Vireo Growth Inc. has updated its non‑binding Memorandum of Understanding to acquire The Hawthorne Gardening Company from Scotts Miracle‑Gro Company. The revised agreement is a share‑based transaction that will see Vireo issue 206 million subordinate voting shares and a warrant to purchase 80 million shares at $0.85 each, in addition to a cash payment of at least $35 million, approximately $50 million of net working capital, and roughly $20 million of inventory. The parties expect the transaction to close in the second quarter of 2026, with a five‑business‑day window following the March 30 announcement.
The deal aligns with Vireo’s strategy of building a national procurement and supply‑chain platform. By adding Hawthorne’s established brand, distribution network, and product portfolio, Vireo can deepen its vertical integration, improve margin potential, and accelerate growth across its cannabis operations. For Scotts Miracle‑Gro, divesting Hawthorne removes a volatile segment that has contributed to earnings volatility and allows the company to refocus capital and management attention on its core lawn‑and‑garden business.
Hawthorne’s performance has been uneven. Revenue peaked in 2021 and fell 37% to $294.7 million in fiscal 2024 after the company exited its third‑party distribution business. The volatility has been driven by oversupply in the cannabis market and shifting demand from cultivators. The sale is expected to help Scotts reduce the losses associated with the cannabis segment and streamline its financials.
Jim Hagedorn, Chairman and CEO of Scotts Miracle‑Gro, said, "After evaluating our strategic options, we concluded the most compelling path forward for our shareholders is to transition to an equity participation arrangement with Vireo. Vireo is well capitalized and has a strong platform and operating approach to be a market leader in the cannabis space. We have found a good home for Hawthorne that aligns with our interests while enabling us to sharpen the focus on our core business." John Mazarakis, CEO of Vireo Growth, added, "We’ve valued our working relationship with Scotts Miracle‑Gro and the Hawthorne team, and they have been excellent to work with throughout our discussions. This proposed transaction builds on a foundation of mutual respect and trust developed over time. We’re pleased to deepen our relationship through closer collaboration with Scotts Miracle‑Gro and by welcoming Chris Hagedorn to our Board. Our focus now is on executing thoughtfully and responsibly in a way that reflects the expectations of a partner of this caliber as we move toward closing."
Scotts Miracle‑Gro reported a GAAP net loss of $47.8 million ($0.83 per share) for Q2 2026, while Vireo Growth posted revenue of $99.38 million and a loss of $28.01 million in 2024. The transaction signals a strategic pivot for Scotts away from cannabis and a consolidation move for Vireo, positioning both companies to better manage risk and pursue growth in their respective core markets.
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