ScottsMiracle-Gro Announces Transfer of Hawthorne Collective

Core Insights - Scotts Miracle-Gro Company (SMG) has transferred its fully-owned subsidiary, The Hawthorne Collective, Inc., to an independent partner as part of a broader strategy to separate its cannabis-adjacent subsidiaries [1][3]. Company Strategy - The Hawthorne Collective was established in 2021 to invest in the cannabis industry, distinct from SMG's other subsidiary, Hawthorne Gardening Company, which focuses on cultivation products [2]. - The transfer is intended to reduce the impact of cannabis industry volatility on SMG's stock performance and to enhance shareholder value by allowing more investment in its core lawn and garden operations [3]. Financial Terms - The transfer agreement includes an interest-bearing promissory note, and SMG retains the option to repurchase The Hawthorne Collective or its assets if federal cannabis legalization occurs [4]. Financial Performance - Over the past year, SMG's shares have declined by 27.4%, compared to a 9.6% decline in the industry [6]. - For fiscal 2025, SMG expects an adjusted gross margin of around 30% and adjusted EBITDA to range from $570 million to$590 million, with U.S. consumer net sales projected to grow in low single digits [7].