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High Hopes at Miracle-Gro in Medical Marijuana Field

FruityBud

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Scotts Miracle-Gro Co. has long sold weed killer. Now, it's hoping to help people grow killer weed.

In an unlikely move for the head of a major company, Scotts Chief Executive Jim Hagedorn said he is exploring targeting medical marijuana as well as other niches to help boost sales at his lawn and garden company.

"I want to target the pot market," Mr. Hagedorn said in an interview. "There's no good reason we haven't."

Sales at Scotts rose 5% last year to $2.9 billion. But the Marysville, Ohio, company relies on sales at three key retailers—Home Depot Inc., Lowe's Cos. and Wal-Mart Stores Inc.—for nearly two-thirds of its revenue. With consumers still cautious about spending, the retailers aren't building new stores as quickly as they used to, making growth for suppliers like Scotts harder to come by. Against that backdrop, Mr. Hagedorn has pushed his regional sales presidents to look for smaller pockets of growth, such as the marijuana market, that together could produce a noticeable bump in sales.

Sixteen states have legalized medical marijuana, the largest being California and Colorado. The market will reach $1.7 billion in sales this year, according to a report by See Change Strategy LLC, an information data services company.

While the report focuses on revenue from growers and dispensaries, Kris Lotlikar, president of See Change, said the market for companies selling hydroponic equipment and professional services is also thriving.

"We see very good growth for these types of companies as the medical-marijuana business grows," he said.

Marijuana use remains illegal under federal law, but federal raids on medical dispensaries have eased since President Obama took office. And while major public companies haven't openly targeted the market, in recent months medical-marijuana companies have sought money from venture capitalists and signaled future IPOs.

Centennial Seed Co., a Boulder, Colo., medical-cannabis seed seller, is seeking $500,000 through a private offering. General Cannabis Inc., whose stock trades on the Pink Sheets, supports the medical-marijuana market with financial and Internet services.

The 55-year-old Mr. Hagedorn isn't a typical suit-wearing CEO. A former F-16 fighter pilot, he flies his Cessna to and from meetings in Port Washington, N.Y., where he grew up, and the company's headquarters in Ohio, much to the chagrin of his board. He also peppers his language with swear words and military references, and he showed up at the office on a recent June day in jeans and sneakers.

Mr. Hagedorn took over Miracle-Gro from his father, who co-founded the company. The idea to merge with Scotts dawned on him after he looked at the company's market value in 1995, he said, so he called his father's tax lawyer to vet the idea. "I said, 'Bob, I got this f— crazy idea. Do you think it'd be f— possible to take over Scotts?'" he recalls, sitting in the Port Washington office that his father once occupied.

Mr. Hagedorn is serious about sales growth, no matter how small. On a recent trip to a Farmingdale, N.Y., Home Depot, he saw a customer having a difficult time choosing soil. "C'mon, go help him out," he told Mike Carbonara, Scotts' president for the Northeast. A few minutes later, the customer was walking away with a bag of Miracle-Gro. Over the next half hour, Mr. Carbonara influenced three more sales.

Targeting marijuana isn't the only way Mr. Hagedorn is pursuing growth outside the national chains. Scotts is also looking to sell more through grocery stores.

And the company is recultivating its ties to independent lawn-and-garden-store owners, including offering them exclusive products. Mr. Hagedorn strained those ties with a 2009 speech in which he criticized the owners for not doing enough to promote Scotts products, prompting many owners to walk out.

"I don't give speeches to independents anymore," he said.

To target marijuana growers, Scotts would likely buy niche dirt companies that already exist rather than create its own line of branded products.

Raids on pot-growing operations have turned up Scotts products. Mr. Hagedorn takes that as a good sign of brand awareness, but he fears that some growers would be reluctant to use a mainstream product.

Rollitup.org, a website geared toward the marijuana-growing community, has several forums that debate Miracle-Gro's effectiveness. A user with the moniker Weedqueen12 wrote: "i think [Miracle-Gro] works well." Another user, dannyboy602, countered that Miracle-Gro causes pot plants to "burn and stress."

