Cannabis MSO Vireo to acquire Scotts Miracle-Gro subsidiary

Minneapolis-based multistate marijuana operator Vireo Growth plans to acquire The Hawthorne Gardening Co., the cannabis-oriented subsidiary of lawn and garden giant The Scotts Miracle-Gro Co.

As part of the deal announced Wednesday, Scotts Miracle-Gro will transition to what executives described as an “equity participation arrangement” with Vireo rather than maintaining direct ownership of Hawthorne, according to a Vireo Growth news release.

Exact terms of the deal, described as a memorandum of understanding (MOU), were not announced.

Scotts Executive Vice President Chris Hagedorn will be named to Vireo’s board when the transition is complete.

The deal represents another pivot away from cannabis for Scotts – and yet another audacious acquisition for Vireo.

Scotts Miracle-Gro’s $1.7 billion marijuana industry play

In a statement, Scotts Chairman and CEO Jim Hagedorn said the deal guarantees “a good home for Hawthorne that aligns with our interests while enabling us to sharpen the focus on our core business.”

“Vireo is well capitalized and has a strong platform and operating approach to be a market leader in the cannabis space,” he said.

Via Hawthorne, which Scotts launched in 2014 as part of a $1.7 billion play to enter the cannabis industry, the traditional mainstream gardening supply company scooped up cannabis lighting and nutrient companies across the country during the industry’s boom time before running into familiar trouble.

The company laid off 1,000 employees as sales dipped by 40% by mid-2023 – and at one point had to send $200 million worth of grow lights to the landfill for lack of a buyer.

Shares in Scotts, which soared to as high as $250 in April 2021, were trading at around $61.50 on Wednesday. Scotts is listed on the New York Stock Exchange.

Last year, Ohio-based Scotts spun off Hawthorne into a stand-alone operation in a move the company said would make it “more valuable.”

A few months later, the company also dumped its cannabis investment unit, called the Hawthorne Collective, to an unnamed “strategic partner.”

In a statement, Vireo CEO John Mazarakis said the company is focusing on strengthening its relationship with Scott as the companies move toward closing the deal.

“This proposed transaction builds on a foundation of mutual respect and trust developed over time,” Mazarakis said in a statement.

Marijuana MSO Vireo’s acquisition spree continues

For Vireo, the deal is the latest in a series of high-profile purchases.

Vireo embarked on a series of acquisitions beginning in December 2024 when it received $75 million in equity financing to acquire four single-state operators: Deep Roots Harvest in Nevada; The Flowery in Florida; Proper Brands in Missouri; and WholesomeCo Cannabis in Utah.

It continued its buying spree last year, closing on a deal in October to buy 86% of struggling MSO Schwazze’s convertible notes for $62 million following a default.

In December, Vireo announced it would acquire some of MSO PharmaCann’s Colorado assets for $49 million, and earlier this month, it said it would acquire former “Uber of Weed” retail and delivery platform Eaze in a $47 million all-stock deal.

A flurry of M&A activity in the cannabis industry followed President Donald Trump’s Dec. 18 executive order to downgrade marijuana’s status from Schedule 1 to Schedule 3.