GrowGen Archives - Green Market Report

Adam JacksonAugust 4, 2022
GrowGen-Store.png?fit=783%2C434&ssl=1

6min2050

GrowGeneration Corp. (NASDAQ: GRWG) slumped in late trading on Thursday after second-quarter results missed expectations — showing that consumer demand for hydroponics in the nation remained muted as a lack of regulatory guidance and recessionary pressures in the sector persist. The company released its financial results for the second quarter ending June 30, 2022.

For the key metric of same-store sales, GrowGeneration reported a 56.9% decline in same-store sales — lower than analysts’ expectations. The company also saw a $3.7 million decline for the combined e-commerce platform versus $20 million at the same time last year. The decline stems from the closure of the company’s commercial-focused Agron.io platform.

The company missed total revenue expectations as it delivered approximately $71.1 million during the period — missing the Stifel analyst estimate for revenues of $85 million.

GrowGeneration reported revenues of $54.8 million for the second quarter of 2022 and is lowering its guidance for 2022 revenue. GrowGeneration‘s new forecasted range for revenue is $250 million$275 million, far below a range of $340 and $400 in the previous quarter. Adjusted EBITDA guidance is estimated to be a loss of $12 million$15 million, down from previous quarter expectations of $0 to $10 million profit.

The company also reported a second-quarter 2022 GAAP net loss of $136.7 million compared to a net income of $9.6 million in the same period last year. Diluted loss per share in the fourth quarter was $2.24 versus diluted earnings per share of $0.11 in the same period last year. Non-GAAP income before interest, taxes, depreciation, amortization and share-based compensation (Adjusted EBITDA) was a loss of $2.9 million in the second quarter of 2022, compared to earnings of $14.5 million in the same period last year.

Revenue from non-retail operations and distributed products was $12.0 million in the second quarter versus $5.0 million in the same quarter last year.

The decrease in net income was mainly due to a $127.8 million non-cash impairment expense for goodwill and intangible assets “acquired in historical business combinations.” The company said that impairment and income tax expense represents a preliminary amount and remain subject to change following the completion of normal quarter-end accounting procedures.

“The GrowGen team faced significant industry headwinds in the second quarter resulting in disappointing results for the quarter,” said CEO Darren Lampert. “We expect the revenue and gross profit headwinds in the first half will continue in the second half, with the remainder of 2022 revenue decline compared to the first half as we are facing more pressure than we initially planned. While the industry is experiencing a prolonged period of softer demand, we remain confident in the longer-term opportunity that exists within hydroponics and indoor controlled environment agriculture. GrowGen remains on a solid financial footing with a strong balance sheet and operational capabilities.

We firmly believe we are well positioned to emerge stronger when the market eventually turns. In the meantime, we are taking an active approach to manage the business in a way that preserves cash through working capital optimization and we are more aggressively right-sizing our cost structure.”

Earlier this week, Stifel analysts Andrew Carter and Christopher Growe published an earnings preview report that estimated GrowGen’s second-quarter revenue would be $85 million, which is a drop of -32% over last year and just above consensus.

In his report, Carter thought that the company’s cost savings plan could help it in the back half of 2022. He also noted that his estimates didn’t include benefits from reduced inventory levels, and he thinks rightsizing the inventory will be a tailwind for cash flow aiding the company’s efforts to achieve break-even cash flow while investing behind the organization.

The company generated $3.8 million of positive cash flow from operations “as we managed inventory levels during the second quarter,” Lampert said. He also said the company “on track” to reduce its annualized cost base by $13 million versus last year’s levels.


