ScottsMiracle-Gro Poised to Advance Cannabis Strategy in New York, Florida and other states
Rhea-AI Summary
ScottsMiracle-Gro (NYSE: SMG) has announced its support for the merger between RIV Capital and Cansortium, aiming to enhance its stake in the cannabis market in high-growth states like New York and Florida. This move aligns with ScottsMiracle-Gro's 2021 strategy, having invested $175 million in RIV Capital. The merger will see The Hawthorne Collective, a subsidiary of ScottsMiracle-Gro, exchange its RIV notes for non-voting exchangeable shares in Cansortium. This strategic combination is expected to bolster cannabis cultivation and retail operations, providing significant value-creation opportunities. RIV Capital has already made strides in New York's cannabis market, while Cansortium has established a strong presence in Florida, Texas, Pennsylvania, and Alabama.
Positive
- ScottsMiracle-Gro supports the merger between RIV Capital and Cansortium, enhancing its cannabis investment strategy.
- RIV Capital has built successful cannabis cultivation operations and a flagship dispensary in New York.
- The merger is expected to accelerate expansion in New York and fund growth in Florida.
- Cansortium holds licenses in key states: Florida, Texas, Pennsylvania, and Alabama.
- ScottsMiracle-Gro invested $175 million in RIV Capital, showing strong financial commitment.
- The combined entity aims to aggressively pursue M&A for geographic expansion and brand portfolio development.
- ScottsMiracle-Gro's subsidiary, The Hawthorne Collective, will hold non-voting exchangeable shares of Cansortium, potentially convertible into common shares.
Negative
- Delays in the implementation of adult-use cannabis in New York have been a setback.
- The upcoming merger is still subject to regulatory and shareholder approval, introducing uncertainty.
- ScottsMiracle-Gro's investment in RIV Capital is in unsecured convertible notes, presenting potential risk.
News Market Reaction – SMG
In the trading session that priced this news, SMG gained 1.89%, reflecting a mild positive market reaction.
Data tracked by StockTitan Argus on the day of publication.
AI-generated analysis. How Rhea-AI works. Not financial advice.
ScottsMiracle-Gro Poised to Advance Cannabis Strategy in New York, Florida and other states
MARYSVILLE, Ohio, May 30, 2024 (GLOBE NEWSWIRE) -- The Scotts Miracle-Gro Company (NYSE: SMG) announced its support for the planned combination of RIV Capital and Cansortium, stating the move will enhance its strategic stake in cannabis cultivation and retail operations in important high-growth states.
“The combination of these two companies is a transformative step in the strategy we initiated in 2021 when we first invested in RIV Capital,” said Jim Hagedorn, chairman, CEO and president of ScottsMiracle-Gro. “Despite delays with adult-use implementation in New York, RIV Capital has become a legitimate player in the state’s medical and recreational cannabis market. Cansortium, meanwhile, is a proven operator with licenses in Florida, Texas, Pennsylvania and Alabama. Together, they will have the financial means and strong operating team to expand in four of the five most populous states, leading to value-creation opportunities for RIV and Cansortium shareholders as well as our ScottsMiracle-Gro investment.”
RIV Capital (CSE: RIV) (OTC: CNPOF) and Cansortium (CSE: TIUM.U) (OTCQB: CNTMF) announced today that they have agreed to combine and move forward as Cansortium. Through its subsidiary, The Hawthorne Collective, ScottsMiracle-Gro previously invested
As the largest investor in RIV, ScottsMiracle-Gro sought to provide RIV with a strong balance sheet to secure a New York state license and gain a foothold in the existing medical market while capitalizing on legalization of adult use.
“We’re pleased with RIV’s accomplishments in New York, as it has built out cultivation operations and opened a flagship White Plains dispensary that is exceeding expectations,” said Chris Hagedorn, president of The Hawthorne Collective and division president at ScottsMiracle-Gro.
“Cansortium’s sophisticated operating model can accelerate expansion in New York, while RIV’s cash position can fund growth in Florida, where adult use is on the November ballot. Longer term, we expect the combined Cansortium business to aggressively pursue M&A aimed at geographic expansion and the creation of a portfolio that includes the best cannabis brands with the highest consumer demand.”
About ScottsMiracle-Gro
With approximately
For investor inquiries:
Aimee DeLuca
Sr. Vice President
Investor Relations
aimee.deluca@scotts.com
(937) 578-5621
For media inquiries:
Tom Matthews
Chief Communications Officer
tom.matthews@scotts.com
(937) 644-7044
