Vireo Growth (VREOF) acquires Hawthorne, adds about US$110M liquidity
Rhea-AI Filing Summary
Vireo Growth Inc. has completed the acquisition of The Hawthorne Gardening Company from The Scotts Miracle-Gro Company. Vireo issued 213,000,000 subordinate voting shares at a deemed price of US$0.60 and granted Warrants to purchase 80,000,000 shares at US$0.85, exercisable for five years.
Through the transaction, Vireo gained approximately US$35 million of cash, about US$58 million of net working capital, and US$20 million of inventory over two years, which together are described as contributing roughly US$110 million of cash and net working capital. The seller’s designee, Good Dog Holdings LLC, now owns about 14% of Vireo’s shares, potentially rising to about 19% if all Warrants are exercised, and its nominee, ScottsMiracle-Gro executive Chris Hagedorn, has been put forward for election to Vireo’s Board.
Positive
- Balance sheet strengthened: Vireo gains approximately US$35 million of cash, about US$58 million of net working capital, and US$20 million of inventory tied to the Hawthorne business, which the company describes as contributing roughly US$110 million of combined cash and net working capital.
- Strategic platform acquisition: The deal adds Hawthorne’s established North American indoor and hydroponic gardening platform, which management highlights as a procurement and supply-chain optimization engine for Vireo’s broader portfolio.
Negative
- Significant equity dilution: Consideration consists of 213,000,000 new subordinate voting shares plus Warrants for 80,000,000 additional shares, giving Good Dog approximately 14% ownership initially and potentially about 19% if all Warrants are exercised.
- Increased governance influence of new holder: The Investor Rights Agreement allows the seller’s designee to nominate one director while it holds at least 5% of outstanding subordinate voting shares, increasing influence of a single strategic investor.
Insights
Vireo trades equity for liquidity and a major hydroponics platform.
Vireo Growth has acquired Hawthorne Gardening by issuing 213,000,000 shares at US$0.60 plus Warrants for 80,000,000 shares at US$0.85. In return, it gains a North American hydroponics platform, US$35 million cash, about US$58 million net working capital, and US$20 million of inventory over two years.
The structure is entirely equity-based, so cash outlay is avoided but shareholders face meaningful dilution, with Good Dog initially holding about 14% of Vireo and potentially about 19% if all Warrants are exercised. Governance influence also increases through Good Dog’s board nomination rights under the Investor Rights Agreement.
Overall this looks strategically and financially significant: it bolsters liquidity and adds an operating platform, while concentrating ownership in a new strategic holder. Future filings with Hawthorne carve-out and pro forma financials, due within 71 days of the 8-K requirement date, will clarify how much earnings power and margin profile Hawthorne brings to Vireo’s combined business.
8-K Event Classification
Key Figures
Key Terms
securities purchase agreement financial
Warrant Agreement financial
Lock-up Agreement financial
Investor Rights Agreement financial
net working capital financial
early warning report regulatory
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of Incorporation)
| (Commission File Number) | (IRS Employer Identification No.) | |
|
|
||
| (Address of principal executive offices) | (Zip Code) |
(
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| N/A | N/A | N/A |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant
to Section 13(a) of the Exchange Act.
| Item 1.01 | Entry into a Material Definitive Agreement |
On April 8, 2026, Vireo Growth Inc. (the “Company”) entered into a securities purchase agreement (the “SPA”) by and among the Company, Prolific Supply LLC, an indirect wholly owned subsidiary of Vireo (“Buyer”), The Scotts Miracle-Gro Company, an Ohio corporation (“Scotts”), and SMG Growing Media LLC, an Ohio limited liability company and an indirect wholly owned subsidiary of Scotts (“Seller”).
Pursuant to the SPA, Buyer agreed to purchase from Seller all of the issued and outstanding equity interests of The Hawthorne Gardening Company LLC, a Delaware limited liability company, which, as of closing, owns 100% of the equity interests of HGCI LLC, a Nevada limited liability company, and Hawthorne Hydroponics LLC, a Delaware limited liability company (collectively, the “Hawthorne Companies”). The transaction closed concurrently with execution of the SPA on April 8, 2026.
