GrowGeneration Acquires Phoenix-Based Hydroponics Depot

Rhea-AI Summary

GrowGeneration Corp (NASDAQ: GRWG) announced its acquisition of Hydroponics Depot, marking its entry into the Arizona medical cannabis market. This expansion increases GrowGen's store count to 29 across 11 states. Hydroponics Depot reported year-to-date sales exceeding $5 million with a 50% growth year-over-year. Arizona's cannabis market is projected to expand from $700 million in 2020 to $2 billion if Prop 207 is approved, enhancing growth prospects for GrowGen in medical and recreational segments.

Positive

• Acquisition of Hydroponics Depot enhances market presence in Arizona.
• Hydroponics Depot reported year-to-date sales exceeding $5 million with 50% yearly growth.
• Arizona's cannabis market projected to grow from $700 million to $2 billion with Prop 207 approval.

Negative

• None.

Acquisition marks the retailer's entry into Arizona's booming medical cannabis market

DENVER, Oct. 12, 2020 /PRNewswire/ - GrowGeneration Corp. (NASDAQ: GRWG), ("GrowGen" or the "Company") the nation's largest chain of specialty hydroponic and organic garden centers, today announced its acquisition of Hydroponics Depot, Phoenix's largest indoor and outdoor garden center. With the addition of Hydroponics Depot, GrowGen's portfolio of hydroponic garden centers now includes 29 stores across 11 states.

GrowGen's entry into the Arizona market comes as voters consider Prop 207, which would legalize limited possession, cultivation and use of marijuana for adults ages 21 years or older. If approved, it is estimated that Arizona's cannabis market could grow from over $700 million market in 2020 into a $2 billion market, including both recreational and medical marijuana.

"We're excited to add Hydroponics Depot to our growing portfolio, with year-to-date sales in excess of $5 million and year-over-year growth at 50 percent," said Tony Sullivan, GrowGen's COO. "Importantly, it represents our 11^th state and our first retail operation in Arizona, a key market in GrowGen's growth plan. We see tremendous potential from both a medical and recreational standpoint."

Arizona Market and Projections:

• Arizona is one of the largest medical cannabis markets in the country, with projected 2020 sales of $700 million to $900 million.
• Retail sales of medical marijuana products in the state rose nearly 20% from January to May, according to the Arizona state estimates.
• If Prop 207 is approved, Arizona could grow from an estimated $770 million to $2.0 billion with both recreational and medical cannabis.

For more information about GrowGeneration, or to locate its stores, please visit www.growgeneration.com.

About GrowGeneration Corp.:
GrowGen owns and operates specialty retail hydroponic and organic gardening stores. Currently, GrowGen has 29 stores, which include 5 locations in Colorado, 6 locations in California, 2 locations in Nevada, 1 location in Washington, 4 locations in Michigan, 1 location in Arizona, 1 location in Rhode Island, 4 locations in Oklahoma, 1 location in Oregon, 3 locations in Maine and 1 location in Florida. GrowGen also operates an online superstore for cultivators at growgeneration.com. GrowGen carries and sells thousands of products, including organic nutrients and soils, advanced lighting technology and state of the art hydroponic equipment to be used indoors and outdoors by commercial and home growers. Our mission is to own and operate GrowGeneration branded stores in all the major states in the US and Canada. Management estimates that roughly 1,000 hydroponic stores are in operation in the US. By 2025, the global hydroponics system market is estimated to reach approximately $16 billion.

Forward Looking Statements:
This press release may include predictions, estimates or other information that might be considered forward-looking within the meaning of applicable securities laws. While these forward-looking statements represent our current judgments, they are subject to risks and uncertainties that could cause actual results to differ materially. You are cautioned not to place undue reliance on these forward-looking statements, which reflect our opinions only as of the date of this release. Please keep in mind that we are not obligating ourselves to revise or publicly release the results of any revision to these forward-looking statements in light of new information or future events. When used herein, words such as "look forward," "believe," "continue," "building," or variations of such words and similar expressions are intended to identify forward-looking statements. Factors that could cause actual results to differ materially from those contemplated in any forward-looking statements made by us herein are often discussed in filings we make with the United States Securities and Exchange Commission, available at: www.sec.gov, and on our website, at: www.growgeneration.com.

Connect:

• Website: www.GrowGeneration.com
• E-commerce: https://www.growgen.pro/
• Instagram: growgen
• Facebook: GrowGenerationCorp
• Twitter: @GrowGenOK

 

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SOURCE GrowGeneration

FAQ

What is GrowGeneration's recent acquisition related to?

GrowGeneration acquired Hydroponics Depot to enter the Arizona cannabis market.

How many stores does GrowGeneration now operate?

GrowGeneration now operates 29 stores across 11 states.

What are the sales figures for Hydroponics Depot?

Hydroponics Depot reported year-to-date sales exceeding $5 million.

What is the potential market growth for Arizona's cannabis industry?

Arizona's cannabis market could grow from $700 million in 2020 to $2 billion if Prop 207 is approved.