Scotts Miracle-Gro eyes shrinkage after ‘botched’ rollout of CA rec cannabis

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.
3 comments on “Scotts Miracle-Gro eyes shrinkage after ‘botched’ rollout of CA rec cannabis
  1. MFB on

    Welcoming the big boys to our hell … maybe they can buy off the politicians to finally get hemp/marijuana de-listed since big shocker — not a “drug” and most powerful herbal medicine on the planet! Just a weapon to destroy people on so many levels it is frightening from perpetuation of debilitating health, to imprisoning “minorities” and quashing the anti-capitalism movement. Time to right the legal and societal wrongs!

    Reply
  2. Mike on

    one person’s botch is another’s advantage. of course that ca was gonna screw up was obvious after i attended one of their first seminars and realized they had no idea what they were doing. advantage big guy though, as the whole thing grew so cumbersome and cost prohibitive for any small business to enter legally. maybe by design to clear the decks for big business to grab it all thinking of projected money to be made. with water monitoring and huge bookkeeping and site restrictions they made sure the little guy was squeezed out but maybe by design cauz gov could track and collect on the huge tax bill more easily with a few large corps, like with the liquor industry. the news reports low legal compliance so the underground system will probably just continue. too bad in that the medical availability and development for openly helping sick people will stay restricted.

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