GrowGeneration Archives - Green Market Report

StaffStaffFebruary 23, 2021
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4min990

GrowGeneration Corp . (NASDAQ: GRWG) is buying San Diego Hydroponics & Organics, a four-store chain of organic, hydroponic and aquaponics garden centers in San Diego, California. The company said that San Diego Hydroponics & Organics is San Diego County’s premier hydroponic equipment supplier, with annual revenues approaching $10 million. GrowGen did not say what it paid for the company.

This latest acquisition brings the total number of GrowGen hydroponic garden centers to 50 stores.  In California, the country’s largest legal cannabis market, GrowGen now has 17 stores,  with eight of those stores located in Southern California.

Southern California is a priority market for GrowGeneration, and we are excited to add San Diego Hydroponics & Organics to our ever-expanding footprint there,” said Darren Lampert, GrowGen’s CEO. “As the leading hydroponics supplier, San Diego Hydroponics & Organics strategically positions GrowGen to conveniently provide our services to commercial growers in the Southern California market.”

San Diego Hydroponics & Organics was founded in 2001 by Todd Kent. The company first opened its doors with an 800-square-foot store in Pacific Beach, California, and has since expanded to four locations with more than 20,000-square-feet of retail space and 20 employees, who will join GrowGeneration’s team of over 500 grow professionals as part of the transaction.

“Since 2001, we’ve remained committed to our goal of supplying Southern California with top-quality products, cutting-edge horticultural technology, and unbeatable customer service. Our partnership with GrowGen, the nation’s clear leader in hydroponics, allows us to marry decades of combined cultivation expertise and knowledge to better serve the Southern California market,” said San Diego Hydroponics & Organics’ founder Todd Kent .

The San Diego Hydroponics & Organics acquisition is GrowGen’s fourth this year and follows yet another quarter of record earnings. In January, GrowGen pre-announced fourth-quarter revenues of $61.5 million, bringing full-year 2020 revenue to $192 million, up 140% from 2019. Same-store sales increased 63% for full-year 2020, compared to the previous year. The Company also raised its 2021 revenue guidance to $335 million – $350 million and raised its 2021 adjusted EBITDA guidance to $38 million – $40 million. GrowGen plans to have 55 garden center locations by the end of 2021.

The four analysts covering GrowGen have an average price target of $56.43 according to Yahoo Finance. The stock was lately trading at $49.50, down from its 52-week high of $67.


StaffStaffFebruary 1, 2021
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4min1440

It seems a month doesn’t go by without  GrowGeneration Corp . (NASDAQ: GRWG ) making another acquisition. February is only just starting  and the hydroponic store chain has said it is buying Grow Depot, a two-store chain in Auburn and Augusta, Maine. The acquisition brings the total number of GrowGen hydroponic garden centers in Maine to five, with locations in AuburnAugustaBiddefordBrewer, and York.

“It’s a very exciting time in Maine’s adult-use market, and we’re pleased to expand our footprint in the state through our acquisition of Grow Depot, which has proudly served the Central Maine area for nearly a decade,” said Darren Lampert, GrowGeneration’s CEO. “With our expanded footprint, the Maine market is expected to generate 2021 annual revenues of over $20 million for GrowGen.”

Founded in 2012 by Jim Parisi, Grow Depot carries a large catalog of equipment for indoor growing and hydroponic systems. As part of the transaction, both Jim and Anthony Parisi, with over two decades of experience in the indoor growing supply industry, and their 10 employees will join GrowGen’s team of more than 450 grow professionals.

The Grow Depot acquisition is the company’s second of the year and follows yet another quarter of record earnings. Last month, the Company pre-announced fourth-quarter revenues of $61.5 million, bringing full-year 2020 revenue to $192 million, up 140% from 2019. Same-store sales increased 63% for full-year 2020, compared to the previous year. The Company also raised its 2021 revenue guidance to $335 million – $350 million and raised its 2021 adjusted EBITDA guidance to $38 million – $40 million. GrowGen plans to have 55 garden center locations by the end of 2021.