Pursuant to the SPA, the Company issued to Good Dog Holdings LLC, as the Seller’s designee (the “Seller Designee”), 213,000,000 subordinate voting shares (the “Vireo Shares”) at a deemed value of $0.60 per share, subject to customary post-closing price adjustments, with 5,000,000 of such Vireo Shares having been delivered to Odyssey Trust Company in its capacity as escrow agent for satisfaction of such adjustments. Additionally, pursuant to the SPA, the Company executed and delivered to the Seller Designee a warrant agreement (the “Warrant Agreement”) to purchase 80,000,000 subordinate voting shares at an exercise price of $0.85 (the “Warrants”). The Warrants are immediately exercisable and expire five years from the date of issuance.
In connection with the SPA, the Seller Designee entered into a lock-up agreement with the Company (the “Lock-up Agreement”), providing that the Seller Designee, during the lock-up periods, may not, subject to customary exceptions, offer, issue, sell, transfer or otherwise dispose of the Vireo Shares issued as closing consideration without the prior written consent of the Company. The Lock-up Agreement provides that the Vireo Shares acquired pursuant to the SPA as closing consideration are subject to a lock-up release schedule of 10% of Vireo Shares issued six months post-closing; 30% of Vireo Shares issued 12 months post-closing; 30% of Vireo Shares issued 18 months post-closing; and 30% of Vireo Shares issued 24 months post-closing. Any Vireo Shares issued pursuant to the Warrant Agreement would be subject to the same lock-up release periods.
The Vireo Shares issued pursuant to the SPA, the Warrants, and any subordinate voting shares underlying the Warrants to be issued by the Company were or will be issued in reliance upon the exemptions from registration under the Securities Act of 1933, as amended (the “Securities Act”), provided by Section 4(a)(2) of the Securities Act as a transaction not involving a public offering and Rule 506 promulgated under the Securities Act. In connection with entry into the SPA, the Company and the Seller Designee entered into an Investor Rights Agreement (the “Investor Rights Agreement”), providing the Seller Designee with certain resale and piggyback registration rights with respect to the securities issued pursuant to the SPA. Until such time as the Seller Designee (collectively with certain other parties) holds less than 5% of the Company’s issued and outstanding subordinate voting shares, the Investor Rights Agreement provides the Seller Designee with the right to designate one person to be nominated and elected (subject to approval by the Company’s shareholders) to sit on the Company’s Board of Directors, which individual has been initially selected as Chris Hagedorn. The Investor Rights Agreement also provides certain participation rights to the Seller Designee that provide Seller Designee with the ability to purchase additional subordinate voting shares of the Company in the instance that the Company offers subordinate voting shares for cash consideration in certain circumstances. The Seller Designee may purchase up to such number of subordinate voting shares that would allow it (collectively with certain other parties) to maintain its ownership percentage before such an offering such that the Seller Designee (collectively with certain other parties) maintains the same ownership percentage in the Company after such offering.
The foregoing descriptions of the SPA, the Warrant Agreement and the Investor Rights Agreement are only summaries, do not purport to be complete, and are qualified in their entirety by reference to the full texts of the SPA, the Warrant Agreement and the Investor Rights Agreement, which are filed as Exhibits 2.1, 4.1 and 10.1 hereto, respectively, and are incorporated herein by reference.
A copy of the SPA has been filed to provide shareholders with information regarding its terms and conditions and is not intended to provide any factual information about the Company, the Hawthorne Companies or its or their respective businesses. The representations, warranties and covenants contained in the SPA and the other agreements referenced herein have been made solely for the benefit of the parties to such agreements, and are not intended as statements of fact to be relied upon by the Company’s shareholders, but rather, as a way of allocating the risk between the parties thereto in the event the statements therein prove to be inaccurate. Statements made in the SPA have been modified or qualified by certain confidential disclosures that were made between the parties in connection with the negotiation of the SPA, which disclosures are not reflected in the SPA attached hereto. Moreover, such statements may no longer be true as of a given date and may apply standards of materiality in a way that is different from what may be viewed as material by shareholders. Accordingly, shareholders should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of the Company, the Hawthorne Companies or its or their respective businesses. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the SPA and such other agreements, which subsequent information may or may not be fully reflected in the Company’s public disclosures. The Company acknowledges that, notwithstanding the inclusion of the foregoing cautionary statements, it is responsible for considering whether additional specific disclosures of material information regarding material contractual provisions are required to make the statements in this Current Report on Form 8-K not misleading.
