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Gardening Giant Anticipates Slowdown in Cannabis Sector

Scotts Miracle-Gro expects recent over-production to hurt sales in its hydroponic division.

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A major producer of lawn and garden products expects its indoor garden and hydroponic subsidiary to be impacted by a sluggish cannabis industry.

Scotts Miracle-Gro announced Tuesday that it projects its Hawthorne Gardening Company division to see a 40% drop in sales in the fiscal quarter that concluded on Jan. 1. The Ohio gardening giant attributed the larger-than-expected decline to a slowdown in the cannabis market, which officials said has been plagued by excess production. Hawthorne was also impacted by supply-chain interruptions across some product lines, the company said.

Scotts noted that the overall company maintained its outlook for the full fiscal year; the company expects to report results for the latest quarter on Feb. 1.

β€œWhile the cannabis market continues to see near-term challenges from an over-production in recent months, we see the current reality as an opportunity to further distance ourselves from the competition and strengthen our business for long-term success,” Hawthorne President Chris Hagedorn said in a statement.

Scotts disclosed the first-quarter sales projection in an announcement of a pair of acquisitions for the Hawthorne division. The company paid $215 million for Luxx Lighting β€” whose lights were designed and tested with Los Angeles cannabis grower collective Jungle Boys β€” and $10 million for True Liberty Bags, which offers liners and storage solutions for the hydroponic market.

β€œThese strategic acquisitions reinforce our commitment to provide commercial cannabis cultivators in state-authorized markets with a complete set of solutions driven by insight and innovation,” Hagedorn said.

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