Debra BorchardtAugust 1, 2022
shutterstock_1720647154.jpg?fit=960%2C641&ssl=1

9min3040

Cannabis companies are just starting to roll out the earnings season and with some big names on deck this week, Stifel analysts Andrew Carter and Christopher Growe published an earnings preview report. Once darlings of the cannabis industry, hydroponics are fading fast as the market for Scotts Miracle-Gro (NYSE: SMG) and GrowGeneration (NASDAQ: GRWG) have slowed to a crawl. He wrote, “The 2021/2022 hydroponics recession has been deeper and longer than we originally anticipated with a significantly greater impact to our covered companies than we originally anticipated. But, we contend the hydroponics category will at minimum regress to underlying demand for cannabis (HSD) with an improvement in durables demand eventually taking hold.” The coverage for Canopy Growth (NASDAQ: CGC) basically said that the company’s cash burn is destroying the company’s value. 

Scotts Miracle Grow

The analyst is being super cautious on his numbers and estimates that the third fiscal quarter earnings will be $1.55 for Scotts. This is a 60% drop from last year and according to Carter,  well below consensus ($1.74). “We believe consensus estimates do not fully appreciate the magnitude of the challenges impacting F3Q22 outlined with the June update: adverse April weather impacting U.S. Consumer purchases of higher margin lawn care products, retailer inventory reductions, Hawthorne underlying revenue decline accelerating, fixed cost deleverage, and inflation not fully offset by pricing.,” he wrote. “We estimate total revenue will decline 26% with the gross margin down 830 bps. We estimate U.S. Consumer F3Q22 revenue will decline 15% with volume down 25%. We estimate Hawthorne revenue will decline 59% with the underlying revenue decline accelerating to -63% (-48% F2Q22).”  He said he is keeping his full-year estimate of $4.76, which is roughly in between the company’s guidance range of $4.50 – $5.00.

Carter went on to point out that investors will have a hard time finding anything to motivate them to buy shares for a while. The company could finish the year at 6X debt/EBITDA, not too appealing for investors. He suggested spinning out the Hawthorn division, but then also said the chance to do so has probably passed.

“We have written positively about a potential separation of the two segments (core Consumer, Hawthorne), potentially as a source of unlocking value, but also necessary with capital allocation increasingly inefficient,” said the report. “But we believe this is no longer a viable option with the current structure’s inefficiencies for capital allocation and investor interest an ongoing headwind. We view the RIV Capital investment as a poor use of capital with the strategy articulated by the company undifferentiated and misguided (in our view) with the pursuit highlighting the corporate ownership structure’s risks.” He is maintaining a share target price of $93 and the stock was lately selling at approximately $86 a share.

GrowGeneration

Carter’s estimate for GrowGen’s second-quarter revenue is $85 million, which is a drop of -32% over last year and just above consensus. “Our outlook includes a 41% decline in organic revenue growth: 50% same-store sales decline, a 20% decline for the combined e-commerce platform, +20% underlying growth from distributed products, incremental contributions from new stores and expanded locations,” the report said. Having said that, the analyst was more favorable to GrowGen than to Scotts. He thinks that the company’s cost savings plan will help it in the back half of 2022. He also noted that his estimates didn’t include benefits from reduced inventory levels, and he thinks rightsizing the inventory will be a tailwind for cash flow aiding the company’s efforts to achieve break-even cash flow while investing behind the organization.

Carter even went on to write that he thinks his 2023 outlook will prove to be conservative, however, he walked that back a little saying, “but proof points for a recovery have yet to take hold even as we start to anniversary softer category trends from one year ago.” He is maintaining his Hold rating and believes it will take time for enthusiasm to return to the sector of hydroponics. He did point out that GrowGen has $60 million in cash and is making the right investments, it’s just that investors won’t see that return for some time. His target price is $5.50 and the stock was lately trading at $4.74. 

Canopy Growth

The rare Wall Street sell rating is given to Canopy Growth by Carter, who has also lowered his price target to C$2.90. The stock recently closed at C$3.29. The report said, “We approach our estimate for a C$80 million adjusted EBITDA loss cautiously; our estimates suggest modest underlying improvement y/y driven by cost savings/synergy realization against sales declines include higher margin C3 sales against the C$64 million 1Q22 loss (included C$20 million COVID subsidies). We estimate a total cash burn of C$130 million.” He believes revenue will fall 4.5% in the fiscal year 2023 and was very focused on the company’s cash burn. He estimated the company will burn through $630 million by the fiscal year 2024. 

