GrowGeneration at Consumer Growth Conference: Strategic Shift to Product-Driven Model

On Monday, 09 June 2025, GrowGeneration Corp (NASDAQ:GRWG) presented its strategic vision at the 25th Annual Consumer Growth and E-Commerce Conference. The company announced a significant shift towards a product-driven model, expanding its reach beyond cannabis into the broader lawn and garden market. While the strategy promises growth and profitability, it also involves challenges such as closing retail stores and navigating global trade issues.

Key Takeaways

• GrowGeneration announced the acquisition of Viagro, enhancing its presence in the lawn and garden market.
• The company is transitioning from retail to a business-to-business model, focusing on distribution.
• Financially strong with over $50 million in cash, GrowGeneration aims for profitability in upcoming quarters.
• Potential cannabis rescheduling could benefit the industry and GrowGeneration’s business.
• Cost-cutting measures include reducing inventory and closing retail locations.

Financial Results

GrowGeneration reported a robust financial position with over $50 million in cash and inventory valued in the mid-forties of millions. The company successfully generated close to $3 million from non-operating cash last year. With a market cap of $65 million, GrowGeneration has effectively maintained cash reserves between $50 million and $70 million over the past three years, with no immediate plans to raise additional capital. Cost-cutting initiatives have been implemented, including an $80 million reduction in inventory and $50 million in cost savings, setting the stage for anticipated profitability in the near term.

Operational Updates

The acquisition of Viagro marks a strategic expansion into the lawn and garden sector, leveraging GrowGeneration’s cannabis cultivation expertise. This move is expected to be immediately accretive, with plans to integrate Viagro’s products into GrowGeneration’s distribution network and e-commerce division. The company is shifting from a retail-centric approach to a business-to-business model, reducing its retail footprint to approximately 20 stores, which will serve as distribution centers and mini-hubs. This transition aims to enhance efficiency and customer service while cutting costs.

Future Outlook

Looking ahead, GrowGeneration anticipates growth in 2026, driven by strategic acquisitions, product innovation, and operational efficiencies. The potential rescheduling of cannabis could bring significant capital back into the industry, benefiting GrowGeneration by eliminating the 280E tax penalty and leveling the playing field against illegal markets. The company remains focused on launching new products across both cannabis and lawn and garden markets, with plans for further acquisitions to strengthen its product and relationship portfolio.

Q&A Highlights

During the conference call, CEO Darren Lambert emphasized the company’s expertise in plant cultivation, stating, "If you can grow a cannabis plant, you can grow any plant." He also highlighted the vast total addressable market (TAM) in the lawn and garden space, which is significantly larger than the cannabis market. CFO Greg Sanders reassured stakeholders of the company’s strong financial position, noting the absence of a near-term need to raise additional capital.

In conclusion, for a more detailed understanding of GrowGeneration’s strategic direction and financial outlook, readers are encouraged to refer to the full transcript.

Full transcript - 25th Annual Consumer Growth and E-Commerce Conference:

Brian Nagel, Senior Equity Research Analyst, Oppenheimer: Well, good morning, everyone. Thank you for joining us. This is our twenty fifth annual Oppenheimer consumer growth and ecommerce conference. I was very pleased to have you serve. I guess we’re kicking the session we’re kicking the conference off at this moment.

So thanks everyone for joining us. My name is Brian Nagel. I serve as the senior equity research analyst at Oppenheimer covering consumer growth in ecommerce. So I’m very pleased to have our presenting company today, GrowGeneration. Two of the company’s senior executives, founder, chairman, CEO, Darren Lambert, and CFO, Greg Sanders.

So, gentlemen, thank you for joining us.

Darren Lambert, Founder, Chairman, CEO, GrowGeneration: Thank you, Brian. Always a pleasure. Thanks, Brian.

Brian Nagel, Senior Equity Research Analyst, Oppenheimer: So I’ve had you know, those of you who follow my research know that I’ve have had the pleasure of covering GrowGeneration very closely now for a numb a number of years. So I I I I I I I I I remain extraordinarily impressed at how this business continues to evolve, particularly against a really difficult, you know, backdrop within the cannabis cannabis space. So what I’d love to start the conversation with, Darren, is you made an announcement just literally a few minutes ago about an acquisition you’re making. So maybe we can start start there. Talk about the acquisition, then we can, you know, talk more about the how this strategy of of GrowGen is evolving here.

