Denver-based GrowGeneration (NASDAQ: GRWG) announced Monday the acquisition of Phoenix’s largest indoor and outdoor garden center, Hydroponics Depot, for an undisclosed sum.
The purchase adds to GrowGen’s expanding national footprint of Hydroponic gardening stores, which now includes 29 locations across 11 states.
In a news release, GrowGen chief operating officer Tony Sullivan said the company sees “tremendous potential” in Arizona, where voters will decide whether to legalize the possession and use of adult-use cannabis in November.
“We’re excited to add Hydroponics Depot to our growing portfolio, with year-to-date sales in excess of $5 million and year-over-year growth at 50 percent,” Sullivan said.
Hydroponics Depot is Arizona’s largest hydroponics retail store, and it sells products to commercial multistate cannabis operators such as Harvest Health and Curaleaf.
Arizona already boasts one of the largest medical marijuana markets in the country, with nearly 300,000 active cardholders as of September, and roughly 220,000 registered medical marijuana patients spent over $705 million on cannabis products in the state last year.
If Arizona residents vote to pass the ballot initiative next month, adult-use cannabis sales in The Grand Canyon State could reach $1 billion in the fourth year of legalization, according to New Frontier data.
That spells opportunity for GrowGen, which sells nutrients, soil, lighting, hydroponic equipment, and other gardening tools to both home and commercial growers.
According to an October investor presentation, GrowGen’s 2019 revenue exceeded $79 million, and the company is on pace to nearly double sales in 2020. Through the first six months of the year, its revenue totaled $76.4 million.
GrowGen has a history of acquiring independent hydroponics stores to fuel growth. In August, the company