He went on to write, “We believe the magnitude of the ongoing losses and risks associated with liabilities remain underappreciated with all non-Constellation shareholders bearing outsized risk. The recent early conversion of C$263 million of convertible debt provided additional flexibility reducing liabilities, but at a significant cost to equity holders with the shares down 35% following the announcement (S&P 500 +1%) through final pricing.” He thinks the company may retire even more convertible debt that could further dilute shares by as much as 21%. He finished with a quick analysis of the parts writing, which suggested no value for the global cannabis businesses given the significant losses; C$17 million for the Canadian retail network; C$450 million of value to Canopy for Biosteel, Storz and Bickel, and This Works; and C$982 million for investments in U.S. with the options valued at 50% of capitalized value not including Jetty.”  However, he did note that there could be a quicker improvement in the company’s fundamental performance, platform innovation could quickly gain traction and maybe there could be creative actions by Constellation Brands that could drive value. 

 


Debra BorchardtMarch 1, 2022
GrowGen-Store.png?fit=783%2C434&ssl=1

5min1280

GrowGeneration Corp. (NASDAQ: GRWG) reported record fourth-quarter and full-year 2021 financial results. Revenues for GrowGen were $90.6 million in the fourth quarter of 2021 compared to $61.9 million in the same period last year. Same-store sales at 26 locations open for the same period in 2020 and 2021 were $40.3 million in the fourth quarter of 2021, compared to $46.0 million in the same period last year, representing a 12.3% year-over-year decline.

The company also reported a fourth-quarter 2021 GAAP net loss of $4.1 million compared to net income of $1.5 million in the same period last year. Diluted loss per share in the fourth quarter was ($0.07) compared to diluted earnings per share of $0.03 in the same period last year. Non-GAAP income before interest, taxes, depreciation, amortization and share-based compensation (Adjusted EBITDA) was a loss of $1.9 million in the fourth quarter of 2021 or ($0.03) per diluted share, compared to earnings of $5.5 million in the same period last year, $0.11 per diluted share.

For the full year, revenues were $422.5 million for the full year 2021 compared to $193.4 million for the full year 2020, an increase of 118%, including the contribution from acquisitions. GAAP net income for the twelve months ended December 31, 2021, was $12.8 million, compared to net income of $5.3 million for the twelve months ended December 31, 2020.

Darren Lampert, GrowGen’s Co-Founder and CEO stated, “The GrowGen team delivered a strong year despite the persistently difficult macro-environment that is impacting the entire cannabis industry. Same-store sales at 26 locations decreased (12.3)% in the fourth quarter of 2021 versus the prior year. Full-year 2021 same-store sales were 24.4% over last year. At present, we have 63 retail locations in operation. We increased our inventory positions across all key product categories to get ahead of price increases, as well as expanded more private label purchases. Our private label and proprietary products reached approximately 7.5% of our overall sales in the fourth quarter. Our online marketplace, including Agron, reached $36.2 million of revenue for 2021. In addition to acquired locations, we opened two greenfield locations in the Los Angeles metro area in 2021, and for next year, we are looking to open 15 to 20 locations across new and existing states.”

Outlook

For the full year, GrowGen is forecasting net revenues in the range of $415 million to $445 million, versus the 2021 base of $422.5 million. The adjusted EBITDA will be in the range of $30 million to $35 million versus the 2021 base of $34.5 million. The company said that sales and EBITDA guidance metrics are inclusive of acquisitions and store openings completed in 2021 and 2022, including MMI and HRG, but do not include unannounced acquisitions.

