Scotts Miracle-Gro is getting into the cannabis business, as the company’s CEO Jim Hagedorn sees the budding industry as an investment just too good to pass up. Hagedorn literally grew up with Miracle-Gro, which his father started as a small startup and built into a nationally known brand.
In 1995 they merged with Scotts, and in 2001 Hagedorn formally filled the CEO role for the company. Today Scotts Miracle-Gro has $3 billion in annual sales, and pulls down roughly $160 million in profit.
Hagedorn must see the new cannabis market as a solid investment to bet the company he has worked his whole life on it succeeding. He qualified his view of the cannabis marketplace exactly saying, “it is the biggest thing I’ve ever seen in lawn and garden.”
One day not too long ago Hagedorn was visiting a home improvement store in Yakima, Washington and could not help but notice a new and interesting addition to the store’s shelves; hydroponic growing equipment.
Smelling opportunity, he took the time to personally speak with a store manager to better understand the demand in this new segment. In a moment which surely had dollar signs flashing in Hagedorn’s eyes, the manager explained that not only are customers demanding the store carry this type of equipment, they are willing to pay top dollar for it.
Hagedorn knew if he didn’t get his company into this new market, they would be missing an opportunity of a lifetime.
Soon after a new company was born under Scotts Miracle-Gro named Hawthorne, headed by Jim’s son Chris Hagedorn. Seems that the Hagedorn family is familiar with the classic business quote: the best time to be in the pick and shovel business is during a gold rush.
In 2015 alone the company saw over 300% growth at a whopping $250 million in total sales. The future will likely see Hawthorne split from its parent company and become its own entity.
Hawthorne has been busy absorbing companies in an effort to provide the top of the line technology in their equipment and products. Just this past Monday Hawthorne acquired Botanicare, which produces plant nutrient products and hydroponic growing systems.
Prior to this move they purchased the majority stake in a European grow light manufacture Gavita Holland BV. Hawthorne’s parent company, Scotts Miracle-Gro, also acquired General Hydroponics who came with a quality customer base of cultivators where the activity is already legal.
Hagedorn noted that the buying spree has come to an end, and they will focus now on getting a huge return on all their recent investments.
Thus far four states and Washington D.C. have legalized recreational cannabis, but another whopping nine states will have the opportunity to vote for recreational this coming November.
With potential market growth like this on the horizon, it’s no wonder why Hagedorn felt compelled to be the early bird.