The stock hit the $53 mark in January, but then it seemed investors took some profits as the stock has slid back to the $43 range. Both Roth Capital and Ladenburg Thalmann downgraded the company to neutral which may have been the reason why the stock slipped. The average price target is $52.71 according to Yahoo! Finance.


StaffStaffJanuary 26, 2021
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3min1380

GrowGeneration Corp . (NASDAQ: GRWG ) is at it again. The hydroponic chain has acquired Indoor Garden & Lighting, a two-store chain of hydroponic equipment and indoor gardening supply stores serving the Seattle and Tacoma, Washington area. GrowGen said it will be consolidating its current Seattle operation into the acquired stores. This acquisition brings the total number of GrowGen hydroponic garden centers nationwide to 40 stores. The company stock was jumping over 2% in early trading to lately sell at $49.66, closing in on its 52-week high of $53.

“We’re thrilled to kickstart 2021 with our acquisition of Indoor Garden & Lighting, which boasts a strong commercial customer base and a talented team of grow professionals,” said Darren Lampert, GrowGeneration’s CEO. “This deal expands our footprint in the Pacific Northwest and puts us in close proximity to Tacoma’s large commercial operators. With the addition of Indoor Garden & Lighting, we expect Washington’s thriving adult-use market to generate annual revenues of $10 million for GrowGen.”

Founded in 1995, by Mike Long, Indoor Garden & Lighting has operations in Tacoma and Mountlake Terrace.  GrowGeneration also plans to operate out of Indoor Garden & Lighting’s 10,000-square-foot warehouse in Tacoma. As part of the deal, Long and his team of cultivation experts will join GrowGeneration.

The Indoor Garden & Lighting acquisition is the Company’s first acquisition this year and follows yet another quarter of record earnings. Earlier this month, GrowGen pre-announced fourth-quarter revenues of $61.5 million, bringing full-year 2020 revenue to $192 million, up 140% from 2019. Same-store sales increased 63% for full-year 2020, compared to the previous year. The company also raised its 2021 revenue guidance to $335 million – $350 million and raised its 2021 adjusted EBITDA guidance to $38 million – $40 million. GrowGen plans to have 55 garden center locations by the end of 2021.


StaffStaffJanuary 11, 2021
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3min2540

Ahead of the Virtual ICR Conference 2021, being held from Monday, January 11, hydroponic chain GrowGeneration Corp. (NASDAQ: GRWG) released preliminary record full-year 2020 revenue of $192 million, versus $80 million for 2019, an increase of 140%.  The company also said that its fourth-quarter 2020 revenue rose 142% to $61.5 million, versus $25.4 million for the fourth quarter of 2019.

In addition to that, GrowGen reported that same-store sales were up 63% for full-year 2020 versus full-year 2019. Same-store sales were up 58% for the fourth quarter of 2020 versus the fourth quarter of 2019. A total of 14 new and acquired store locations in 2020, increasing locations nationwide to 39.

“We delivered strong shareholder value in 2020, with triple-digit revenue growth despite unprecedented challenges and an uncertain environment. This growth came through strategic acquisitions of best-in-class hydroponic stores, exceptional same-store sales growth, and the expansion of our omnichannel and private label offerings – a strategy we will accelerate this year,” said GrowGen CEO Darren Lampert. “We expect significant revenue growth in the year ahead as we continue to execute on these initiatives. Accordingly, we have raised our 2021 revenue guidance to $335 – $350 million, our 2021 adjusted EBITDA guidance to $38 million – $40 million, and increased the number of projected GrowGen store locations to 55.”

The four analysts covering GrowGen have an average price target of $36 according to Yahoo Finance. The stock was lately trading at $45, near its 52-week high of $48.

