Weed Kills: How Investing In Cannabis Almost Took Down Scotts Miracle-Gro

The gardening giant bet $1.7 billion on lighting, nutrients and other pot cultivation tools—and lost. But CEO Jim Hagedorn and his son Chris are plotting a comeback. Here’s how they plan to smoke the competition.

Back in 2015, when only four states—Alaska, Colorado, Oregon and Washington—had legalized recreational marijuana, Hawthorne started spending hundreds of millions acquiring companies like General Hydroponics (for $120 million), a Santa Rosa-based indoor gardening supply company, to get into the marijuana industry’s ancillary market.

The move helped the Hagedorns grab glossy magazine headlines and Scotts’ stock price started to rise from the mid-$50 range to above $60 a share. By May 2021, the company acquired more cannabis-focused companies like Luxx Lighting (purchased for $213.2 million), a grow-light company started by the founders of respected weed brand Jungle Boys, and brokered a $150 million convertible debt deal with Canadian cannabis investment vehicle RIV Capital. Scotts’ stock bloomed to a robust $244.

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