Mr. Lampert continued, “In order to position the company for 2022 and beyond, we have made several strategic decisions to drive margin improvements and EBITDA. As of December 31, 2021, our balance sheet remains strong with $81 million of available liquidity. Given our view of the business today and the continued challenges across the US market, we expect to generate full-year revenue of $415 to $445 million in 2022.”


Debra BorchardtJanuary 13, 2022
growGeneration-logo.jpg?fit=960%2C609&ssl=1

4min1930

Hydroponic chain GrowGeneration Corp. (NASDAQ: GRWG) announced revised full-year 2021 revenue expectations of $420 million to $422 million, versus $193 million for 2020, an increase of 118%.  The important news though was that same stores sales are expected to decline in the fourth quarter by 12.3%. This follows other hydroponic companies like Hydrofarm and Scotts Miracle-Gro that also warned of slowing sales.

Having said that, the fourth quarter revenue expectation is between $88 million to $90 million and same-store-sales for 2021 is expected to grow 24.4% for the full year.

“We delivered strong shareholder value in 2021 with triple digit revenue growth despite unprecedented persistent challenges and an uncertain operating environment. Although we continue to grow our business significantly, we experienced stronger-than-expected pressures in Q4 from the general slowdown in the hydroponics market. The sales results for Q4 combined with one-time expenses will result in a loss for the quarter of between $2 million and $4 million in EBITDA on an adjusted basis. We did improve our inventory position throughout the quarter to align inventory levels with sales activities,” said GrowGen CEO Darren Lampert.

2021 Financial Highlights:

  • Full year 2021 projected revenue between $420 million to $422 million, versus $193 million for full-year 2020
  • Full year 2021 projected EBITDA adjusted for stock-based compensation between $31.5 million to $33.5 million, versus $19.2 million for full-year 2020
  • Same-store-sales increase of 24.4% for full-year 2021 compared to 2020
  • Same-store sales decrease of 12.3% for fourth quarter 2021 compared to the same year-ago period
  • A total of 24 new and acquired store locations in 2021, now with 62 locations nationwide
  • On January 1, 2022, we acquired Mobile Media, Inc, a leading indoor vertical mobile racking and benching system manufacturer

Lampert added, “As we remain focused on our long-term strategy, we continue to use the Company’s strong balance sheet and cash flow generation to drive growth by focusing energies and investments on new greenfield stores, business technology, distribution capabilities, private and proprietary brands, and integration of the Company’s e-commerce distribution channels. These initiatives, supported by a team-oriented approach, give us confidence in our ability to deliver revenue and EBITDA growth in 2022. We believe the management team in place now is better suited than any other team in the industry to drive profitable growth over the next decade.”

 


StaffJanuary 4, 2022
facility.jpg?fit=960%2C420&ssl=1

4min1400

GrowGeneration Corp. (NASDAQ: GRWG) has bought Mobile Media, Inc and MMI Agriculture, an Ellenville, NY-based mobile shelving manufacturing and warehouse facility in a deal valued at $9.4 million. GrowGen said that MMI generated over $14.0 million in revenue in 2021.

MMI occupies two warehouses totaling over 70,000 sq. ft. and will continue to produce products in its manufacturing facility in New York. MMI has been a manufacturer of high-density mobile shelving systems, commonly referred to as “benching,” to a variety of industries including agriculture, retail, commercial, and government, offering a complete turnkey solution, specializing in design, custom manufacturing, shelving systems, and installation across the United States. High-density mobile systems have become a vital part of agriculture grow facilities by increasing overall canopy space both vertically and across the floor by maintaining one moveable aisle in each grow system. MMI has gained significant traction in the agriculture industry by innovating a tiered decking system incorporated within the mobile system, allowing growers to reach numerous vertical tiers while maintaining total system functionality.