Buying Binge

Since 2014, GrowGen has acquired 34 stores and opened 16 new stores. The company has identified Ohio, Illinois, Pennsylvania, New York, New Jersey, Massachusetts, and Missouri as new markets where it plans to open new operations.  On August 10, 2020, it acquired the assets of Benzakry Family Corp, d/b/a Emerald City Garden, in Concord, Ca. On October 12, 2020, the company acquired the assets of Hydroponics Depot, LLC, a single store located in Phoenix, Arizona. On October 20, 2020, the company acquired the assets of Big Green Tomato, a two-store chain in Battle Creek and Taylor, Michigan. On November 17, 2020, the company acquired the assets of The GrowBiz, which we believe is the third-largest chain of hydroponic garden centers in the United States, with four stores in California and one store in Oregon. In connection with the GrowBiz acquisition, Ross Haley, the founder of The GrowBiz and the former CEO of Hawthorne Gardening Company, a Division of Scott’s Miracle-Gro, joined the Company as a senior strategic advisor.


Debra BorchardtDebra BorchardtDecember 23, 2020
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3min4100

GrowGeneration Corp . (NASDAQ: GRWG) can’t seem to stop growing and said it is buying Southern California -based Canopy Crop Management and its complete portfolio of products, including the Power SI brand of silicic acid-enriched fertilizers. The company did not disclose how much it paid for Canopy Crop. It is the second acquisition in Southern California this month and the third acquisition in the state since November.

Canopy Crop Management was founded in 2019 and is recognized as the industry’s leading silicic acid company. Power SI will continue to be sold through Canopy Crop Management to all hydroponic retail stores including Grow Generation’s 39 locations.

“Private label expansion has become a strategic priority for GrowGen, and a key component of our long-term revenue generation plan,” said Michael Salaman , GrowGen’s President and Co-Founder. “We are proud to bring Canopy Crop Management and its founder Rex Gill under our umbrella. Rex brings his unique technologies and proprietary products to GrowGen and will be instrumental in leading private label product development within the nutrient and additive space.”

GrowGen’s Growth

Since 2014, GrowGen has acquired 34 stores and opened 16 new stores. The company has identified Ohio, Illinois, Pennsylvania, New York, New Jersey, Massachusetts and Missouri as new markets where it plans to open new operations.  On August 10, 2020 it acquired the assets of Benzakry Family Corp, d/b/a Emerald City Garden, in Concord, Ca. On October 12, 2020, the company acquired the assets of Hydroponics Depot, LLC, a single store located in Phoenix, Arizona. On October 20, 2020, the company acquired the assets of Big Green Tomato, a two-store chain in Battle Creek and Taylor, Michigan. On November 17, 2020, the company acquired the assets of The GrowBiz, which we believe is the third-largest chain of hydroponic garden centers in the United States, with four stores in California and one store in Oregon. In connection with the GrowBiz acquisition, Ross Haley, the founder of The GrowBiz and the former CEO of Hawthorne Gardening Company, a Division of Scott’s Miracle-Gro, joined the Company as a senior strategic advisor.

“I started Canopy Crop Management with the goal of providing the highest-quality formulations, and I’m fortunate to find a partner like GrowGen, one of the most trusted names in hydroponic and organic gardening,” said Gill, Canopy Crop Management’s CEO. “I look forward to creating new and innovative silicic acid formulas and organic pesticides and fungicides that are much more cost-effective than what is currently on the market.”

 


StaffStaffDecember 15, 2020
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4min2210

GrowGeneration Corp . (NASDAQ: GRWG) has just announced its seventh acquisition of the year with its purchase of California-based Grassroots Hydroponics. This three-store chain of hydroponic garden centers in Southern California is known for being home to high-volume retail locations in AnzaLake Elsinore, and Murrieta. With these additions, GrowGen will operate 13 stores in the booming California cultivation market and 39 total retail locations across the country.

“We are pleased to add Grassroots to our growing portfolio, with its strong commercial operations and market position,” said Tony Sullivan, GrowGen’s COO. “We look to acquire best-in-breed hydroponic operations that complement and expand our footprint in mature cannabis markets, and Grassroots delivers a priority region, the critical Southern California market, for GrowGen.”

