GrowGeneration Archives - Green Market Report

Adam JacksonAugust 4, 2022


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 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 BorchardtJune 22, 2022


When Scotts Miracle-Gro (NYSE: SMG) first began telling shareholders that its hydroponic subsidiary Hawthorne was slowing in sales, it seemed like a temporary situation. That might not be the case. A new in-depth report by Wells Fargo analyst Chris Carey based on survey data collected by Cannabiz Media is depressing, to say the least. Reality bites.

Carey’s response to the study has promoted him to downgrade shares of Scotts to Equal Weight and roping his price target to $85 (from $115). The stock was lately selling at $75. He also cut his price targets on Hydrofarm (NASDAQ: HYFM) to $4 from $7 and GrowGeneration (NASDAQ: GRWG) to $3.50 from $4.00.

The report reached out to thousands of growers to ultimately develop a list of ~500 licensed cannabis cultivators responding across 6 states, via online surveys and hours of phone conversations. The study found that “Overall, 62% of cultivators feel “bad” or “terrible” about their current markets vs only 8% that feel “good” or “great”. When asked “what is going well for your business today?” ~20% responded with the equivalent of “nothing.” California was by far the state with the lowest sentiment with 70% of cultivators feeling “terrible” about the market, 16% feeling “bad” and only 5% ‘good’ or ‘great’.” The critical point here is that California has the worst outlook and it accounts for almost a third of the overall cannabis market. 

While other hydroponic companies have stated in earnings releases that they believed the landscape would improve by the end of the year, this report suggests otherwise. “Most growers we surveyed are not expecting things to improve in the near term, with only 14% expecting improvement in 6 months or less. Interestingly, 46% of respondents don’t know when things might improve underscoring the lack of visibility that has plagued the industry. While some capacity exiting is one of the few bright spots for the industry, we would likely need to see a higher level of exits or reduction in production to become more constructive.” When almost half of the growers say they have no idea when their market will improve, it’s not only a bad sign for farmers but the entire industry.

Stress Points

The survey uncovered the issues causing the stress at the beginning of the cannabis food chain. Declining wholesale prices led the way, followed by burdensome compliance requirements, taxes, illicit market competition and lack of distribution. Small growers can’t compete with the cost efficiencies of corporate cannabis and as the prices fall for their products, they are losing money. One grower told the group that they thought they’d sell cannabis anywhere between $1800 and $2200 a pound, but instead it’s going for $400 a pound. A California cultivator said he was selling cannabis at $200 a pound and paying $150 a pound in taxes. 

The survey on prices found that 60% said they were selling cannabis for under $750 a pound. 14% were selling between $751 and $1250, 18% were selling a pound between $1251 and $1500, and the rest (9%) were above $1500. They say they aren’t hitting the cost of production and many are considering selling their licenses or just giving up. 

The respondents seemed mixed on the effects of the illicit market. Some cited it as a major problem with these players flooding the market, while others didn’t think it was as big an issue as the regulatory requirements. Compliance requirements were a major stumbling block with one growing mentioning METRC as a challenge to deal with.

Plowing Ahead

The really sad part of the report was all the comments of cultivators wanting out. With little positive outlook and no idea when things will get better, many expressed the desire to just give up.  37% said that they have thought about leaving the industry but haven’t taken any steps to exit yet. Some are continuing to keep plowing ahead. The report said, “Cultivators indicated intentions to purchase soil (61%) and nutrients (73%) next 6 months, but just 32% have plans to buy lighting.” Only 18% of respondents described plans to decrease cultivation in the next 12 months compared to 35% planning to increase. 

However, in a standard investor philosophy, a correction can ultimately be a good thing. If lots of cultivators leave the industry, that will eventually lead to less supply and higher prices. Yet, a correction like this would take a long time to trickle down, and in the meantime, there is little positive to point to.

Debra BorchardtMarch 1, 2022


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.”


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.”

StaffJanuary 31, 2022


GrowGeneration Corp. (NASDAQ: GRWG) has acquired Horticultural Rep Group (HRG) for an undisclosed amount. HRG is a specialty marketing and sales organization of horticultural products based in Ogden, Utah. HRG represents hundreds of product SKU’s for GrowGen and other companies that are popular brands in the hydroponics market. In addition, HRG has participated in the sourcing of products across the horticultural and hydroponics industry. HRG will continue to supply the 800+ retail customers it currently services. HRG generated estimated revenue of $10 million in 2021 from sales agent commissions and distribution activity.

“With this acquisition, GrowGen is strengthening its global product supply chain and adding significant distribution of its growing list of private label products,” said Michael Salaman, President and co-founder of GrowGen. “Keith Harrington is one of the most respected executives and one of the early innovators of the U.S. modern horticultural market. We are excited that he will contribute his multi-decade expertise to the GrowGen team.”