Darren Lambert, Founder, Chairman, CEO, GrowGeneration: Hey, Brian. It was a pleasure this morning. We just finished, off for a couple months of due diligence, and we purchased Viagro this morning. Viagro is a small but growing, company in the lawn and garden space that distributes proprietary brands into Home Depot, Lowe’s, Tractor. They have some wonderful contracts and and some wonderful products that, you know, that we believe, you know, have tremendous longevity in the industry.

The buyer grow was extremely undercapitalized. We’re taking the company and really bringing GrowGen’s knowledge of the industry, you know, for from growing a plant. And, you know, we believe that we we build upon, you know, what they’ve built over the last twenty years. And, also importantly, that we also have contacts within big box now and into lawn and garden that we believe that our charcoal drip and, and other brands and hardcore brands would also serve a tremendous runway for us, in to lawn and garden. Now one thing that we’ve been very passionate about, if you can grow a cannabis plant, you can grow any plant.

It’s the most difficult plant in the world to grow. And, what you’re starting to do is see some crossover, some verticals from GrowGen. And, you know, we are coming out with products right now that, albeit, are in the cannabis space, but they grow a plant. They grow a stronger plant with stronger roots. And we always say if you can grow a cannabis plant and you use GrowGen’s products, you will have the biggest, best tomatoes in the country, in your neighborhood.

And We couldn’t be any more excited to start expanding GrowGen’s reach out with our distribution and our also our product knowledge.

Brian Nagel, Senior Equity Research Analyst, Oppenheimer: So, Jared, with respect to this acquisition, I I guess maybe it’s a good dovetail to kinda have a strategy of of GrowGen is evolving. But, I mean, it’s so I guess as we’re looking at this acquisition, you’re talking about how, you know, this is gonna help you partner with some of the, you know, the bigger box like the Home Depots and Lowe’s of the world. We as as investors, should we expect more acquisitions like this to come?

Darren Lambert, Founder, Chairman, CEO, GrowGeneration: I believe you should on the product side of it, you know, and also on the relationship side of it. You know, what GrowGen right now is doing is is as we’ve told Wall Street and certainly have spoken about it, you know, pretty openly, that the TAM in the lawn and garden space is is hundreds of times the TAM right now in what we do. We’re in an extremely specialized part of growing. And what you’ve seen over the last ten years is you’ve seen lawn and garden companies come into the cannabis space to try to help. And we’ll be the going the other way that, you know, company that is pretty much has made its mistake in the cannabis space, now switching over and also joining the lawn and garden space.

And we believe that we will bring cutting edge products into this industry, and really start growing our private label brands. As you know, we’ve we’ve built, private label at GrowGen from 0% about five years ago. It’s approaching 35% of sales right now. And we are rolling out new products, you know, on a monthly basis right now. And, you know, it would be no.

It’s an honor, but we do believe that these products will end up in lawn and garden and then also the cannabis space, and we’ll start really bringing some real dollars to to to grow Jen’s portfolio.

Brian Nagel, Senior Equity Research Analyst, Oppenheimer: And what type of investment? So and, again, I wanna talk a bit about, there’s kind of how, like I was saying before, how the the business model is really evolving here from stores based model now to one that’s, you know, more focused on your own products and private label. But I guess the question I want to ask initially, you as you list particularly with an acquisition like this today, I mean, how much of investment do you need in your your business in order to support, you know, these type of acquisitions and and then growing these type of companies or brands? Yeah.

Darren Lambert, Founder, Chairman, CEO, GrowGeneration: The one part, Dila, that is really nice, you know, as we as GrowGen has consolidated over the last couple years, as everyone knows back in 02/2021, we were $425,000,000 business and ran into some issues in the cannabis space and, with legalization and everything else. And, you know, so right now when we take a look at the at the staff at GrowGen, our distribution centers at GrowGen, our mini hubs within GrowGen, you know, we believe we have tremendous runway without investing much money, into these initiatives. So, you know, we I think we have the nuts and the bolts in place right now, Brian, that we probably have a runway of $50,000,000 without with very little investment. So, you know, as we continue to grow this side of the business, you will see money, you know, dropping to the bottom line. We believe this this acquisition is immediately accretive to GrowGen as we will be shutting their warehouses down, bringing their products into our distribution centers, and also combining it with our e com division, and our distribution bit, division.