In November, GrowGen announced third-quarter revenues of $55 million and adjusted EBITDA of $6.6 million, which was the company’s 11th consecutive quarter of record revenues and EBITDA. The company also increased its 2020 revenue guidance to $185 million – $190 million, and adjusted EBITDA to $19.0 million – $20.0 million. It also updated revenue and adjusted EBITDA guidance for 2021 to $280 million – $300 million, and $34 million – $36 million, respectively.

Founded in 2008, Grassroots Hydroponics is one of the largest hydroponic operations in Southern California, with annual revenues approaching $20 million. This is GrowGenerations’s second acquisition in the state within a one-month period; in November, GrowGen acquired The GrowBiz, the nation’s third-largest chain of hydroponic garden centers, with stores in Northern California and Oregon.

Upsized Offering

GrowGeneration is also very favored by investors. The company recently upsized its offering from $125 million to $150 million. On Monday, the company completed the offering of an aggregate of 5,750,000 shares at a public offering price of $30.00 per share for gross proceeds of approximately $172.5 million. 

The company said it intends to use the net proceeds from this offering primarily to expand its network of hydroponic/garden centers through organic growth and acquisitions and for general corporate purposes. Since 2014, GrowGen has acquired 34 stores and opened 16 new stores. The company said it plans to continue to pursue acquisitions going forward. “We actively evaluate and pursue acquisitions on an ongoing basis, and are focusing on Ohio, Illinois, Pennsylvania, New York, New Jersey, Massachusetts, and Missouri as new markets where we plan to open new operations,” it said in the new prospectus.

 

 

 


Debra BorchardtDebra BorchardtAugust 13, 2020
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4min17130

GrowGeneration Corp. (NASDAQ: GRWG) reported revenues of $43.5 million for the second quarter of 2020 and is raising its guidance for 2020 revenue. GrowGeneration‘s new forecasted range for revenue is $170 million$175 million and the adjusted EBITDA is estimated to be $17.0 million$18.0million. Revenue guidance for  2021 is $245M$260M. Adjusted EBITDA guidance for 2021 is $26M$28M.

The stock was jumping over 13% as the company easily blew past the Yahoo Finance average analyst estimates of revenue at $36 million. Shares were lately selling at $10 in early trading. On June 29, 2020, the company was added to the Russell 3000 Index.

GrowGeneration also reported GAAP net income per share, basic, was $.07 for the second quarter vs $.04 for the same time period in 2019. This also beat the analyst average estimate for $0.05. The average price target is $10.14. The GAAP net income was $2.6 million for the second quarter vs net income of $1.1 million for the same time period in2019.

Darren Lampert, Co-Founder and CEO, said, “Our online business increased by 149%, Q2 2020 versus Q2 2019. Our commercial division generated over $9.0 million in revenues, an increase of 142% Q2 2020 versus Q2 2019. The Company added 167 new commercial customer accounts from Q1, 2020 to Q2 2020, and now services over 700 commercial accounts. We continue to see strong demand for our products that include LED lights, nutrients, additives, soils and other products that outfit and feed grower’s gardens. Our Sunleaves private-label nutrient and additives line of product is now generating over $100,000 a month in sales.”

Despite voicing earlier warnings about COVID’s effect on brick and mortar stores, the company said that its weekly walk-in transactions had increased 50 %, quarter over quarter.

Cash Cushion

GrowGeneration is sitting comfortably on a solid cash footing. The working capital was $35.2 million on June 30, 2020, vs $30.6 million on December 31, 2019. The cash on June 30, 2020, was $14.8 million, cash on December 31, 2019, was $12.98 million, and cash as of August 12, 2020, was $59.3 million. This was certainly helped with the July offering of 8,625,000 shares generating $48.3 million in gross proceeds.

Looking Ahead

The company currently has 28 locations and has set its sites on expansion. It has set a corporate goal to reach 50 stores and 15 states in 2021. Earlier this week on August 10, 2020, the company purchased the assets of Emerald City Garden, located in Concord, CA as another step towards market domination.