Mr. Harrington has been in the lighting and heavy manufacturing industry his entire career. He started a horticultural lighting supply chain in the 1990’s and was also the majority owner of one of the two major hydroponic distributors at that time, Diamond Garden Supplies. Harrington established manufacturing and product sourcing offices in Xiamen, China in 1995, and he developed many of the original sources of product for the horticultural market coming out of China, many of which are still utilized today. Over the last 25 years, he has helped to develop, manufacture, and distribute many of the environmental/lighting controllers and horticultural lighting fixtures that have been sold in the 52 countries making up the global hydroponic market.

“I am looking forward to working with GrowGen to build out a tri-continent supply chain to offer developing markets around the world a best-of-breed supply of products from AsiaEurope, and the United States on one platform.” said Keith Harrington, Founder and President of HRG. “Given the current pace of consolidation happening in the U.S. market, I chose to partner with GrowGen because I believe it currently has the best management team in the industry and the best understanding of the culture of the market, which is important to me. I am excited to help them grow that culture and their business at the same time.” Mr. Harrington has been appointed Senior Vice President of Business Development at GrowGen.



Debra BorchardtJanuary 13, 2022


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.”


StaffNovember 11, 2021


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.”

StaffMay 25, 2021


GrowGeneration Corp . (NASDAQ: GRWG) is buying The Harvest Company, a northern California -based hydroponic supply center and cultivation design innovator with stores in Redding and Trinity County. The Harvest Company serves growers in Northern California’s Emerald Triangle, which is the largest cannabis-producing region in the country. GrowGen will now own 20 stores in the state of California – its largest footprint.

“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, in particular, represents tremendous market potential, with over 500 cultivation licenses in Trinity County alone. Redding also is seen as an important emerging cannabis market, and we are proud to expand our presence in the area through a highly respected and leading hydroponics store such as Harvest Company. ”

Founded by Robert Masterson, Harvest Company has provided Northern California growers with specialty hydroponic supplies and professional horticultural consultation services since 2014. The Harvest Company’s team of 16 employees will join GrowGen’s team of over 600 grow professionals as part of the transaction, while Mr. Masterson will stay on in an advisory role. Masterson said, “The Harvest Company 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.”

GrowGen owns and operates specialty retail hydroponic and organic gardening centers. Currently, GrowGen has 55 stores, which include 20 locations in California, 8 locations in Colorado, 7 locations in Michigan, 5 locations in Maine, 5 locations in Oklahoma, 2 locations in Nevada, 2 locations in Washington, 2 locations in Oregon, 1 location in Arizona, 1 location in Rhode Island,1 location in Florida, and 1 location in Massachusetts.

GrowGen also operates an online superstore for cultivators at and B2B ERP platform, GrowGen carries and sells thousands of products, including organic nutrients and soils, advanced lighting technology and state-of-the-art hydroponic equipment to be used indoors and outdoors by commercial and home growers.

StaffMarch 17, 2021


GrowGeneration Corp . (NASDAQ: GRWG) announced its latest acquisition as the chain continues to add to its nationwide empire. Today, the company said it was buying Aquarius Hydroponics, which is one of the largest hydroponics retailers in New England and was founded in 2013. The stock was slipping by over 3% in early trading to lately sell at $49.76. The average price target for GrowGen stock according to Yahoo Finance is $56.43.

The retailer has annual revenues approaching $5 million and carries both indoor and outdoor garden supplies at its 14,600-square-foot retail location in Agawam, Massachusetts.

“The Aquarius Hydroponics acquisition is a testament to our continued investment in best-in-class hydroponic suppliers in emerging adult-use markets across the U.S.,” said Darren Lampert, GrowGen’s CEO. “Importantly, it represents our entry into Massachusetts’ cannabis market, which is projected to become a $1 billion industry in 2021.”

As part of the transaction, the Aquarius Hydroponics team of 10 employees will join the GrowGen team. Owner Mark Hynes also will stay on in a technical support position. With the acquisition of Aquarius Hydroponics, GrowGen’s portfolio of hydroponic garden centers now includes 52 stores across 12 states.

“Aquarius Hydroponics has long been proud to serve growers in Western Massachusetts with our comprehensive catalog of indoor-outdoor growing supplies. Joining forces with GrowGeneration, the nation’s clear leader in hydroponics retail, allows us to leverage our combined decades of cultivation experience to meet the growing demands of Massachusetts’ flourishing legal cannabis industry,” said Aquarius Hydroponics founder John Eaton.

The Aquarius Hydroponics acquisition is GrowGen’s seventh 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.


Get the latest cannabis news delivered right to your inbox

The Morning Rise

Unpack the industry with the daily cannabis newsletter for business leaders.

 Sign up

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


Recent Tweets

Get the latest cannabis news delivered right to your inbox

The Morning Rise

Unpack the industry with the daily cannabis newsletter for business leaders.