ScottsMiracle-Gro Continues to Advance Consumer and Cannabis Strategies
ScottsMiracle-Gro (NYSE: SMG) has announced the transfer of its wholly-owned subsidiary, The Hawthorne Collective, to an independent strategic partner. This move marks the first step in separating its cannabis-related businesses from its core lawn and garden operations.
The company plans to separate The Hawthorne Gardening Company from ScottsMiracle-Gro by the end of fiscal 2025. The transfer was executed in exchange for an interest-bearing promissory note, with SMG retaining an option to reacquire The Hawthorne Collective if federal cannabis legalization occurs.
CEO Jim Hagedorn cited the cannabis sector's volatility and federal-level inaction as key reasons for the separation. The company aims to reduce cannabis-related impact on its stock and focus on value creation through its consumer business. The Hawthorne Collective's holdings include investments in Fluent, a cannabis company operating in Florida, Pennsylvania, Texas, and New York.
ScottsMiracle-Gro (NYSE: SMG) ha annunciato il trasferimento della sua controllata interamente posseduta, The Hawthorne Collective, a un partner strategico indipendente. Questa mossa segna il primo passo nella separazione delle sue attività legate alla cannabis dalle operazioni principali di prato e giardino.
La società prevede di separare The Hawthorne Gardening Company da ScottsMiracle-Gro entro la fine dell'esercizio fiscale 2025. Il trasferimento è stato eseguito in cambio di una cambiale con interessi, con SMG che mantiene un'opzione per riacquistare The Hawthorne Collective se si verifica la legalizzazione della cannabis a livello federale.
Il CEO Jim Hagedorn ha citato la volatilità del settore della cannabis e l'inazione a livello federale come motivi chiave per la separazione. L'azienda mira a ridurre l'impatto legato alla cannabis sul proprio titolo e a concentrarsi sulla creazione di valore attraverso il suo business consumer. Le partecipazioni di The Hawthorne Collective includono investimenti in Fluent, un'azienda di cannabis che opera in Florida, Pennsylvania, Texas e New York.
ScottsMiracle-Gro (NYSE: SMG) ha anunciado la transferencia de su filial de propiedad absoluta, The Hawthorne Collective, a un socio estratégico independiente. Este movimiento marca el primer paso en la separación de sus negocios relacionados con el cannabis de sus operaciones principales de césped y jardín.
La empresa planea separar The Hawthorne Gardening Company de ScottsMiracle-Gro para finales del ejercicio fiscal 2025. La transferencia se realizó a cambio de una nota promisoria con intereses, con SMG manteniendo una opción para reacquidir The Hawthorne Collective si se produce la legalización federal del cannabis.
El CEO Jim Hagedorn citó la volatilidad del sector del cannabis y la inacción a nivel federal como razones clave para la separación. La empresa busca reducir el impacto relacionado con el cannabis en sus acciones y enfocarse en la creación de valor a través de su negocio de consumo. Las participaciones de The Hawthorne Collective incluyen inversiones en Fluent, una empresa de cannabis que opera en Florida, Pennsylvania, Texas y Nueva York.
ScottsMiracle-Gro (NYSE: SMG)는 전액 출자 자회사인 The Hawthorne Collective를 독립 전략 파트너에게 이전한다고 발표했습니다. 이 조치는 자사의 대마초 관련 사업을 핵심 잔디 및 정원 운영에서 분리하는 첫 번째 단계로 여겨집니다.
회사는 2025 회계연도 말까지 The Hawthorne Gardening Company를 ScottsMiracle-Gro와 분리할 계획입니다. 이 이전은 이자를 포함한 약속어음과 교환하여 실행되었으며, SMG는 연방 대마초 합법화가 이루어질 경우 The Hawthorne Collective를 재매입할 수 있는 옵션을 유지하고 있습니다.
CEO 짐 해거돈은 대마초 산업의 변동성과 연방 차원의 무활동을 분리의 주요 이유로 언급했습니다. 회사는 대마초 관련 영향을 주식에서 줄이고 소비자 사업을 통한 가치 창출에 집중하는 것을 목표로 하고 있습니다. The Hawthorne Collective의 보유 자산에는 플로리다, 펜실베이니아, 텍사스, 뉴욕에서 운영되는 대마초 회사인 Fluent에 대한 투자가 포함됩니다.
