Scotts Miracle-Gro, the lawn and fertilizer giant who opened a side business as a pioneer in the cultivation of cannabis and hemp, launches a $ 50 million venture capital fund called1868 Ventures.
Is it strange that a fertilizer company commits to a $ 50 million fund to invest in two to three start-ups per year over the next few years? It’s 2020, friends, nothing makes sense.
Except it could?
New discoveries around crops, the development of organic pesticides and herbicides, and the wave of new applications of hemp and cannabinoids in manufacturing, healthcare, and legal recreational use are creating new opportunities for the company and Scotts Miracle-Gro is looking to capitalize on their.
At least, that’s the word from the company’s chief financial officer, Randy Coleman.
“The company is doing extremely well in our two large companies,” said Coleman. “A lot of this has to do with the nascent cannabis industry.”
For those who do not know, although Scotts Miracle-Gro is huge in the hedge sector, it also has a subsidiary called Hawthorne Gardening Company which it created in 2014 to meet the specific needs of cannabis growers.
“We identified certain areas that we knew we needed to supercharge a little, ”said Coleman. And after a discussion with the members of its board of directors, the company decided to turn to Touchdown Ventures to fuel its new branch of investment.
The areas of investment that the company intends to seed with its follow-up funding include technology to assist with controlled agricultural environments and plant genetics.
“Much of this work is done in our Hawthorne, Canada business,” said Coleman. “Along the way, as the laws change in the United States, we could do more there … Right now, the R&D we do on hemp in Oregon.”
The company will also explore ways to boost e-commerce and reach out directly to consumer channels as more and more Americans use online commerce instead of shopping in physical stores. Coleman said that sales of Scotts Miracle-Gro were up 200% on digital channels, including Amazon.
Finally, natural products and sustainable packaging are also attractive to the company, said Coleman.
“I really like the exposure to more ideas and the distribution of our risks and opportunities,” he said.
1868 Ventures will be agnostic and investments will vary between $ 250,000 and $ 2.5 million, looking at companies mainly in North America.
To help the company’s venture capital initiatives, Scotts called on Touchdown Ventures, a company specializing in corporate venture capital. Touchdown will work closely with senior Scotts Miracle-Gro executives to manage the fund, the company said.
“We are excited about the capital investment, industry expertise and customer validation that Scotts Miracle-Gro can bring to innovators in lawn and garden care and agriculture by controlled environment, “said David Horowitz, co-founder and CEO of Touchdown Ventures, in a statement. “We believe Scotts Miracle-Gro will be the partner of choice for entrepreneurs looking to create a competitive advantage for their startups in these categories.”