Scotts Miracle-Gro Company last week announced it is transferring The Hawthorne Collective, Inc. – which holds investments in Fluent, a vertically integrated cannabis company with licenses and operations in Florida, Pennsylvania, Texas and New York – to an unnamed “independent strategic partner” in exchange for an interest-bearing promissory note.
Hawthorne Collective was created in 2021 as a vehicle to invest in areas of the cannabis industry that Scotts’s Hawthorne Gardening Company subsidiary does not pursue.
In a statement, Jim Hagedorn, chairman and CEO of ScottsMiracle-Gro, called the move an “initial step” in the company’s plan to move its “cannabis-adjacent subsidiaries into a separate and independent company” as Scotts furthers its focus on its core lawn and garden business.
“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.” — Hagedorn, in a press release
Hagedorn added that 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,” Hagedorn said in the statement. “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 the terms of the deal, Scotts retains an option to reacquire Hawthorne Collective or its assets should cannabis legalization and other measures to positively impact the industry be approved at the federal level.
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