So, you know, for us, it’s a win win.

Brian Nagel, Senior Equity Research Analyst, Oppenheimer: Now look. I think a big theme of our conference, you know, over the next few days will be global trade and tariffs. So maybe we can just kinda dive into that here, you know, just talk about this acquisition. So where are these where where, you know, either this company you’re purchasing or just in general, how where where are the products sourced and to what extent, you know, or is is GrowGen is, you know, affected by or impacted by some of these these shifts in global trade policy, tariffs, etcetera?

Darren Lambert, Founder, Chairman, CEO, GrowGeneration: You know, we are we we we are seeing some some issues with products where we’re bringing in from India right now. But as you know, that they relaxed the tariffs for India down to 10%. But albeit, we’re bringing in, you know, 15 to $20,000,000 of cocoa every year. We are negotiating with vendors overseas and also passing some price some price increases onto our customers. And I and I think that’s really what you’re seeing around.

You know, you you’ve seen that for most distribution companies right now and manufacturing companies. There’s only so much you can pass on, but certainly a large part will be passed on. A lot of the Viagro products that we’re buying are manufactured here. Some are also manufactured over in India where cocoa is coming in. So it’s a balancing act like anything else.

Some of the products have sufficient margins that we can eat some of it. But, you know, it’s gonna be give and take. And, you know, right now, one of the hardest parts is, you know, we’re very unsure of the go forward with the tariffs right now. If they stay the way they are with just the additional 10%, it’s certainly you know, it’s, you know, it’s something that, you know, most companies can’t handle.

Brian Nagel, Senior Equity Research Analyst, Oppenheimer: So talk a bit, Derek. Again, you’re going just back the the evolution of the business. So, you know, not that long ago, you know, and I I was following GrowJan closely. Mean, you were, you know, you were growing out essentially retail stores, you know, both to to so DIY customers and professional customers focused primarily on the cannabis space. So I guess the question I wanna ask is how should we think about the the kind of retail presence now of of of GrowGen, particularly with this new strategy?

Darren Lambert, Founder, Chairman, CEO, GrowGeneration: I think the future of GrowGen is not in the retail spaces, Brian. You know, cannabis was was was was certainly a a a new segment in you know, that came very quickly and grew very quickly. And I think what you’re starting to see right now in the space that we’re in, it’s really gone business to business. And business to business, you know, right at at this point right now, it’s really serviced out of the warehouses, out of the hub stores. It’s it’s it’s far it’s it’s it’s distribution to farm shipments.

So, you know, right now, you know, we’re seeing much less traffic within the stores, you know, and and and those are getting less and less every day. It’s not that business is not good. We’re just doing a lot more shipping. We’re doing what our customers want. And we’ve opened portals up in the last six months that are that are that are working, and we’re starting to see the adoption of the portal business right now.

Opposed to going to the store, you go on your portal when you order, and it shows up the next day or a couple days later. And with the implementation of our private label brands, going into our warehouses from where we’re ordering, It’s just an easier solution for GrowGen, also a cheaper solution. We’re cutting out basically the stores of the middleman in a lot of ways. And what we’ve seen is, and I think you probably have seen it around the country, that, you know, rents continue to go up, labor continues to go up. And in a business to business world, it’s just not the way to service customers anymore.

So we may be giving up certain of our smaller customers that can go online or shop on our portals. But, you know, right now, you know, GrowGen has a very specific go forward, and it is shutting another 10 stores getting down to that 20 store number right now. But the 20 stores are really distribution centers for us. They’re mini hubs. They’re advertising for us, marketing for us, but the easiest way to fulfill our customers.

And there are certain there are still certain states out there, with a tremendous amount of growing because you have caregiver rules and just different licensing rules. So the stores that have tremendous walk in business, those stores we will keep. But, you know, right now, we review the portfolio every day. You know, we still look back to 02/2020, when the company did a $180,000,000 in sales, pretty much where we are right now, and we made $20,000,000 that year on an EBITDA basis. So we continue to cut costs out of this business, Brian, and we continue to evolve.

And, you know, GrowGen’s only been in business eleven years, and, you know, they’re one of garden companies out there, you know, still, you know, from the nineteen hundreds. And with the products that we’re bringing out and the technology at GrowGen right now, you know, there’s no reason that this company doesn’t get profitable and gets back on that growth growth trajectory.

