A lord of lawn-and-garden isn’t backing down from his plans for building a billion-dollar business in the legal weed market.
In fact, he’s going full throttle on those efforts.
Jim Hagedorn, the CEO of Scotts Miracle-Gro Co., has flown in the face of his company’s board by wanting to target cannabis growers as customers.
Hagedorn recently spoke in-depth with Forbes about his vision for capitalizing on cannabis.
“It is the biggest thing I’ve ever seen in lawn and garden,” Hagedorn told Forbes reporter Dan Alexander.
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While piloting his private jet named the “F-bomb,” the executive and former F16 fighter pilot who calls himself an “acquired taste” talked of his plans to invest $500 million in the marijuana industry, according to Forbes:
Hagedorn is backing up his big talk with serious cash. He shelled out $135 million last year on two California-based businesses that sell fertilizers, soils and accessories to pot growers, recently spent another $120 million on a still-undisclosed lighting and hydroponics equipment company in Amsterdam and promises to invest about another $150 million by the end of 2016. Altogether, the deals are bigger than the largest single acquisition in the history of Scotts Miracle-Gro, which takes in $160 million of profit on $3 billion in sales annually.
“For a lot of conventional companies, I don’t think they’d want to take the risk,” says Hagedorn, a short, bald 60-year-old with sharp blue eyes. “I mean I’ve talked to some other friends and CEOs who basically shake their head.”
The marijuana industry’s waters remain plenty murky for some: Cannabis continues to be classified as a Schedule I drug, deeming it illegal on the federal level.
But the rewards of getting in on the ground floor of an industry that is gaining acceptance among a growing number of states, ultimately could outstrip the risks. Amid reports in 2015 that Scotts had acquired a hydroponics company, Leslie Bocskor, legalization advocate and managing partner of Electrum Partners, told Bloomberg:
“Scotts can find themselves having the biggest growth they’ve experienced in decades coming from the nascent home-grow industry,” Bocskor said. “It’s a very smart play.”
And that play could very well go beyond hydroponics and into areas such as fertilizers, pesticides and even genetically-modified cannabis strains, according to Forbes:
Hagedorn has not given up on growing his own marijuana, either. He is already looking into foreign markets like Israel, Canada and Jamaica, where Scotts might be able to legally set up labs to test its products and conduct cannabis research. Hagedorn’s most eye-opening idea: someday expanding the company’s research on genetics into cannabis to create GMO marijuana. Showing an ounce of restraint, he says he is not ready to run that idea by the company’s directors — yet.