“Indoor vertical farming solutions has become a strategic priority for GrowGen, and a key component of our long-term revenue generation plan. Lighting and benching are the first two key components of a grow facility. Combining the adoption of our Ion LED light and cost savings achieved through indoor vertical cultivation using MMI’s vertical benching systems is an important part of GrowGen’s value proposition. Together, GrowGen and MMI increase opportunities for growers by offering not just GrowGen’s robust selection of hydroponic solutions and products, but also a mobile system to utilize these products,” said Michael Salaman, GrowGen’s President, and Co-Founder. “This key strategic acquisition is especially important, as we expand in newly legalizing East Coast states like New YorkNew JerseyPennsylvania, and the New England states MaineMassachusettsConnecticut, and Vermont, where indoor vertical growing will be the method of growing. MMI offers a great system and solution that is accompanied by an industry best warranty. Every bit of canopy grow space is critical to any grow facility. Being able to design and deliver a space-saving mobile system, then execute the design by adding in irrigation, drainage, air flow, lighting, and automation solutions, gives us a stronger presence in today’s market.”

GrowGeneration carries and sells thousands of products, including organic nutrients and soils, advanced lighting technology and hydroponic equipment to be used indoors and outdoors by commercial and home growers. The acquisition comes on the same days as competitor Scotts Miracle-Gro also announced it was buying a lighting company.

“I started MMI, 35 years ago, with the goal of providing the highest-quality vertical racking systems and I’m fortunate to find a partner like GrowGen, one of the most trusted names in hydroponic and organic gardening,” said Lance Pennington, founder of MMI. “GrowGen’s leadership position in selling products into the indoor vertical farming industry combined with MMI’s indoor vertical racking systems now offers our customers a one stop solution for all their indoor cultivation products makes this the perfect partnership.”


StaffNovember 11, 2021
growGeneration-logo.jpg?fit=960%2C609&ssl=1

3min950

GrowGeneration Corp. (NASDAQ: GRWG) reported third-quarter 2021 revenues of $116.0 million, versus $55.0 million in the same period last year. This beat the Yahoo Finance average analyst estimate for revenue of $114 million. GrowGen also delivered a net income of $4.0 million, or $0.07 per share based on a basic share count of 58.5 million. This missed the analyst estimate for earnings of $0.09 per share.

“The GrowGen team delivered a strong third quarter, with revenues up 111%, compared to the same period last year in a difficult macro environment,” said Darren Lampert, GrowGen’s Co-Founder and CEO. “Same-store sales at 25 locations increased 15.7% from the prior year. At present, we have 62 retail locations in operation. We increased our inventory positions across all key product categories to get ahead of price increases, as well as expanded more private label purchases. Our private-label and proprietary products reached approximately 8.7% of our overall sales in the third quarter. Our online marketplace, including Agron, is on pace to reach $35 million of revenue for 2021. We opened two locations in the Los Angeles metro area, and for next year, we are looking to open 15 to 20 locations.”

Same-store sales at 25 locations open for the same period in 2020 and 2021 were $59.2 million in third-quarter 2021, versus $51.2 million for third quarter 2020, a 15.7% increase year over year. GrowGen reported that private label sales, inclusive of Power Si and Char Coir, were 8.7% of revenue, compared to 2.1% for the same period last year. E-commerce revenue, inclusive of Agron revenue, was $10.5 million, compared to $3.9 million for the same period last year.

The company is in a solid place with cash and short-term securities as of September 30, 2021, at $93.0 million.

Mr. Lampert continued, “In order to position the company for 2022 and beyond, we have made several strategic decisions. Most importantly, we have organized the management team to focus on key deliverables. Over the past several months, we have brought on key leaders including Paul Rutenis, our Chief Merchant, to lead the private label and proprietary brands, Dennis Sheldon to run technology and supply chain, and Becky Gebhardt to run e-commerce and marketing. Tony Sullivan, our COO, will lead our effort to open new locations and retail operations. At present, we are on track for full year revenue of $435 to $440 million in 2021.”


