ScottsMiracle-Gro CEO Expresses Support for President’s Cannabis Rescheduling Executive Order

Core Viewpoint - The Scotts Miracle-Gro Company supports President Trump's executive order to reschedule cannabis from a Schedule I to Schedule III drug, which is seen as a significant step for the cannabis industry and its growth strategy [1][2]. Group 1: Impact of Rescheduling on the Cannabis Industry - Rescheduling cannabis is viewed as overdue, with 39 states having already legalized it in some form, reflecting public sentiment and enabling necessary medical research [2]. - The change is expected to weaken the illicit cannabis market by enhancing the financial viability of the legal industry, which employs over 425,000 people and contributes $100 billion to the economy [2]. - Rescheduling will not legalize cannabis federally but will alleviate financial constraints on cannabis companies, facilitating medical research on its use for conditions like PTSD and cancer [2][3]. Group 2: Financial Implications for Cannabis Companies - The current 280E tax penalty has severely impacted the profitability of legal cannabis companies, often leading to their closure; rescheduling will eliminate this penalty, aligning their tax rates with other American businesses [3]. - This change is anticipated to allow cannabis companies to invest more in capital and growth opportunities, which could positively affect ScottsMiracle-Gro's subsidiary, Hawthorne Gardening Company [3]. Group 3: Strategic Moves by Scotts Miracle-Gro - The company plans to strategically transition Hawthorne into a cannabis-focused entity, aiming to combine it with a cannabis company in early fiscal 2026, enhancing growth opportunities [4]. - The reclassification of cannabis is expected to make Hawthorne a more appealing partner for cannabis-dedicated companies [4]. Group 4: Classification of Cannabis - Cannabis, currently classified as a Schedule I drug alongside heroin, will move to Schedule III, aligning it with drugs that have accepted medical uses and lower potential for physical dependence [5]. Group 5: Company Overview - Scotts Miracle-Gro is the leading marketer of branded consumer lawn and garden products in North America, with approximately $3.4 billion in sales and well-known brands like Scotts®, Miracle-Gro®, Ortho®, and Tomcat® [6].