In the four weeks since the North American Marijuana Index was established, the index has grown by close to 50 percent, according to an article by Yahoo! Finance. The growth is being driven by two factors: legalization in Canada and the large amount of deal making in the industry. However, there has been one cannabis stock that has not seen a lot of success in the market.
Scotts Miracle-Gro isn’t a pure-play cannabis stock and is focused on the traditional, seasonal lawn and garden sector. The company generated 89 percent of its revenue from its traditional offerings and the remaining 11 percent came from their subsidiary Hawthorne Gardening, which is responsible for hydroponics, lighting solutions, soil and nutrients for the medical cannabis industry. Scotts Miracle-Gro was relying on the market in California, which is under performing in the wake of the problems the new regulations have created, to drive their growth in the sector.
To make up for the hit its stock took, Scotts Miracle-Gro has acquired Sunlight Supply, a company with a similar business model and product line as Hawthorne, for $450 million in cash and stock. Additionally, Scotts Miracle-Gro has also teamed up with The Flowr Corporation to build a 50,000-square-foot research facility in Kelowna, British Columbia. The purpose of the partnership is to study Hawthorne’s lighting, nutrient and soil solutions in regards to the genetics and yield of cannabis crops.
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Subsequent to this press release, The Flowr Corporation went public on September 26, 2018 under the ticker symbol TSXV:FLWR.