Debra BorchardtAugust 12, 2021
GrowGen-Store.png?fit=783%2C434&ssl=1

6min940

Serial hydroponic acquirer GrowGeneration Corp. (NASDAQ: GRWG) reported record second-quarter 2021 revenues of $125.9 million, versus $43.5 million in the same period last year. This beat the average analyst estimate from Yahoo Finance for revenues of $111 million.  GrowGen also reported second-quarter 2021 GAAP pre-tax net income of approximately $9.6 million versus pre-tax net income of $2.7 million in the same period last year. The company also raised its 2021 revenue guidance to $455 to $475 million.

Diluted earnings per share, inclusive of tax expense, were $0.11 versus last year’s $0.06. This slightly missed the estimate for earnings of $0.12. Investors weren’t pleased and sent the stock tumbling over 9% to lately sell at $39. The average price target for the stock is $59.

Non-GAAP earnings before interest, taxes, depreciation, amortization, and share-based compensation (Adjusted EBITDA) was $14.5 million, compared to $4.4 million in the same period last year, or $0.24 per share, versus $0.11 in the prior years quarter.

“The GrowGen team delivered an exceptionally strong second quarter, with revenues up 190% compared to the same period last year, with same-store sales up 60%,” said Darren Lampert, GrowGeneration’s Co-Founder and CEO. “The entire enterprise generated more revenue in the first half of 2021 than all of 2020 and adjusted EBITDA in the first half of 2021 was more than all previous periods combined.  For the year, we closed 12 acquisitions, adding 20 hydroponic retail locations, bringing our total store count to 58. Our ability to attract and purchase the “best of breed” and largest hydroponic operators in the country was again evident with our signing of HGS Hydro, the country’s third-largest hydroponic chain. The strategies implemented several quarters ago are now positively impacting margins. We increased our inventory positions across all key product categories to get ahead of price increases, as well as expanded more private label purchases. Our private-label and proprietary products now account for approximately 7% of our overall sales.  I am proud and encouraged with our 170 basis point increase in gross profit margin. On a per share basis, adjusted EBITDA was $0.24 for the quarter versus $0.11 last year.  These increases were accomplished despite port delays, supply chain interruptions, and increases in container costs. Due to construction and building delays, we now believe the two Southern California and the Ardmore, OK , store openings will open in the fourth quarter.  The company continues to focus on building out a world-class supply chain, with omnichannel functionality, that will allow the company to continue to deliver ” just in time” inventory for all types of growers and cultivators.”

Following a standard retail strategy of growth by acquisition, GrowGen continued its purchasing habits after the end of the quarter. In July alone, GrowGen said it was buying HGS Hydro, the nation’s third-largest chain of hydroponic garden centers, with six stores across Michigan and a seventh store slated to open in the fall of 2021. It also bought Aqua Serene, a  Southern Oregon -based hydroponic garden center with stores in Eugene and Ashland, Oregon. Before the month ended, GrowGen bought Mendocino Greenhouse and Garden Supply, a Northern California -based hydroponic garden center, located in Mendocino, California.

Expansion Efforts

Coordinating all of this expansion is requiring the company to organize and build distribution and fulfillment centers. GrowGen’s supply chain spans approximately 875,000 square feet of retail and warehouse space, across existing locations and signed leases in new locations, spanning 13 states. In April 2021, it entered into a lease for a 40,000 sq. ft. facility in Jackson, MS , the 13th state of operation. In May 2021, it announced the building of a sixth Oklahoma location in Ardmore. The company also announced the addition of 52,000 square feet in downtown Los Angeles and 70,000 square feet in Rancho Dominguez, California , which will serve as distribution and fulfillment locations. The company is in the process of building additional locations that will serve as fulfillment centers that include 25,000 square feet in Phoenix, Arizona, and 58,000 square feet in Medley, Florida. These locations are expected to be opened by the fall of 2021.


