“The Hawthorne Collective transaction is the initial step in our plan to move our cannabis-adjacent subsidiaries into a separate and independent company as we further our strategic focus on our core lawn and garden business,” said Jim Hagedorn, chairman and CEO of ScottsMiracle-Gro. “For our shareholders, this will reduce the impact of the cannabis sector’s volatility on our company’s stock and provide opportunities to drive meaningful and immediate value creation through increased investments in our consumer business. As we further advance this plan, we next will look to separate The Hawthorne Gardening Company from ScottsMiracle-Gro by the close of fiscal 2025.”

Hagedorn continues:

“The Hawthorne companies were intended to capitalize on the legal cannabis sector, but the ability to achieve sustained growth within this industry has been challenged by four years of unkept promises resulting in total inaction at the federal level on cannabis-related issues. President Trump has supported a range of much-needed reforms, from rescheduling cannabis to adoption of the SAFER Banking Act. The actions he has endorsed would accelerate industry growth and increase the value of these investments. Until they become a reality, we believe the Hawthorne companies can be a greater asset within an independent cannabis-dedicated entity, specifically one in which our cultivation supply business can partner with a multi-state operator or leading cannabis brands.”

Under terms of the deal, ScottsMiracle-Gro transferred The Hawthorne Collective to the strategic partner in exchange for an interest-bearing promissory note. The company retains an option to reacquire The Hawthorne Collective or its assets should cannabis legalization and other measures to positively impact the industry be approved at the federal level. Terms of the deal were not disclosed.