Brian Nagel, Senior Equity Research Analyst, Oppenheimer: So if if we’re looking at the business today, you know, kinda looking over the next, you know, few few several years there, what what’s the what’s the model gonna look like then? Is it, you know, that you’re the tweet you mentioned the twenty twenty stores was now service distribution centers. Would you need more distribution capacity beyond that?

Darren Lambert, Founder, Chairman, CEO, GrowGeneration: Depends where sales go, Brian. You know, right now, we have plenty of runway. So, you know, the runway right now, we can, you know, close another 10 stores and still service out of our distribution centers and hubs, the same amount of business that we’re doing right now. So, you know, we’re just cutting out the redundancy. There’s a lot of redundancy, you know, when you build a business, you know, from you know, it was $80,000,000 in 02/2018, and we grew it to 425,000,000 in ’21.

So the redundancies are all coming out of the business right now. The technology is much better at GrowGen. Our distribution centers are working well. Our portals are working well. But I think most importantly, you’re seeing tremendous launch of products out of GrowGen.

So, you know, GrowGen will be, you know, any you know, we part partially a CPG company in certain ways. The products are gonna be the most important part for us right now, as we launch new products, you know, into into both sides of the industry, both cannabis and lawn and garden. You know, a couple of them one of our products is is is our charcoal product is over $20,000,000 brand right now and growing, you know, and our drip products also. So we have shown to Wall Street, and also to the to the investment community that we can take a product from from r and d through registration, through launch and packaging. So have a tremendously dynamic team at GrowGen right now that is as sophisticated as any group on the plant growing side of it.

And that’s not just cannabis. It’s lawn garden. It’s plants. You know? We and then I always say if you can grow a cannabis plant, you can grow any plant.

Brian Nagel, Senior Equity Research Analyst, Oppenheimer: So how does competition change? And, again, I’m I’m just continuing to hit on my theme of, you know, how the business is evolving. But, again, you know, not that long ago when you were, you know, a retail operator focused on the cannabis space, and we used to look at this as, you know, in a very, very fragmented space, GrowGeneration was really the leading player. You know, the and how did how did so as we look at the business evolve now and, you know, turn much more of a product company going moving beyond the cannabis space, how do you think about the competitive set out there?

Darren Lambert, Founder, Chairman, CEO, GrowGeneration: You know, the competitive set is certainly, you know, for us, we’re the top of the food chain, and we always will be. It’s because of our commercial team also. So one of the things, you know, as we close stores, you know, managers are staying with us. They’re becoming commercial sales people. So, you know, we you know, we’re rejiggering in a lot of ways, you know, the way our staff works.

You know, the big joke at GrowGen right now is if you’re sitting in the store waiting for someone to come in, you’re not doing your job. So if you get back, get out on the street, you go to the farms, you go to the grows, you go to this you know, you gotta get out. You know? If you’re waiting for someone to show up, you’re gonna be you know, you’re not gonna be you’re not gonna have a productive day. So, you know, that’s kind of what we’ve seen.

And, you know, at GrowGen, you know, we we track customers coming into the store as we always have. And when you start seeing those numbers drop so precipitously because people you don’t wake up in the morning anymore, Brian, and say, you know, I don’t wanna be a banker anymore. I don’t wanna be an analyst. I wanna grow cannabis. That happened back during COVID.

You can’t even imagine the amount of money that was being thrown in the cannabis space, and it’s disappeared. And, you know, there’s a lot of pricing has dropped in certain places. So, you know, it’s survival of the in a lot of ways. There are a lot of hydroponic stores closing right now. The TAM is just too small for the amount that was built.

But, you know, with what we have right now and the skill of our commercial team, our commercial team is growing. So it’s not that we’re stopping you know, we’re not we’re not stopping the train. We’re reformulating in a lot of ways.

Brian Nagel, Senior Equity Research Analyst, Oppenheimer: That’s helpful. And then to and talk you know, as you build this collection of brands, I mean, maybe you can go hone back in upon the acquisition was announced just a while ago. You know, to to what extent your your customers that if, you know, if you have one brand, are they asking for more brands? I mean, does having a bigger portfolio help to endure you further, you know, to these customers like, you know, like the Home Depot’s the role that you mentioned at the onset or even some of your maybe your bigger commercial customers?

