Scotts (SMG) CEO is Blunt: 'We're Targeting Medical Marijuana Market'
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Scotts Miracle-Gro (NYSE: SMG) is looking to take its shares higher by getting people higher.
According to reports Tuesday, Scotts will look into offering products aimed at the medical marijuana community, a burgeoning industry now legal in several states across the U.S.
Though there is surely some controversy surrounding the decision, a survey by the WSJ shows about 79 percent are okay with the move.
Scotts, which draws most of its nearly $3 billion in annual revs from three key retailers -- Home Depot (NYSE: HD), Lowe's Co.'s (NYSE: LOW), and Wal-Mart (NYSE: WMT) -- is looking to sustain growth as these retailers have scaled-back on building new stores. Additionally, consumers remain cautious about spending on non-necessities.
Of the sixteen states given the green light for medical marijuana, Colorado and California are the largest, with annual expected sales of $244 million and $1.3 billion, respectively. Overall revenue in the market are expected to be $1.7 billion, though its not clear whether that is specifically tied to sales of equipment and fertilizer, or the product itself. Either way, medical marijuana appears to be an industry "on fire."
The WSJ notes Scotts would likely buy existing niche dirt companies. Recent raids on growing operations have turned up Scotts products, which CEO Jim Hagedorn says "is a good sign of brand awareness," though he fears most growers would not like using a mainstream product.
Avid growers are generally torn about using Scotts products, the WSJ notes, citing a recent research foray on rollitup.org.
But the company is also looking to diversify through sales in smaller locations, like grocery chains and hardware shops. Scotts plans to bolster these relationships with offerings of "special products" in order to draw interest.
According to reports Tuesday, Scotts will look into offering products aimed at the medical marijuana community, a burgeoning industry now legal in several states across the U.S.
Though there is surely some controversy surrounding the decision, a survey by the WSJ shows about 79 percent are okay with the move.
Scotts, which draws most of its nearly $3 billion in annual revs from three key retailers -- Home Depot (NYSE: HD), Lowe's Co.'s (NYSE: LOW), and Wal-Mart (NYSE: WMT) -- is looking to sustain growth as these retailers have scaled-back on building new stores. Additionally, consumers remain cautious about spending on non-necessities.
Of the sixteen states given the green light for medical marijuana, Colorado and California are the largest, with annual expected sales of $244 million and $1.3 billion, respectively. Overall revenue in the market are expected to be $1.7 billion, though its not clear whether that is specifically tied to sales of equipment and fertilizer, or the product itself. Either way, medical marijuana appears to be an industry "on fire."
The WSJ notes Scotts would likely buy existing niche dirt companies. Recent raids on growing operations have turned up Scotts products, which CEO Jim Hagedorn says "is a good sign of brand awareness," though he fears most growers would not like using a mainstream product.
Avid growers are generally torn about using Scotts products, the WSJ notes, citing a recent research foray on rollitup.org.
But the company is also looking to diversify through sales in smaller locations, like grocery chains and hardware shops. Scotts plans to bolster these relationships with offerings of "special products" in order to draw interest.
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