MARYSVILLE, Ohio - The Scotts Miracle-Gro Company (NYSE: NYSE:SMG) has announced its support for the merger between RIV Capital and Cansortium (OTC:CNTMF), two prominent players in the cannabis industry. This endorsement comes as ScottsMiracle-Gro looks to bolster its strategic investment in cannabis cultivation and retail, particularly in key high-growth states.
According to the company's statement released today, the merger is poised to create a robust platform for expansion in states with significant population sizes, including Florida, Texas, Pennsylvania, and Alabama. RIV Capital (CSE: RIV) (OTC: CNPOF (OTC:CNPOF)) and Cansortium (CSE: TIUM.U) (OTCQB: CNTMF) have agreed to the combination, which will see them move forward under the Cansortium name.
ScottsMiracle-Gro, through its subsidiary The Hawthorne Collective, previously invested $175 million in RIV Capital via unsecured convertible notes. Once the merger receives regulatory and shareholder approval later this year, The Hawthorne Collective is set to exchange these notes for non-voting exchangeable shares in Cansortium.
The merger is seen as a strategic move for ScottsMiracle-Gro, which has been the largest investor in RIV Capital. The company's goal was to provide RIV with the financial stability needed to secure a New York state license and establish a foothold in the medical cannabis market, with an eye on the eventual legalization of adult use.
RIV Capital has already made significant strides in New York, developing cultivation operations and opening a dispensary in White Plains that has reportedly exceeded performance expectations. The combined expertise and financial resources of RIV and Cansortium are expected to facilitate further expansion, not only in New York but also in Florida, where adult-use cannabis will be on the ballot in November.
Looking ahead, ScottsMiracle-Gro anticipates that the newly formed Cansortium will actively engage in mergers and acquisitions to extend its geographic reach and build a portfolio of in-demand cannabis brands.
The information in this article is based on a press release statement from Scotts Miracle-Gro Company.
InvestingPro Insights
As Scotts Miracle-Gro Company (NYSE: SMG) continues to navigate the burgeoning cannabis industry through strategic investments, its financial health and market performance remain crucial for investors monitoring the company's long-term potential.
According to InvestingPro data, Scotts Miracle-Gro has a market capitalization of $3.79 billion and maintains a strong shareholder yield, which is a positive signal for investors seeking companies with a commitment to returning value. Despite a challenging period with a reported net income growth decline of 8.26% over the last twelve months as of Q2 2024, analysts are expecting an uptick in the company's net income this year.
InvestingPro Tips indicate that Scotts Miracle-Gro's stock price has experienced significant volatility, which may appeal to certain investors looking for trading opportunities, while potentially serving as a caution for those with a lower risk tolerance. Furthermore, the company has a long-standing history of dividend payments, having maintained them for 20 consecutive years, with a current dividend yield of 4.02% as of the latest data.
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