| Item 2.02 | Completion of Acquisition or Disposition of Assets |
The information set forth under Item 1.01 of this Current Report on Form 8-K related to the acquisition of the Hawthorne Companies in connection with the SPA is incorporated herein by reference, to the extent required herein.
| Item 3.02 | Unregistered Sales of Equity Securities |
The information set forth under Item 1.01 of this Current Report on Form 8-K related to the securities issued and to be issued in connection with the SPA and the Warrant Agreement is incorporated herein by reference, to the extent required herein. The securities were issued and will be issued in reliance upon the exemptions from registration under the Securities Act provided by Section 4(a)(2) of the Securities Act as a transaction not involving a public offering and Rule 506 promulgated under the Securities Act.
| Item 7.01 | Regulation FD Disclosure |
On April 8, 2026, the Company issued a press release announcing the matters disclosed in this Current Report on Form 8-K, which is attached as Exhibit 99.1 hereto and is incorporated herein solely for purposes of this Item 7.01 disclosure.
Pursuant to the rules and regulations of the Securities and Exchange Commission, the information in this Item 7.01 disclosure, including Exhibit 99.1, and information set forth therein, is deemed to have been furnished and shall not be deemed to be “filed” under the Exchange Act.
| Item 9.01. | Financial Statements and Exhibits |
(a) Financial Statements of Business Acquired
The information required by Item 9.01(a) of this report, including the carve out consolidated financial statements as of September 30, 2025 and for the year then ended for the business conducted by the Hawthorne Companies as of the closing of the SPA, and the unaudited carve-out interim financial statements of the business conducted by the Hawthorne Companies as of the closing of the SPA as of and for the three-month period ended December 27, 2025, will be filed by an amendment to this Current Report on Form 8-K no later than 71 calendar days after the date on which this Current Report on Form 8-K is required to be filed.
(b) Pro Forma Financial Information
The pro forma information required by Item 9.01(a) of Form 8-K will be filed by an amendment to this Current Report on Form 8-K no later than 71 calendar days after the date on which this Current Report on Form 8-K is required to be filed.
(d) Exhibits.
| Exhibit No. | Description | |
| 2.1+** | Securities Purchase Agreement, dated April 8, 2026, by and among Vireo Growth Inc., Prolific Supply LLC, the Scotts Miracle-Gro Company, and SMG Growing Media LLC | |
| 4.1** | Warrant Agreement, dated April 8, 2026, by and between Vireo Growth Inc. and Good Dog Holdings LLC | |
| 10.1 | Investor Rights Agreement, dated April 8, 2026, by and between Vireo Growth Inc. and Good Dog Holdings LLC | |
| 99.1* | Press Release, dated as of April 8, 2026 | |
| 104 | Cover Page Interactive Data File (embedded within Inline XBRL document) |
*Furnished herewith
+Pursuant to Item 601(a)(5) of Regulation S-K, schedules have been omitted and will be furnished on a supplemental basis to the Securities and Exchange Commission upon request.
**Certain confidential information has been excluded from this exhibit because it is both (i) not material and (ii) the type of information that the registrant treats as private or confidential.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| VIREO GROWTH INC. | ||
| (Registrant) | ||
| By: | /s/ Tyson Macdonald | |
| Tyson Macdonald | ||
| Chief Financial Officer | ||
Date: April 14, 2026
Exhibit 99.1
Vireo Growth Inc. Announces Acquisition of The
Hawthorne Gardening Company from
The Scotts Miracle-Gro Company
Transaction further strengthens the Company’s balance sheet with approximately US$110 million of combined cash and net working capital
Consideration of 213 million shares at a deemed price of US$0.60 and 80 million warrants at US$0.85 strike price
Company has nominated Scotts Miracle-Gro EVP Chris Hagedorn for election to its Board of Directors
MINNEAPOLIS – April 8, 2026 – Vireo Growth Inc. (CSE: VREO; OTCQX: VREOF) (“Vireo” or the “Company”) today announced that it has completed the acquisition of The Hawthorne Gardening Company LLC (including certain of its subsidiaries, “Hawthorne”), a leading provider of nutrients, lighting and other materials used for indoor and hydroponic gardening in North America from The Scotts Miracle-Gro Company (“ScottsMiracle-Gro”) (the “Hawthorne Transaction”).