 

 


StaffStaffJune 30, 2020
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3min6490

Cannabis investors remain hungry for stock as long as the company is one with solid and consistent revenue. It seems GrowGeneration Corp. (NASDAQ: GRWG) and Innovative Industrial Properties, Inc. (NYSE: IIPR) are two such companies. Both priced and upsized offerings today

IIP Upsizes Huge Offering

Innovative Industrial Properties, Inc. (IIP) priced its underwritten public offering of 2,683,363 shares at $83.85 per share for gross proceeds of approximately $225 million. The deal is expected to close on or about July 2, 2020. The underwriters also have a 30-day option to purchase up to an additional 402,504 shares of its common stock.

IIP said it plans to use the net proceeds from this offering to invest in specialized industrial real estate assets that support the regulated cannabis cultivation and processing industry that are consistent with its investment strategy and for general corporate purposes.

According to Yahoo Finance, five analysts cover the stock. Four have a buy rating, while one is at hold. The average target price is $111 and the stock is currently trading near $85.

GrowGeneration Upsizes Offer

GrowGeneration Corp. (NASDAQ: GRWG) priced an underwritten public offering of 7,500,000 shares of its common stock at $5.60 per share. GrowGen said it expects the gross proceeds to be roughly $42 million, before deducting the underwriting discount and other estimated offering expenses. The deal was upsized from the previously announced offering size of $35 million of common stock and is expected to close on July 2. The underwriters have a 30-day option to purchase up to an additional 1,125,000 shares of common stock offered in the public market.

According to Yahoo Finance, five analysts are covering the stock and all have a buy rating. The average target price is $8 and the stock is selling near $6.50. The average revenue estimate for the current quarter is $36 million, an increase of 87% over last year’s sales for the same time period.


Debra BorchardtDebra BorchardtJune 10, 2020
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6min11140

Grow Generation Corp. (NASDAQ:GRWG) stock fell over 3% in early trading after the company announced a $35 million stock offering and gave hints of potential COVID troubles ahead.

The hydroponic store chain filed an S-1 to offer $35 million in stock plus a 30-day option to purchase up to an additional 15% of the shares or $5.25 million. The company said in a statement, “We intend to use the net proceeds from this offering primarily to expand our network of hydroponic/garden centers through organic growth and acquisitions and general corporate purposes.”

However, within the S-1, GrowGeneration hinted that there could be problems on the horizon as a result of the pandemic.

The company stated in its filing that COVID-19 was affecting its operations. “Although we have been deemed an “essential” business by state and local authorities in the areas in which we operate, we have undertaken the following measures in an effort to mitigate the spread of COVID-19 including limiting store business hours, and encouraging employees to work remotely if possible. Moreover, the COVID-19 pandemic has caused temporary or long-term disruptions in our supply chains and/or delays in the delivery of our inventory. Further, the COVID-19 pandemic and mitigation efforts have also adversely affected our customers’ financial condition, resulting in reduced spending for the products we sell.”

The company said that many of its suppliers were experiencing operational difficulties as a result of COVID-19, which in turn may have an adverse effect on its ability to provide products to our customers.

Manufacturing plants have closed and work at others curtailed in many places where we source our products.  Some of our suppliers have had to temporarily close a facility for disinfecting after employees tested positive for COVID-19, and others have faced staffing shortages from employees who are sick or apprehensive about coming to work.  Further, the ability of our suppliers to ship their goods to us has become difficult as transportation networks and distribution facilities have had reduced capacity and have been dealing with changes in the types of goods being shipped.

GrowGeneration also noted that returning to business, as usual, may not be so simple.  “Once we are able to restart normal business hours and operations doing so may take time and will involve costs and uncertainty. We also cannot predict how long the effects of COVID-19 and the efforts to contain it will continue to impact our business after the pandemic is under control. Governments could take additional restrictive measures to combat the pandemic that could further impact our business or the economy in the geographies in which we operate. It is also possible that the impact of the pandemic and response on our suppliers, customers and markets will persist for some time after governments ease their restrictions. These measures have negatively impacted, and may continue to impact, our business and financial condition as the responses to control COVID-19 continue.”