In the past, Scotts wouldn't have considered pursuing businesses or product lines that generated less than $10 million a year in revenue. But, Mr. Hagedorn said, "We can't operate our business like that anymore."

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Mutt

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HAHAHA!!!! You got your work cut out for you MG. You're YEARS behind the game now.
 

Erbal

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To target marijuana growers, Scotts would likely buy niche dirt companies that already exist rather than create its own line of branded products.
If I read this correctly, he just intends to buy out a company already in the market making a profit, thus allowing them to just plop into the market and start raking in cash. I don't think it will go as smoothly as they might expect, but I don't think that it will go bad either.

This is just another story of capitalism moving in on a growing market. Honestly, I have mixed feelings over this. Having more businesses with large pockets in the industry can help lobby DC. After all, MG would make more $$$ on MJ grow products if more people were able to grow, either MMJ or decriminalized MJ.

What does disappoint me though is they want to take over a business instead of releasing their own product which would produce more choices for the consumer.
 

Hamster Lewis

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Mutt said:
HAHAHA!!!! You got your work cut out for you MG. You're YEARS behind the game now.

From the sounds of it the only work they are interested in doing is buying out companies who already make soil that will work with MJ.
For the record I love their Seed Starter Mix.
 

Old_SSSC_Guy

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oh great - lots more crap chemical ferts. ought to keep newbies from trying a second crop after they taste their first one.

there is no more lied-about danger-filled environmentally-damaging fert out there as bad as miracle-gro. bet they make it in Bhopal.
 

Mutt

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Old_SSSC_Guy said:
oh great - lots more crap chemical ferts. ought to keep newbies from trying a second crop after they taste their first one.

there is no more lied-about danger-filled environmentally-damaging fert out there as bad as miracle-gro. bet they make it in Bhopal.
run-off is a huge problem that goes ignored. Take for example golf courses. near any well-maintained course there is a water pollution problem.
 
R

Roddy

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Mutt said:
run-off is a huge problem that goes ignored. Take for example golf courses. near any well-maintained course there is a water pollution problem.
None have ever been reported in the 31 years we've owned ours....but I hear you here. Of course, most courses (and parks, hospitals etc etc) are using weed killer with agent orange (or used to....killed my dad).
 
D

dman1234

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This is just buisiness, the more options for the consumer the better for the consumer.
It wouldnt be MG, it would be a new product or existing product packaged under a new name.
 

Old_SSSC_Guy

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MG was marketed as one of the first ferts which went into solution 100% leaving no precipitate (granular sandy looking stuff which doesn't melt). its one of the reasons its a crap nutrient based entirely on byproduct chemicals. plus its manufacturer by a scum bag checmical company, Scotts. google TerraCycle and see the kind of trips those yoyos come up with.

i heard that MG is actually manufactured by close to 55 different subcontractors who just follow the patented crap formula. chemicals are chemicals to them, no matter who mixes them together.
 

Herm

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Mutt said:
HAHAHA!!!! You got your work cut out for you MG. You're YEARS behind the game now.
Yeah because you know a company that has 2.7 BILLION dollars in sales can't just go out and buy whatever it wants.
 

Mutt

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Herm said:
Yeah because you know a company that has 2.7 BILLION dollars in sales can't just go out and buy whatever it wants.
don't get me going on the MG market....sellin pollution for instant satisfaction...come on...NEON green?!?!?!?! still tryin to figure out what "moisture control" is. :confused:
Funky PH, horrible run-off, salt build up like it's dead sea, and makes deers antlers grow haywire. Not my idea of a good fert company :p but they do grow some heck outa some roses LOL
 

Herm

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Not arguing about quality but nothing is stopping them from going out and buying say Fox Farms or Happy frog.
 

Old_SSSC_Guy

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the inability to mass produce a consistant quality of product nationwide. they tried it maybe 10-15 year ago and failed miserably - as they should.
 

Herm

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I think you underestimate the new CEO's desire to increase profits.
 

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