As a result of the Hawthorne Transaction, Vireo acquired US$35 million of cash held by Hawthorne, approximately US$58 million of net working capital, and US$20 million of inventory (primarily growing media) to be supplied to the Company over two years, in exchange for the issuance to Good Dog Holdings LLC (“Good Dog”) of 213 million subordinate voting shares of the Company (each, a “Share”) and a warrant to purchase 80 million Shares (the “Warrants”, and, together with the Shares, the “Securities”) at an exercise price of US$0.85 per Share, exercisable for a period of five years from the date of issuance. In connection with the transaction, Vireo has nominated Chris Hagedorn, Executive Vice President of ScottsMiracle-Gro and Executive Lead of the Hawthorne business, for election to its Board of Directors at the Company’s Annual General and Special Meeting of Shareholders to be held on May 29, 2026.
“The acquisition of Hawthorne further strengthens the Vireo balance sheet and creates a procurement platform to optimize supply chain management and drive cost efficiency across our portfolio,” said John Mazarakis, Chief Executive Officer of Vireo Growth. “We are pleased to partner with ScottsMiracle-Gro on a transaction that contributes approximately US$110 million of cash and net working capital to the Company, and welcome the opportunity to maximize the value and operational contribution of the Hawthorne business.”
“Vireo has demonstrated a clear ability to integrate and operate complex businesses effectively,” said Chris Hagedorn, Executive Vice President of The Scotts Miracle-Gro Company. “Hawthorne fits naturally within Vireo’s platform, and I’m excited to work alongside the team to help unlock its full potential.”
The Securities described above have not been and will not be registered under the United States Securities Act of 1933, as amended (the “Securities Act”), or any U.S. state securities laws. Accordingly, the Securities may not be offered or sold in the United States except pursuant to an effective registration statement or an applicable exemption from the registration requirements of the Securities Act and applicable U.S. state securities laws.
Early Warning Disclosure
Immediately prior to the Hawthorne Transaction, Good Dog did not beneficially own, directly or indirectly, or exercise control or direction over, any Shares or securities convertible into or exercisable for Shares.
After giving effect to the Hawthorne Transaction, Good Dog acquired 213,000,000 Shares, representing approximately 14% of Vireo and having a market value of US$83.7 million and C$117.2 million based on the closing price of the Shares on the Canadian Securities Exchange (the “CSE”) of US$0.393 on April 7, 2026, and 80,000,000 Warrants. In the event Good Dog were to exercise all of its Warrants, such exercise would result in Good Dog owning up to an additional 80,000,000 Shares, and Good Dog’s aggregate interest in Vireo on would be approximately 19%, with a market value of US$115.1 million and C$161.2 million based on the closing price of the Shares on the CSE of US$0.393 on April 7, 2026.
Good Dog acquired the Shares for investment purposes. Good Dog has a long-term view of the investment and may acquire additional securities of Vireo, including on the open market or through private acquisitions, or sell securities of Vireo, including on the open market or through private dispositions, in the future, subject to resale restrictions, market conditions, reformulation of plans and/or other relevant factors.
Further to the requirements of National Instrument 62-103 – The Early Warning System and Related Take-Over Bid and Insider Reporting Issues, Good Dog will file an early warning report in connection with its participation in the Hawthorne Transaction. A copy of Good Dog’s early warning report will appear on Vireo’s profile on SEDAR+ and may also be obtained directly upon request by calling Good Dog’s office at (917) 370-827 (2 East 70th Street, New York, NY, USA, 10021).
About Vireo Growth Inc.
Vireo was founded in 2014 as a pioneering medical cannabis company. Vireo is building a disciplined, strategically aligned, and execution-focused platform in the industry. This strategy drives our intense local market focus while leveraging the strength of a national portfolio. We are committed to hiring industry leaders and deploying capital and talent where we believe it will drive the most value. Vireo operates with a long-term mindset, a bias for action, and an unapologetic commitment to its customers, employees, shareholders, industry collaborators, and the communities it serves. For more information about Vireo, visit www.vireogrowth.com.
