US-headquartered lawn and garden product manufacturer Scotts Miracle-Gro launched a corporate venture capital arm yesterday called The Hawthorne Collective to invest in companies in the cannabis industry.
The fund is an offshoot of The Hawthorne Gardening Company, a subsidiary formed by Scotts Miracle-Gro in 2014 to serve the cannabis industry with hydroponic and indoor gardening products. The United States first began legalising cannabis on a state level in 2012.
Hawthorne Collective’s first move has been to issue a $150m six-year convertible note to Canada-listed investment and acquisition firm RIV Capital that would give it a 42% stake upon conversion.
The deal will make RIV the focal point of investments not currently in Hawthorne Gardening Company’s immediate domain, though it will not have any direct involvement in RIV’s operations.
Jim Hagedorn, chairman and CEO of Scotts Miracle-Gro, said: “The addition of The Hawthorne Collective into our portfolio allows us to explore and pursue new opportunities in an industry that is poised for significant growth in the years ahead.
“With full appreciation of current banking and legal requirements, The Collective is designed to allow us to eventually participate directly in a larger marketplace as the legal environment changes over time.”
