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Scotts Miracle-Gro Looks at Medical Marijuana Market

  1. Balzafire
    Rumors have circled for years regarding corporate plans to monetize it after they legalize it (the eternal it being weed), but surely actual corporate interest in farming marijuana shows promise that the controversial plant is becoming more widely accepted, at least for medicinal use?

    One of the first big names to step up to the plate might surprise you. The CEO of Scotts, the company behind products like Miracle-Gro, talked to the Wall Street Journal about plans to zero in on the medical marijuana market:

    “I want to target the pot market,” [Scotts Chief Executive Jim] Hagedorn said in an interview. “There’s no good reason we haven’t.”

    Hagedorn is described in the article as straightforward and unafraid of risk- the type of guy who would have less of a problem rebranding “weed killer” as “killer weed” than other suits might:

    The idea to merge with Scotts dawned on him after he looked at the company’s market value in 1995, he said, so he called his father’s tax lawyer to vet the idea. “I said, ‘Bob, I got this f— crazy idea. Do you think it’d be f— possible to take over Scotts?’” he recalls, sitting in the Port Washington office that his father once occupied.

    If the idea moves forward, it would be interesting to see which big names are next to jump aboard the doob gravy train. Medical marijuana remains illegal under federal drug laws, but agencies have harshed less mellow on a state level since Obama took office.

    Kim LaCapria
    June 15, 2011


  1. Potter
    Scotts Miracle-Gro Co. has long sold weed killer. Now, it's hoping to help people grow killer weed.

    In an unlikely move for the head of a major company, Scotts Chief Executive Jim Hagedorn said he is exploring targeting medical marijuana as well as other niches to help boost sales at his lawn and garden company.

    "I want to target the pot market," Mr. Hagedorn said in an interview. "There's no good reason we haven't."

    Sales at Scotts rose 5% last year to $2.9 billion. But the Marysville, Ohio, company relies on sales at three key retailers—Home Depot Inc., Lowe's Cos. and Wal-Mart Stores Inc.—for nearly two-thirds of its revenue. With consumers still cautious about spending, the retailers aren't building new stores as quickly as they used to, making growth for suppliers like Scotts harder to come by. Against that backdrop, Mr. Hagedorn has pushed his regional sales presidents to look for smaller pockets of growth, such as the marijuana market, that together could produce a noticeable bump in sales.

    Sixteen states have legalized medical marijuana, the largest being California and Colorado. The market will reach $1.7 billion in sales this year, according to a report by See Change Strategy LLC, an information data services company.

    While the report focuses on revenue from growers and dispensaries, Kris Lotlikar, president of See Change, said the market for companies selling hydroponic equipment and professional services is also thriving.

    "We see very good growth for these types of companies as the medical-marijuana business grows," he said.

    Top US markets for medical marijuana, forecast 2011 sales

    * California: $1.3 billion
    * Colorado: $244 million
    * Michigan: $53 million
    * Montana: $44 million
    * Washington: $29 million

    Source: See Change Strategy LLC

    Marijuana use remains illegal under federal law, but federal raids on medical dispensaries have eased since President Obama took office. And while major public companies haven't openly targeted the market, in recent months medical-marijuana companies have sought money from venture capitalists and signaled future IPOs.

    Centennial Seed Co., a Boulder, Colo., medical-cannabis seed seller, is seeking $500,000 through a private offering. General Cannabis Inc., whose stock trades on the Pink Sheets, supports the medical-marijuana market with financial and Internet services.

    The 55-year-old Mr. Hagedorn isn't a typical suit-wearing CEO. A former F-16 fighter pilot, he flies his Cessna to and from meetings in Port Washington, N.Y., where he grew up, and the company's headquarters in Ohio, much to the chagrin of his board. He also peppers his language with swear words and military references, and he showed up at the office on a recent June day in jeans and sneakers.

    Mr. Hagedorn took over Miracle-Gro from his father, who co-founded the company. The idea to merge with Scotts dawned on him after he looked at the company's market value in 1995, he said, so he called his father's tax lawyer to vet the idea. "I said, 'Bob, I got this f— crazy idea. Do you think it'd be f— possible to take over Scotts?'" he recalls, sitting in the Port Washington office that his father once occupied.
    More on Miracle-Gro

    Scotts Miracle-Gro CEO Jim Hagedorn discusses how the company is trying to balance eco-friendly and natural products against its traditional lawn care line. Wendy Bounds reports.

    Wendy Bounds visits the Scotts Miracle-Gro labs for a look at the newest methods in pest-control.

    Mr. Hagedorn is serious about sales growth, no matter how small. On a recent trip to a Farmingdale, N.Y., Home Depot, he saw a customer having a difficult time choosing soil. "C'mon, go help him out," he told Mike Carbonara, Scotts' president for the Northeast. A few minutes later, the customer was walking away with a bag of Miracle-Gro. Over the next half hour, Mr. Carbonara influenced three more sales.

    Targeting marijuana isn't the only way Mr. Hagedorn is pursuing growth outside the national chains. Scotts is also looking to sell more through grocery stores.

    And the company is recultivating its ties to independent lawn-and-garden-store owners, including offering them exclusive products. Mr. Hagedorn strained those ties with a 2009 speech in which he criticized the owners for not doing enough to promote Scotts products, prompting many owners to walk out.

    "I don't give speeches to independents anymore," he said.

    To target marijuana growers, Scotts would likely buy niche dirt companies that already exist rather than create its own line of branded products.

    Raids on pot-growing operations have turned up Scotts products. Mr. Hagedorn takes that as a good sign of brand awareness, but he fears that some growers would be reluctant to use a mainstream product.

    Rollitup.org, a website geared toward the marijuana-growing community, has several forums that debate Miracle-Gro's effectiveness. A user with the moniker Weedqueen12 wrote: "i think [Miracle-Gro] works well." Another user, dannyboy602, countered that Miracle-Gro causes pot plants to "burn and stress."

    In the past, Scotts wouldn't have considered pursuing businesses or product lines that generated less than $10 million a year in revenue. But, Mr. Hagedorn said, "We can't operate our business like that anymore."

    Source: Wall Street Journal
    Dana Mattioli
  2. double-d
    Marketing these products may be a little tricky for the private growers to buy as i have known a few in the past and they do have a hytened sence of paranoia.They would rather mix there own growing media than by it in a public store with cameras watching. This is of course just my opinion, but if it is marketed for uses other than "growing just pot" will keep that from happening JMO of course.
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