ScottsMiracle-Gro Launches Cannabis Investment Entity with Huge Down Payment

Investing in the cannabis industry may have been a bit easier thanks to an unlikely player: ScottsMiracle-Gro (NYSE: SMG) Was announced press release Today, the launch of Hawthorne Collective, a newly established subsidiary. It focuses on strategic minority investments in areas of the cannabis industry that the Hawthorne Gardening Company is not currently pursuing. Its hydroponics, lighting and nutrition sector focuses on cannabis.

In addition, Hawthorne Collective will provide $ 150 million convertible bonds based in Toronto, Ontario. RIV Capital In Canada (TSX: RIV) (OTC: CNPOF), a cannabis investment and acquisition company currently listed on the Toronto Stock Exchange.

Company representatives acknowledged the challenges that cannabis companies experience when working with federal insurance banks, but said they believe the regulations will change.

Jim Hagedorn, Chairman and Chief Executive Officer of ScottsMiracle Gross, said: “With a good understanding of current banking and legal requirements, The Collective is designed to ultimately allow us to directly participate in larger markets as the legal environment changes over time. “

RIV Capital has indicated that it will use the funds provided by Hawthorne Collective for general business and other legal purposes. This may include additional investments or acquisitions.

Upon closing, RIV Capital will be the preferred vehicle for future investments in Hawthorne Collective. The transaction is expected to close in the fourth quarter of 2021.

“By making a small non-equity investment in RIV Capital, this first transaction has little short-term impact on our performance,” said Hagedorn. “This approach means adopting capital that is not available for short-term investments and delivering faster returns, but being a partner of RIV Capital, the long-term approach ultimately creates meaningful value for shareholders. I’m sure. “

Hagedorn acknowledged the money that the cannabis industry brings, but it cannot be ignored. He continued. “Certainly, the growth of the Hawthorne Gardening Company over the last six years has created significant shareholder value, and a rare level of expertise and insight into cannabis space without being involved in the plant-touching aspects of the industry. So we are starting to invest in other areas of the industry through The Collective, while continuing to pursue near-strategic acquisitions to enter the existing Hawthorne Gardening business. “

Scotts Miracle-Glo History

Civil War veteran long before cannabis was outlawed in the United States Orlando McLean Scott began selling lawn seeds in 1868, And his family did not actually stop as the company eventually expanded into several other areas. Miracle-Gro was developed in 1951 and has usually become a major nutrient in flowers and foliage plants. Brands can now be found virtually anywhere.

The company is undoubtedly seeing a share of criticism, which continued until it entered the cannabis industry. Scotts Miracle-Gro entered the pot business in 2015 Acquisition of General Hydroponics Inc. and Bio-Organic Solutions Inc.However, the company has been criticized for its involvement with Monsanto, a malicious pesticide and agricultural biotechnology company.

ScottsMiracle Gro said some of these concerns, especially Concerns about Roundup— And even more Announced that it will stop production of products containing glyphosate.. As a background, ScottsMiracle Gro has been distributing Roundup since 1998, but does not own it.

Today, with sales of approximately $ 4.1 billion, the company is one of the world’s largest marketers of branded consumer products for lawn and garden care. The Hawthorne Gardening Company, a wholly owned subsidiary of ScottsMiracle-Gro, is a leading provider of nutrients, lighting and other materials used for indoor and hydroponic cultivation of cannabis.