Gro to acquire The Hawthorne Gardening Company, an independent operating subsidiary of ScottsMiracle-Gro and provider of nutrients, lighting and other materials used for indoor and hydroponic cannabis cultivation.
Vireo said it intends to name Chris Hagedorn, executive vice resident of ScottsMiracle-Gro and executive lead of the Hawthorne business, to its board upon completion of the transition.
“Through Hawthorne, we have spent years operating alongside the cannabis industry and working with a wide range of operators across markets, cycles, and business models," said Hagedorn in a statement. "That experience has given us a clear view of what does and does not create durable value over time. After evaluating our strategic options, we concluded the most compelling path forward for our shareholders is to transition to an equity participation arrangement with Vireo. Vireo is well capitalized and has a strong platform and operating approach to be a market leader in the cannabis space.”
Scotts last year transferred Hawthorne Collective to an independent strategic partner, the beginning of putting some distance between the company and its cannabis business segment.
Hagedorn spoke last year with CNBC’s Jim Cramer and said his company had “burned $2 billion” on the Hawthorne.
“So...we’re going to put the business into another entity, and we’ll have equity in that. And we’ll hope for the best,” he said, adding that Hawthorne is now "mostly off the table."