StaffJuly 28, 2021
growGeneration-logo.jpg?fit=960%2C609&ssl=1

4min1290

GrowGeneration Corp. (NASDAQ: GRWG ) is at it again and the latest acquisition is HGS Hydro, the nation’s third-largest chain of hydroponic garden centers, with six stores across Michigan and a seventh store slated to open in the fall of 2021. This transaction is expected to close before the end of the fiscal year-end 2021. Founded in 2015 by Rocky Shaeena, HGS Hydro is the largest chain of hydroponic garden centers in the state of Michigan and generated approximately $50 million in revenue in 2020.

“We are excited to add HGS Hydro to our portfolio of stores before year-end, with its impressive leadership and commercial teams. The addition of HGS Hydro will propel Michigan to GrowGen’s second-largest state behind California. Michigan is one of the fastest-growing states for medical and recreational cannabis sales.” said Darren Lampert, GrowGen’s CEO. “We look forward to building on HGS Hydro’s experience as we continue to expand our commercial footprint. This acquisition represents our continued focus on purchasing ‘best of breed’ hydroponic operations in the U.S. and strengthening our management team with seasoned veterans from our industry.”

When completed, the transaction will also bring the total number of GrowGen hydroponic garden centers in Michigan to 14 and the total number of stores to 65. The new GrowGen locations will include Shelby TownshipSouthfieldSterling HeightsHazel ParkWalled LakeAlbion, and Imlay City, Michigan. GrowGen will announce its second-quarter results on August 12.

“The combination of HGS Hydro and GrowGeneration will further solidify GrowGen’s leadership position as the nation’s largest chain of hydroponic garden centers. As one of the pioneers of our industry, we are excited to bring our years of experience, insight, and relationships to the GrowGen team to assist in the Company’s continued growth and success,” said HGS Hydro’s CEO Rocky Shaeena.

“At HGS Hydro, my biggest priority has always been serving our loyal customers and providing an abundance of inventory at all times.  We have grown tremendously as a company in the past, and I believe merging with GrowGeneration will help us continue to grow with the best service and selection possible for our customers,” said Chris Kiryakoza, HGS Hydro’s COO.


Debra BorchardtJuly 22, 2021
growGeneration-logo.jpg?fit=960%2C609&ssl=1

4min640

GrowGeneration Corp . (NASDAQ: GRWG ) continues to gobble up regional hydroponic stores as the chain keeps growing. This week alone, the company has announced the acquisition of a California operation and one in Oregon.

Mendocino

Today the company announced its acquisition of Mendocino Greenhouse and Garden Supply, a Northern California -based hydroponic garden center, located in Mendocino, California. It is said to be the largest cannabis-producing region in the country including MendocinoHumboldt, and Trinity counties. GrowGen said that sales are expected to surpass $8 million annually.

“As the country’s largest legal cannabis market, California continues to be a critical market for GrowGeneration,” said Darren Lampert, GrowGen’s CEO. “The Emerald Triangle continues to represent tremendous market potential. We are proud to expand our presence in the area through a highly respected and leading hydroponics store such as Mendocino Greenhouse and Garden Supply. ”

Founded by Nick Halfacre in 2005, Mendocino Greenhouse and Garden Supply has provided Northern California growers with specialty hydroponic supplies and professional horticultural consultation services. Mendocino Greenhouse and Garden Supply’s team of eight employees will join GrowGen’s team of over 600 grow professionals as part of the transaction, while Mr. Halfacre will stay on as the garden center’s General Manager.

Said Halfacre, “Mendocino Greenhouse and Garden Supply was founded by growers for growers, and that ethos is at the center of everything we do. We look forward to continuing to provide best-in-class supplies and services under the GrowGeneration name.”

Oregon

Just two days ago, GrowGen said it was buying Aqua Serene, a southern Oregon-based hydroponic garden center with stores in Eugene and Ashland, Oregon. Aqua Serene is one of Oregon’s largest indoor/outdoor garden centers, with revenue of over $14 million annually. The Aqua Serene team of 10 employees will join GrowGen’s team.

