The transaction, completed on April 9 2026, saw Scotts Miracle‑Gro transfer its Hawthorne Gardening Company to Vireo Growth Inc. in exchange for 213 million subordinate voting shares and warrants covering an additional 80 million shares. Vireo also acquired approximately $35 million in cash held by Hawthorne, $58 million in net working capital, and $20 million in inventory, giving the deal a total value of roughly $133 million in equity and cash assets.
Hawthorne’s performance had been a drag on Scotts’ earnings. The cannabis‑related business posted a 37 % decline in revenue in fiscal 2024, falling to $294.7 million, and its margins compressed as oversupply in the cannabis market forced lower pricing and higher inventory costs. The company’s revenue had peaked in 2021 and has since struggled to maintain market share against a crowded field of growers and distributors.
By divesting Hawthorne, Scotts removes a volatile and low‑margin segment from its balance sheet, allowing the company to focus on its core lawn and garden brands—Scotts, Miracle‑Gro, Ortho, and Tomcat—which drive the majority of its revenue and profit. Management said the exclusion of Hawthorne will contribute to margin recovery and support the company’s fiscal 2026 guidance, which remains unchanged after the transaction.
"The divestiture of Hawthorne demonstrates further progress toward our strategy to drive long‑term growth in our core lawn and garden business. We are focused on making sustained investments to deliver operational efficiencies and groundbreaking innovation while engaging consumers in powerful ways. Additionally, the exclusion of Hawthorne will contribute to our margin recovery and other full‑year targets." – Jim Hagedorn, chairman and CEO of Scotts Miracle‑Gro
"At the same time, we've found a good home for Hawthorne that will preserve its upside potential and create opportunities to recapture value from the Hawthorne‑related investments we have made over the years." – Jim Hagedorn, chairman and CEO of Scotts Miracle‑Gro
"Vireo has a bold vision for its consumer brands in the cannabis space and for Hawthorne in cultivation supply. It has strong leadership and a solid balance sheet to see that vision through, and I look forward to working with the team to help shape future strategies." – Chris Hagedorn, executive vice president of Scotts Miracle‑Gro
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