Contact Information
Joe Duxbury
Chief Accounting Officer
investor@vireogrowth.com
(612) 314-8995
Forward-Looking Statement Disclosure
This press release contains “forward-looking information” or “forward-looking statements” within the meaning of applicable United States and Canadian securities legislation (referred to herein as “forward-looking information”). To the extent any forward-looking information in this press release constitutes “financial outlooks” within the meaning of applicable United States or Canadian securities laws, this information is being provided as preliminary financial results; the reader is cautioned that this information may not be appropriate for any other purpose and the reader should not place undue reliance on such financial outlooks. Forward-looking information contained in this press release may be identified by the use of words such as “should,” “believe,” “estimate,” “would,” “looking forward,” “may,” “continue,” “expect,” “expected,” “will,” “likely,” “subject to,” and variations of such words and phrases, or any statements or clauses containing verbs in any future tense and includes statements regarding expectations around the expected benefits of the Hawthorne Transaction; expectations around the election of Chris Hagedorn to the Company’s Board of Directors; expectations around the value of the inventory to be provided to the Company over the next two years; and the Company’s expectations around integration of the operations of its recent acquisitions and timing thereof. These statements should not be read as guarantees of future performance or results. Forward-looking information includes both known and unknown risks, uncertainties, and other factors which may cause the actual results, performance, or achievements of the Company or its subsidiaries to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements or information contained in this press release. Financial outlooks, as with forward-looking information generally, are, without limitation, based on the assumptions and subject to various risks as set out herein and in our Annual Report on Form 10-K and our Quarterly Reports on Form 10-Q filed with the U.S. Securities Exchange Commission. Our actual financial position and results of operations may differ materially from management’s current expectations and, as a result, our revenue, EBITDA, Adjusted EBITDA, and cash on hand may differ materially from the values provided in this press release. Forward-looking information is based upon a number of estimates and assumptions of management, believed but not certain to be reasonable, in light of management’s experience and perception of trends, current conditions, and expected developments, as well as other factors relevant in the circumstances, including assumptions in respect of current and future market conditions, the current and future regulatory environment, and the availability of licenses, approvals and permits.
Although the Company believes that the expectations and assumptions on which such forward-looking information is based are reasonable, the reader should not place undue reliance on the forward-looking information because the Company can give no assurance that they will prove to be correct. Actual results and developments may differ materially from those contemplated by these statements. Forward-looking information is subject to a variety of risks and uncertainties that could cause actual events or results to differ materially from those projected in the forward-looking information. Such risks and uncertainties include, but are not limited to: risks and uncertainties associated with the Hawthorne Transaction, some of which are beyond the Company’s control; the Company’s ability to maintain relationships with suppliers, customers, employees and other third parties as a result of the Hawthorne Transaction; the effects of the Hawthorne Transaction on the Company and the interests of various constituents; the nature, cost, impact and outcome of pending and future litigation, other legal or regulatory proceedings, or governmental investigations and actions; risks related to the timing and content of adult-use legislation in markets where the Company currently operates; current and future market conditions, including the market price of the subordinate voting shares of the Company; risks related to epidemics and pandemics; federal, state, local, and foreign government laws, rules, and regulations, including federal and state laws and regulations in the United States relating to cannabis operations in the United States and any changes to such laws or regulations; operational, regulatory and other risks; execution of business strategy; management of growth; difficulties inherent in forecasting future events; conflicts of interest; risks inherent in an agricultural business; risks inherent in a manufacturing business; liquidity and the ability of the Company to raise additional financing to continue as a going concern; the Company’s ability to meet the demand for flower in its various markets; our ability to dispose of our assets held for sale at an acceptable price or at all; and risk factors set out in the Company’s Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, which are available on EDGAR with the U.S. Securities and Exchange Commission at www.sec.gov and filed with the Canadian securities regulators and available under the Company’s profile on SEDAR+ at www.sedarplus.com.
The statements in this press release are made as of the date of this release. Except as required by law, we undertake no obligation to update any forward-looking statements or forward-looking information to reflect events or circumstances after the date of such statements.