GrowGeneration Corp . (NASDAQ: GRWG ) is continuing to expand its universe by buying Downriver Hydroponics, a Michigan -based indoor garden supply center in Wayne County. The company did not disclose the value of the deal, however, it did say Downriver Hydro is the area’s largest hydroponics store, with annual revenues approaching $10 million. With the acquisition of Downriver Hydro, GrowGen’s portfolio of hydroponic garden centers now includes 53 stores across 12 states, with seven of those locations in Michigan.
“Michigan’s cannabis market is expected to generate $3 billion in revenue over the next three years, making it an ideal place for further investment and expansion,” said Darren Lampert, GrowGen’s CEO. “We continue to look for best-in-class hydroponics stores in mature and emerging markets, and Downriver Hydro has a strong customer base, as well as an experienced and knowledgeable staff, led by owner Scott Brownlie .”
The Downriver Hydroponics acquisition is GrowGen’s ninth this year and follows yet another quarter of record earnings. Just last month, GrowGen announced record full-year 2020 revenues of $193 million, an increase of 143% year-over-year. Same-store sales increased 63% for full-year 2020, compared to the previous year. The Company also raised its 2021 revenue guidance to $415 – $430 million and raised its 2021 adjusted EBITDA guidance to $48 – $51 million. GrowGen plans to have 60 garden center locations in 15 states by the end of 2021.
Brownlie and his team will stay on at GrowGen as part of the transaction, and operate the company’s seventh location in the state. GrowGen also operates hydroponic garden centers in Battle Creek, Grand Rapids, Livonia, Taylor, South Lansing, and West Lansing.
“Downriver Hydro has proudly served Michigan’s indoor growers for over a decade with our exceptional team of cultivation experts, commitment to hydroponics education, and vast inventory of high-quality garden supplies,” said Brownlie. “We are excited to join GrowGeneration, the nation’s largest hydroponics retailer, to leverage our combined resources, expertise, and inventory to meet the state’s growing number of cultivators.”
According to industry sources, Michigan’s cannabis market is:
- One of the fastest-growing cannabis markets in the country, with a total of 2020 cannabis sales generating $984 million in revenue.
- Projected to generate over $3 billion in cannabis sales within the next three years.
- The second-largest medical marijuana market in the country, behind California.