For now, the company said things seem to be okay. It said that the difficulties experienced by the suppliers had not yet impacted its ability to get products to customers. The company also noted that it does not significantly depend on any one supplier. “However, if this continues, it may negatively affect our inventory and delay the delivery of merchandise to our stores and customers, which in turn will adversely affect our revenues and results of operations. If the difficulties experienced by our suppliers continue, we cannot guarantee that we will be able to locate alternative sources of supply for our merchandise on acceptable terms, or at all. If we are unable to adequately purchase appropriate amounts of inventory, our business and results of operations may be materially and adversely affected.”

Currently, GrowGen has 27 stores, which include 5 locations in Colorado, 5 locations in California, 2 locations in Nevada, 1 location in Washington, 4 locations in Michigan, 1 location in Rhode Island, 4 locations in Oklahoma, 1 location in Oregon, 3 locations in Maine and 1 location in Florida. GrowGen also operates an online superstore for cultivators, located at www.growgen.pro and www.growgeneration.com.

 

 


Debra BorchardtDebra BorchardtMay 14, 2020
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6min6950

GrowGeneration Corp. (NASDAQ:GRWG) continued to crush it with record first-quarter sales of $33 million, but then reported a net loss of $2.1 million as it paid out shares in new executive agreements. Still, GrowGeneration increased its guidance for upcoming revenue and the stock was rising over 3% in early trading to lately sell at $4.83.

The hydroponic and organic gardening chain delivered its 10th consecutive quarter of record revenue as the first quarter clocked in at $33 million versus last year’s first-quarter revenue of $2.7 million. The company beat the average revenue estimate of $31.55 million from Yahoo! Finance.

The company reported a loss per share of $0.55, which greatly missed analyst estimates of $0.03.

GrowGeneration is 2020 raising its revenue guidance to $135M$140M and the adjusted EBITDA to $12.0M$14.0M. The revenue guidance for the second quarter $36.0M$37.0M. Guidance for Q2 2020 adjusted EBITDA is $3.6M and GAAP pre-tax net income is $2.1M.

Same-store sales revenue increased 58% to $15.2 million for the quarter versus revenues of $9.6 million for the quarter ending March 31, 2019.

Executives Prove To Be Expensive

The company’s net loss of  $2.1 million was a big change from last year’s first-quarter net income of $229,000. The company blamed it on $4.1 million in non-cash share-based compensation due to several new executive employment agreements which became effective January 1, 2020, that had some accelerated vesting. In a statement, the company said, “Had the new executive shared based awards been level vested and not front-end vested, the company would have Q1 2020 net income of approximately $332,000 on a GAAP basis.” The remainder of the year is expected to be much lower for these expenses and should be roughly $2.4 million.

“Our online business is being integrated as part of our omnichannel strategy with all our store’s locations, “Order online and pickup in-store”. We generated over $1.0 million in online sales in one month for the first time in the history of the Company in April 2020,” said Darren Lampert, Co-Founder, and CEO. “Our commercial division is approaching $30 million in expected annual sales, with today over 500 active commercial customers.”

COVID-19

GrowGen benefited from the designation as an “essential” supplier to the agricultural industry, supplying the nutrients and nourishment required to feed their plants. “Accordingly, we are open during this difficult time and will remain open for the foreseeable future. We have plans and procedures in place to ensure our customers and employees stay safe during this time of uncertainty. All of us at GrowGeneration remain committed to the safety and well-being of our customers and employees and send our prayers and thoughts to all in the growing community.”

In addition to that, GrowGeneration said it has committed to donating up to $500,000 of free products to its loyal customers and local communities that have been severely affected.

Currently, GrowGen has 27 stores, which include 5 locations in Colorado, 5 locations in California, 2 locations in Nevada, 1 location in Washington, 4 locations in Michigan, 1 location in Rhode Island, 4 locations in Oklahoma, 1 location in Oregon, 3 locations in Maine and 1 location in Florida. The company just opened a 40,000 sq. ft commercial and online fulfillment center in Tulsa, OK. It is a super-hydroponic center that had sales of $770,000, in April, its first full month of business.

 



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