“As the country’s fourth-largest legal cannabis market, Oregon continues to be a critical market for GrowGeneration,” said Lampert. “The Oregon market, in particular, represents tremendous market potential, with over thirteen hundred recreational producer cultivation licenses in the state. GrowGen is proud to expand its presence in the area through the acquisition of highly respected and leading hydroponics stores such as Aqua Serene.”


StaffMay 12, 2021
GrowGen-Store.png?fit=783%2C434&ssl=1

4min930

GrowGeneration Corp. (NASDAQ: GRWG) reported record first-quarter 2021 revenues rose 173% to $90 million, versus $33 million in the same period last year. This beat the analyst estimate for revenues of $87 million. GrowGen said same-store sales at 22 locations open for the same period in 2020 and 2021 were $43.0 million in first-quarter 2021 versus $28.5 million for first quarter 2020, a 51% increase year over year. Net income was $6.1 million, or $0.10 per share based on a fully diluted weighted average share count of 60.3 million. This beat the Yahoo Finance analyst estimate for $0.07.

“The GrowGen team delivered an exceptionally strong start to the year, with same-store sales up 51%, demonstrating the hard work of the entire team.  For the year so far, we closed 9 acquisitions, adding 15 hydroponic retail locations, bringing our total store count to 53. The strategies implemented several quarters ago, are now positively impacting margins.  I am proud and encouraged with our 110-basis point increase in gross profit margin and 510-basis point increase in adjusted EBITDA margin. These increases were accomplished despite port delays and supply chain interruptions. In addition, we acquired Char Coir, a line of premium coco-based products, and Agron.io, a popular B2B e-commerce website. Both companies are now fully integrated and contributing to both our top and bottom-line numbers.” Darren Lampert, GrowGeneration’s co-founder and CEO stated.  “Based upon our strong performance, we are now raising the financial outlook for the year and expect 2021 revenues to be between $450 million and $470 million, more than double the Company’s sales in 2020.  Further, at these projected sales, adjusted EBITDA guidance for 2021 is now $54 million to $58 million .”

The gross profit margin for first quarter 2021 was 28.2% compared to 27.1% in the same quarter last year, an increase of 110 basis points. Income before tax was $7.7 million for the first quarter 2021 versus a loss of $2.1 million for the same period last year. Adjusted EBITDA was $11.1 million for the first quarter of 2021 versus $2.4 million for the same period last year. Private-label sales, inclusive of Power Si and Char Coir, were 6.2% of revenue compared to less than 1% for the same period last year. E-Commerce revenue was $4.4 million compared to $1.9 million for the same period in 2020, an increase of 126%. Cash and short-term securities on March 31, 2021, were $133.1 million, compared $177.9 million at year-end December 31, 2020.

 


Choose Your News

Subscribe to the Green Market Report newsletter that gives you original content delivered straight to your inbox.

 Subscribe

By continuing I agree to your Privacy Policy and consent to receive relevant newsletters and other email communications on events, editorial features, and special partner offers from Green Market Report. I can unsubscribe or change my email preferences at any time.


About Us

The Green Market Report focuses on the financial news of the rapidly growing cannabis industry. Our target approach filters out the daily noise and does a deep dive into the financial, business and economic side of the cannabis industry. Our team is cultivating the industry’s critical news into one source and providing open source insights and data analysis


READ MORE



Recent Tweets

@GreenMarketRpt – 3 mins

Minnesota Regulators Sue Edibles Companies Over Potency, Product Violations

@GreenMarketRpt – 29 mins

Survey: Cannabis-based medicine Epidiolex works ‘across age groups’

@GreenMarketRpt – 2 hours

Crain’s Chicago Releases City’s Largest Cannabis Companies List

Back to Top

Choose Your News

Subscribe to the Green Market Report newsletter that gives you original content delivered straight to your inbox.

 Subscribe

By continuing I agree to your Privacy Policy and consent to receive relevant newsletters and other email communications on events, editorial features, and special partner offers from Green Market Report. I can unsubscribe or change my email preferences at any time.