Scotts Miracle-Gro, which has invested heavily in the cannabis industry, plans to cut jobs and consolidate partly because of how the legal marijuana program has rolled out in California and elsewhere.
Columbus (Ohio) Business First reported that Ohio-based Scotts wants to consolidate after the company grew its hydroponics subsidiary, Hawthorne Gardening, via $1 billion in acquisitions.
Last month, Scotts agreed to buy the nation’s largest hydroponic distributor for $450 million – an acquisition that one company official said will result in overlap between the two businesses.
Columbus Business First said Scotts hasn’t yet settled on the number of jobs or locations that will be affected.
Scotts CEO Jim Hagedorn said Hawthorne’s sales suffered during the first half of 2018 because of the “completely botched legalization” of adult-use marijuana in California.
“We built this whole business based on the idea the (marijuana industry) would go professional,” Hagedorn said. “It’s really disappointing to see the mayhem.”
Here’s what you need to know:
- Scotts, which trades on the New York Stock Exchange as SMG, is planning on $15 million in restructuring costs but hopes to make that up over time.
- The company projects up to $35 million in annual operating savings after next year, with $20 million coming from eliminating redundant jobs and $15 million from consolidating operations in a manufacturing property that will come with a recent acquisition.