ScottsMiracle-Gro (NYSE: SMG) a annoncé le transfert de sa filiale entièrement détenue, The Hawthorne Collective, à un partenaire stratégique indépendant. Ce mouvement marque la première étape dans la séparation de ses activités liées au cannabis de ses opérations principales de pelouse et de jardin.
L'entreprise prévoit de séparer The Hawthorne Gardening Company de ScottsMiracle-Gro d'ici la fin de l'exercice fiscal 2025. Le transfert a été effectué en échange d'une note de promesse portant intérêt, SMG conservant une option de racheter The Hawthorne Collective si la légalisation fédérale du cannabis se produit.
Le PDG Jim Hagedorn a cité la volatilité du secteur du cannabis et l'inaction au niveau fédéral comme des raisons clés de la séparation. L'entreprise vise à réduire l'impact lié au cannabis sur ses actions et à se concentrer sur la création de valeur à travers son activité de consommation. Les participations de The Hawthorne Collective incluent des investissements dans Fluent, une entreprise de cannabis opérant en Floride, en Pennsylvanie, au Texas et à New York.
ScottsMiracle-Gro (NYSE: SMG) hat die Übertragung seiner hundertprozentigen Tochtergesellschaft, The Hawthorne Collective, an einen unabhängigen strategischen Partner angekündigt. Dieser Schritt markiert den ersten Schritt zur Trennung seiner cannabisbezogenen Geschäfte von seinen Kernaktivitäten im Bereich Rasen und Garten.
Das Unternehmen plant, The Hawthorne Gardening Company bis Ende des Geschäftsjahres 2025 von ScottsMiracle-Gro zu trennen. Die Übertragung wurde im Austausch gegen eine zinsbringende Schuldanerkennung durchgeführt, wobei SMG die Option behält, The Hawthorne Collective zurückzukaufen, falls eine bundesweite Legalisierung von Cannabis erfolgt.
CEO Jim Hagedorn nannte die Volatilität des Cannabis-Sektors und die Untätigkeit auf Bundesebene als wesentliche Gründe für die Trennung. Das Unternehmen zielt darauf ab, die Auswirkungen von cannabisbezogenen Themen auf seine Aktien zu verringern und sich auf die Wertschöpfung durch sein Konsumgeschäft zu konzentrieren. Die Beteiligungen von The Hawthorne Collective umfassen Investitionen in Fluent, ein Cannabis-Unternehmen, das in Florida, Pennsylvania, Texas und New York tätig ist.
- Strategic separation reduces exposure to volatile cannabis sector
- Retained option to reacquire Hawthorne Collective upon federal legalization
- Company maintains strong $3.6 billion in sales
- Focus on core lawn and garden business could drive immediate value creation
- Four years of challenges in cannabis sector due to federal inaction
- Separation could result in potential value loss if cannabis market improves
- Cannabis investments haven't achieved sustained growth as expected
Insights
ScottsMiracle-Gro's transfer of The Hawthorne Collective represents a significant strategic pivot that prioritizes stability in its core lawn and garden business over cannabis sector exposure. This restructuring addresses a classic conglomerate discount problem where cannabis volatility has likely weighed on SMG's overall valuation.
The deal structure—receiving an interest-bearing promissory note while retaining reacquisition rights—demonstrates financial pragmatism. It provides immediate value while preserving upside potential if federal cannabis reform eventually materializes. For shareholders, this creates a cleaner investment narrative focused on SMG's dominant $3.6 billion consumer business where it enjoys substantial brand equity and market leadership.
This restructuring effectively separates two businesses with fundamentally different risk profiles, growth trajectories, and capital requirements. By planning to further separate The Hawthorne Gardening Company by fiscal year-end 2025, management is acknowledging that cannabis-adjacent businesses might achieve better valuations and operational flexibility as independent entities.
