Scotts Miracle-Gro CEO Jim Hagedorn said that the company is going to have to cut staff and restructure the company as sales took a hit from the “completely botched legalization” of cannabis in California, according to a Columbus Business First report. The company expects to save $15 million consolidating operations and $20 million from cutting duplicate jobs, although the company has not indicated how many jobs they expect to eliminate.
Since 2015, Scotts has spent $1 billion to grow its Hawthorne Gardening Co. hydroponics subsidiary, including investing in or the acquisitions of: AeroGrow Internatinal Inc; American Agritech LLC, DBA Botanicare; Agrolux Holding B.V.; Gavita International B.V.; Can-Filters; General Hydroponics; and, most recently, Sunlight Supply, Inc – which is expected to close June 1.
“We built this whole business based on the idea the (marijuana industry) would go professional. It’s really disappointing to see the mayhem. It’s grown up in a really entrepreneurial way naturally. The maturation of the marketplace as it goes legal has been really disruptive.” – Hagedorn to Columbus Business First
The agreement to acquire Sunlight Supply – for $450 million – was the company’s largest to date but Hagedorn said it was worth the cost because it represents the “missing piece” of supply chain management for Hawthorne.