Scotts Miracle-Gro (SMG) announced on Wednesday that it is selling its cannabis-supply unit, Hawthorne Gardening, to the marijuana company Vireo Growth (VREOF). This move marks a major shift for the lawn-and-garden giant as it pulls back from the unpredictable cannabis market after more than ten years. Following the news and a strong quarterly earnings report, Scotts stock rose to $63.23, an 8% gain since the start of the year.
Claim 50% Off TipRanks Premium
- Unlock hedge fund-level data and powerful investing tools for smarter, sharper decisions
- Stay ahead of the market with the latest news and analysis and maximize your portfolio's potential
Scotts Moves Away from Cannabis Volatility
The management team can now focus entirely on core brands like Miracle-Gro and Ortho because they are moving Hawthorne out of the company’s main operations. This shift helps the business return to its roots in traditional gardening. CEO Jim Hagedorn explained that the plan removes the “volatility” of the cannabis sector from their stock, which should make the company more stable for investors.
Vireo Growth Acquires Leading Cultivation Platform
Vireo Growth is taking over the Hawthorne brand to strengthen its own position in the market. The Hawthorne unit provides the nutrients, lighting, and fans that growers need to produce cannabis. Through this transaction, Scotts will receive a 13% ownership stake in Vireo and an option to buy more equity in the future.
Furthermore, Chris Hagedorn, who led Hawthorne for years, will join the Vireo board to help manage the transition. This new partnership ensures that Hawthorne keeps its roughly 100 employees while gaining a new parent company that is fully dedicated to the marijuana industry.
Scotts Miracle-Gro Is Finally Returning to Profitability
Scotts Miracle-Gro also shared its first-quarter results for Fiscal 2026. Even though they reported a small loss, the numbers were better than last year, and the company is finally returning to profitability.
The board approved a $500 million share buyback program to show confidence in their future. This program will begin in late 2026 and is designed to give more value back to the people who own the stock.
Is Scotts Miracle-Gro Stock a Buy?
Scotts Miracle-Gro stock has a consensus Moderate Buy rating among six Wall Street analysts. This rating is based on five Buys and one Hold recommendation issued in the last three months. The average 12-month SMG price target of $66.11 implies 8.7% upside potential from current levels.
