If I'm a decision-maker at Earnest Partners, BlackRock, Vanguard, Fisher Asset Management, and Citadel, I'm thinking this...this, uh....wait I lost it...wait, no I got it-- is genius.
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."
He's got numbers to back this up.
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.
In related news, Jimmy Cayne is steaming he didn't come up with a similarly convincing excuse for why Bear Stearns should start dealing, thereby making his 'Hot-Box The Executive Washroom Wednesday' acceptable to the squares at 383 Madison Avenue.