Darren Lambert, Founder, Chairman, CEO, GrowGeneration: I think when you when when when you when you hone in on the cannabis space, we’ve we’re coming out with the process, Brian, that we believe, you know, you will grow, you know, probably the best plants in the country, but more importantly, at the cheapest prices. So products that we’re rolling out right now, our drip our drip brand, which, you know, which is again, you know, from from we started, that’s over $10,000,000 right now, but we believe, you know, it’s got runway to 50,000,000 over the next five years. It’s the it’s the cheapest nutrient brand on the market right now, when you go price per gallon, and it’s the cleanest. And, you know, we have side by side tests done. You know, we have lab reports done.

The only issue we always have is it takes time to switch. You know, it takes time to switch people off their feeding regimens. It’s kind of it’s almost taken to, you know, when when when you go into the drug industry to change someone, you know, from one drug to another. But everything takes time, and everything is very deliberate with with the groups, especially the larger groups that we deal with. So, you know, when we always say, you know, we need a little more time.

But when you take a product that’s growing 25, 30, you know, 50% year over year, You know, for most products, it’s spring it’s wonderful. But, know, for GrowGen right now, you know, we’re looking we’re always looking for more. But we continue to innovate. Our guys understand the industry well. The packaging coming out of ProGen is as sharp as any packaging you’ll see in the lawn and garden space.

And, you know, when you start looking and, you know, we’ve run, you know, all kinds of different tests, you know, and and and and and customer segmentation and everything else. And what we’ve seen is most people in the world right now, you know, are not happy with the products that they’re using in lawn and garden. Everyone’s looking for something new. It’s it’s been a very stagnant space in places. And, you know, we believe that GrowGen can change that.

And I think that most people out there in this day and age believe that if you can grow a cannabis plant, you can grow any plant. So what you’re starting to see even in the small IGC world is new products all the time. So when you walk into a typical, you know, IGC center, it’s a small independent garden store, they do carry cannabis products, products, soils, and everything else. And we’re starting to see a tremendous transformation over to Coco. You know, we believe that we have the best Coco brands in the country right now out of Charcot or, you know, from their cocoa coins that we just came out with that are in lawn and garden right now to our cocoa pots.

It’s just a cleaner way to grow. So, you know, we believe that, you know, you’ll see a different grow gen in the future, but we will still stay germane to what we do right now. Our commercial team will lead this industry on the cannabis side of it. But there will be another group in GrowGen that, you know, that specializes in lawn and garden, and we’ll take products that we’re rolling out from one side of it and also and bring it into the other.

Brian Nagel, Senior Equity Research Analyst, Oppenheimer: So over time, again, you know, just, you know, listen to how the business is is shifting here. I mean, how should we think about what ultimately could be the split between what the legacy, so to say, cannabis business and then, you know, this this newer portion to, you know, garden lawn and gardening or, you know, gardening more broadly?

Darren Lambert, Founder, Chairman, CEO, GrowGeneration: I think the bigger split we get, Brian, the more profitable we’ll become, the more successful it will become. You know, when we take a look at cannabis right now, you know, we believe the industry is flattened. And, you know, we still believe there’s growth within the industry, but some of the some of the some of the holdbacks right now in the industry is that most of our customers have gotten more much more efficient in how they grow and and what they grow. So what you’re starting to see is when you look back five years ago, you know, a lot of the cultivators are getting another 40%, you know, from their garden, you know, using better products right now. So, you know, even though, you know, the the cannabis industry is growing, whether it’s, you know, again, single digits and everyone always thought, you know, low single digits, but our customers are getting that much more efficient and growing, so they need less products to grow.

So, you know, right now, that’s still a catch up. We believe that our cannabis business is extremely stable right now, and we will see some growth hopefully in ’26 within it as we stabilize it. You know? And and, you know, as we close stores, we do lose some customers, So we still need to pick that back up. But the lawn and garden space, you know, we’re starting from a, you know, a very small a very small place.

So, you know, we believe incrementally as we grow it, it will start exploding on the upside for GrowGen. And, you know, we look forward to sharing those numbers in in ’26 and hopefully breaking those out from our cannabis numbers so you can see the true growth in lawn and garden from us.

