A decade removed from their original public declaration of eyeballing the cannabis industry, Scotts Miracle-Gro is betting even bigger on weed with its latest $150 million dollar investment.
Intentions were set back in 2011, Scotts Chief Executive Jim Hagedorn argued his company needed to start looking at weed to The Wall Street Journal.
“I want to target the pot market,” Mr. Hagedorn said. “There’s no good reason we haven’t.”
What seems so obvious today was a pretty crazy idea back then to the few people that were already dabbling in big money investors and cannabis. At the time, Troy Dayton had just founded The Arcview Group to help organize investors in the cannabis space.
“I remember when this story hit the Wall Street Journal ten years ago. We were one year into our ambitious experiment of Arcview which hypothesized that investment and legal profit pursuit would drive cannabis legalization,” Dayton told L.A. Weekly of receiving the news all those years ago. “It was a big moment that convinced us we were on the right track.
Dayton emphasized just how progressive the moment was for someone who’d gambled on the concept of big money driving reform and how right Hagedorn was in his predictions of where the then medical cannabis industry was heading.
“How has it turned out? Well, cannabis is legal in lots of places and is likely to be legal in the entire U.S. soon,” Dayton said. “Large business has played a much smaller role in that than I would have expected, but they have still played a major role. Of course, much of the moral decay that plagues other large highly regulated businesses now plagues cannabis. So, it’s a mixed bag, for sure. Maybe we can do better with psychedelics.”
The Hawthorne Collective is the mechanism Scotts will use to make their new play. It will invest the money into RIV Capital, a company that already has some big investments in the space. While there is just about every aspect of weed somewhere in the portfolio, some of the more recognizable brands are Gage Cannabis and data companies Headset and Leaflink.
The Hawthorne Collective released various details on the deal, but the main thing the money will empower is the launch and expansion of its U.S. cannabis operating and brand platform through RIV Capital. In the process the company will also become The Hawthorne Collectives mechanism for buying up other companies as the market consolidated westward following interstate legalization in the years ahead. Obviously a long term play, but they’ve already been talking about these kinds of long term weed investments for ten years. So this is just par for the course.
RIV Capital will also have access to Scotts’ entire apparatus. So as they tap into new cannabis markets and companies, they’ll be able to look at Scotts’ years of expertise in operations, R&D, sales and distribution. There will be plenty to take away from Scotts in the middle of the supply chain between growing the weed and putting it on shelves to reach the consumer. Albeit, the old grass supplements for the lawn didn’t face as many regulatory hurdles as their new grass supplements for people.
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