ScottsMiracle-Gro (NYSE: SMG) has announced the transfer of its wholly-owned subsidiary, The Hawthorne Collective, to an independent strategic partner. This move marks the first step in separating its cannabis-related businesses from its core lawn and garden operations.
The company plans to separate The Hawthorne Gardening Company from ScottsMiracle-Gro by the end of fiscal 2025. The transfer was executed in exchange for an interest-bearing promissory note, with SMG retaining an option to reacquire The Hawthorne Collective if federal cannabis legalization occurs.
CEO Jim Hagedorn cited the cannabis sector's volatility and federal-level inaction as key reasons for the separation. The company aims to reduce cannabis-related impact on its stock and focus on value creation through its consumer business. The Hawthorne Collective's holdings include investments in Fluent, a cannabis company operating in Florida, Pennsylvania, Texas, and New York.
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