Meet one of NY, NJ's biggest marijuana supporters: Scotts Miracle-Gro
Scotts Miracle-Gro won't sell marijuana in New York and New Jersey.
But the company's hefty investment in lobbying for recreational cannabis legislation shows it's setting itself up to reap a potential profit.
From vertical farming and hydroponic equipment to cannabis-oriented business lines, the last decade has seen Scotts realign itself with cannabis legalization around the country, even launching a subsidiary, Hawthorne Gardening Company, dedicated to cannabis-growing products.
But Scotts, the company known for selling its Miracle-Gro fertilizer and marketing Monsanto's RoundUp herbicide, is not taking any chances.
Scotts is spending considerable money lobbying New York and New Jersey to legalize adult use cannabis. And by targeting states with growing hemp sales as proxy markets for weed, the 150-year-old company is betting it can get on the ground floor alongside farmers and advocacy groups that see recreational cannabis as a profitable venture moving forward.
"Our leadership role ... requires us to manage and improve the marketplace and our freedom to operate in it," Jim Hagedorn of Scotts told investors at an earnings call earlier this year. "That's why we're investing more than anyone else to influence the political discussions around this industry and why our corporate foundation is supporting social justice issues related to cannabis reform."
A report from the New Jersey Election Law Enforcement Commission said Scotts was the top spender toward cannabis legalization in the Garden State. There, the commission said Scotts spent over $2 million on lobbying, a referendum in November and other contributions towards legalizing marijuana in the state. Scotts, according to the commission, was the largest group backing recreational marijuana in New Jersey.
Scotts lobbying by the numbers
Scotts has spent nearly $430,000 lobbying in New York since 2017, according to records filed with the state Joint Commission on Public Ethics.
Earlier this year, the firm paid for a study authored by economists James Parrott and Michele Mattingly that suggested New York could gain over 50,000 jobs from marijuana legalization.
Just like some farmers in New York say, leadership at Scotts says they are using their lobbying dollars to have a better grasp on the economic opportunity cannabis, hemp and CBD present to rural parts of New York.
According to the New York records, Scotts has its own in-house lobbyists and has hired two firms to represent it before the state, including the major Albany lobbying firm of Whiteman Osterman & Hanna, which the company is paying $8,300 a month for its services.
The other firm is Kivvit, which Scotts is paying $1,000 monthly. Among Kivvit's listed lobbyists are Rich Bamberger, Gov. Andrew Cuomo's former communications director, and Maggie Moran, Cuomo's former campaign manager.
Hagedorn, the chairman and CEO of Scotts, said the firm has supported CBD and hemp production as proxy markets for cannabis.
Scotts is currently supporting legislation for recreational marijuana use in 24 states. And according to the Federal Elections Commission, the Scotts Company has spent over $1.2 million in federal contributions since 2016.
Fourteen states and Washington D.C. have opted to pass recreational marijuana laws, including New Jersey.
New York appears poised to become the 15th: As of Wednesday afternoon, state lawmakers were reviewing the final details of an agreement struck by legislative leaders earlier in the day on a bill that would regulate the sale and use of cannabis products.
And while the changes in legislation have benefited farmers and dispensaries, they have also benefited sellers of equipment, lighting and watering systems that allow for the plant to be grown year-round.
Hawthorne Gardening, Scotts' cannabis-oriented subsidiary, announced the opening of a cannabis R&D facility in British Columbia, Canada in December.
"Cannabis legalization and regulation has created unique state based markets composed of new small businesses that we support," Brian Herrington, Hawthorne's vice president for external affairs, said in a statement. "We have proudly been active in states across the country where cannabis legalization has been considered at the ballot box and by state legislatures."
A 2020 annual report from Scotts said the company's product line includes gardening tools that may be used to grow cannabis such as hydroponic gardening tools. The firm also notes changing regulations among state and federal agencies make the future of some cannabis-oriented business lines uncertain.
A boon for farmers
Jeanette Miller, vice president of the Niagara County Farm Bureau, said support for legalization from Scotts could be good news for farmers in New York even if the firm has its own agenda.
"Without the equipment and the infrastructure or the ability to buy products people like me couldn't even get off the ground," Miller said. "When bigger companies have these products, or even if they have their own agenda to not New York State personally but say they want to open up shop in some other state and grow their own products, that still shows support."
Under the emerging marijuana deal at the state Capitol, New York would offer a license for legal cannabis farming, which could present the possibility of a new crop for some struggling farmers.
Miller, a 38-year-old farmer, said the passing of adult-use cannabis legislation may be good news for hemp farmers in New York that are restricted from selling commercial hemp despite federal government allowing cultivation for commercial enterprise in 2018.
The Niagara County Farm Bureau and the New York State Farm Bureau have lobbied the legislature in Albany for hemp, CBD and cannabis farming, Miller said. Both groups support rescheduling marijuana at the federal level.
Tech analytics firm New Frontier Data estimates sales of cannabis in the U.S. will reach $41 billion by 2025 — an increase from $13.2 billion in 2019.
Includes reporting by New York State Team Editor Jon Campbell.
Mario Marroquin covers real estate and economic development. Click here to see his latest stories. He can be reached at email@example.com or @mars3vega