While this signals that cannabis investments haven't delivered expected returns, it also demonstrates management's willingness to adapt to market realities rather than doubling down on underperforming segments. The move should allow for increased investment in core operations where SMG maintains competitive advantages, potentially improving margins and cash flow predictability—outcomes that typically command higher valuation multiples.
This strategic retreat by ScottsMiracle-Gro reflects the harsh reality facing cannabis-adjacent public companies after years of regulatory stagnation. CEO Hagedorn's explicit reference to "four years of unkept promises resulting in total inaction at the federal level" signals deep frustration shared across the industry and acknowledges that near-term catalysts remain elusive.
The transfer specifically mentions investments in Fluent (previously Cansortium), which operates in -license states including Florida and New York—markets that have experienced their own regulatory complications and competitive pressures. By separating these assets, SMG insulates its core business from cannabis market volatility while maintaining strategic optionality.
Most revealing is the company's intention to potentially pair Hawthorne Gardening with MSOs or cannabis brands after separation. This suggests recognition that vertical integration may be necessary for capturing value in this fragmented industry—something difficult to achieve within SMG's current corporate structure.
The calculated nature of this exit—retaining reacquisition rights specifically tied to federal reform—shows SMG still sees long-term sector value but is unwilling to continue weathering near-term volatility and ongoing capital requirements. For the broader cannabis ecosystem, this recalibration by a major ancillary player suggests we're likely entering a period of accelerated industry consolidation as companies adjust to a longer timeline for meaningful federal reform.
Transfer of Hawthorne Collective reflects focus on separating cannabis holdings and driving greater growth in core lawn and garden business
MARYSVILLE, Ohio, April 10, 2025 (GLOBE NEWSWIRE) -- The Scotts Miracle-Gro Company (NYSE: SMG), the world’s leading marketer of branded consumer lawn and garden products as well as a leader in indoor and hydroponic growing products, today announced the transfer of its wholly-owned subsidiary, The Hawthorne Collective, Inc., to an independent strategic partner.
The Company created The Hawthorne Collective in 2021 as a vehicle to invest in areas of the cannabis industry that are not pursued by its Hawthorne Gardening Company subsidiary, a leader in cultivation supplies such as lighting, nutrients and other materials for cannabis growers and hydroponic cultivators. Included within The Hawthorne Collective’s holdings are investments in Fluent, previously Cansortium, a vertically integrated cannabis company with licenses and operations in Florida, Pennsylvania, Texas and New York.
“The Hawthorne Collective transaction is the initial step in our plan to move our cannabis-adjacent subsidiaries into a separate and independent company as we further our strategic focus on our core lawn and garden business,” said Jim Hagedorn, chairman and CEO of ScottsMiracle-Gro. “For our shareholders, this will reduce the impact of the cannabis sector’s volatility on our Company’s stock and provide opportunities to drive meaningful and immediate value creation through increased investments in our consumer business. As we further advance this plan, we next will look to separate The Hawthorne Gardening Company from ScottsMiracle-Gro by the close of fiscal 2025.
“The Hawthorne companies were intended to capitalize on the legal cannabis sector, but the ability to achieve sustained growth within this industry has been challenged by four years of unkept promises resulting in total inaction at the federal level on cannabis-related issues. President Trump has supported a range of much-needed reforms, from rescheduling cannabis to adoption of the SAFER Banking Act. The actions he has endorsed would accelerate industry growth and increase the value of these investments. Until they become a reality, we believe the Hawthorne companies can be a greater asset within an independent cannabis-dedicated entity, specifically one in which our cultivation supply business can partner with a multi-state operator or leading cannabis brands.”
Under terms of the deal, ScottsMiracle-Gro transferred The Hawthorne Collective to the strategic partner in exchange for an interest-bearing promissory note. The Company retains an option to reacquire The Hawthorne Collective or its assets should cannabis legalization and other measures to positively impact the industry be approved at the federal level.
About ScottsMiracle-Gro
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For investor inquiries:
Brad Chelton
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Treasury, Tax and Investor Relations
brad.chelton@scotts.com
(937) 309-2503
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Tom Matthews
Chief Communications Officer
tom.matthews@scotts.com
(937) 844-3864
FAQ
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