Brian Nagel, Senior Equity Research Analyst, Oppenheimer: So, Jim, let’s just talk about you know, you and I have talked over the years a lot about, you know, just we we mentioned here, you know, kind of the health of the cannabis space and the the driver. So I guess, you know, maybe get your your your latest thinking on, you know, what what’s happening with legalization, you know, on the, you know, local level, maybe even federal level. You know, is there is there anything that that we were talking about, you know, the the business is not growing today like it was, you know, historically. You know, is is there something that could you know, is is there is something out there that could change the rate to sort of, say, really drive that growth in cannabis?

Darren Lambert, Founder, Chairman, CEO, GrowGeneration: There’s so much that can happen, Ryan. You know, it’s it’s been this it’s been this back and conversation. It’s probably going, you know, going we got in this industry in 02/2014, so it’s been it’s going on twelve years. I’m at a cannabis conference right now in Chicago at Benzinger and having dinner with all the large MSO CEOs this evening. And, you know, everyone’s still always optimistic like anything else, but we’ve heard very little from the government, you know, since the Trump administration has come in.

And, you know, he was pro Canada’s prior to to winning the election. So, you know, we believe that he’s that that he will follow through with it. We just don’t know when. You know, like anything else, the world is busy right now, and it’s probably not top of the list even though it probably should be in a lot of ways. But anything when it comes to rescheduling, you know, safe banking will be a tremendous boost for this industry, on the balance sheet side of it, on the income side of it, on the education side of it, and also the stigma against what you’re seeing right now.

You know, it’s it’s hard to believe, you know, in this day and age, you know, in the you know, where the world is right now that you have a schedule one drug that, you know, everyone is smoking. I mean, schedule one drug is supposed to be something that is deadly, that there’s no medical benefits to it. So the schedule, what you see it right now, is so contrary to to the to to to education, to science, to everything that you see. But, you know, everyone seems to be content within the government that just leave it there. And it’s, you know, it’s something that needs to be changed.

It’s 75, 80% approval rating in The United States right now. So, you know, if it’s not now, I would imagine going into the interim elections in another year from now. People are gonna need some votes. So something’s gonna need to be done because it’s really on the industry. You’re seeing a lot of closures.

You’re seeing a lot of bankruptcies right now in the industry on the gross side of it. And, you know, people that have I mean, work, you know, work long and hard, you know, going out of business, and, it’s not helping anyone. There’s, you know, people losing jobs all over the country right now in this space. And this is a space that should be thriving right now, not, you know, not dwindling. So, you know, like anything else, it’s time.

Everything is time. And, you know, the one thing I I’ve certainly have learned in Wall Street is people don’t wanna hear that. No one no one wants to hear time. People want results today. And I wish I can give it to them, but we believe what we’ve done at GrowGen, you know, over the last couple years, bringing inventory down, you know, about $80,000,000, cutting costs probably about $50,000,000, keeping our balance sheet extremely strong, and and spending time restructuring this company slowly and getting it to where it is today that we believe that this company will be profitable in the next couple quarters.

And, you know, from there, we believe that you will start seeing growth in GrowGen, you know, hopefully going into ’26. Would like to see it sooner, Brian, but, you know, it’s just again, we just you know, I I can’t give you that commitment right now.

Brian Nagel, Senior Equity Research Analyst, Oppenheimer: So in terms of rescheduling, Darren, you know, if if if this happens or, you know, what’s how should we think about what could be the near term, almost immediate impacts for a company like Rojan?

Darren Lambert, Founder, Chairman, CEO, GrowGeneration: It brings money back onto the balance sheets of our customers. You know, right now, there was tremendous building, know, building of facilities between 1821. And most of these facilities need to be refurbished. They need new lighting. They need need new dehumidification.

They need air conditioning control systems. And a lot of the companies don’t have the money to do it. So what you’re starting to see is stress within the industry because a lot of the facilities are falling apart. The lighting is starting to go. The dehumidification is starting to go.

The capital equipment is gone. And two eighty e I mean, rescheduling gets rid of $2.80 e, which is a tax penalty on grower on commercial growers, licensed growers because of it’s a schedule one illegal drug. So, you know, president Trump was was was very amenable, and he said he would state by state, but he would reschedule to three. Health and human services came out and recommended it. 95% of what they recommended the DEA gets approved.

This one has been just shuffled back and and is sitting on someone’s desk quietly for months already. So this is contrary to what you’ve always seen from the, health and human services and the DEA. But what you will see, bottom line, is a couple billion dollars coming back onto the, you know, going into the income statements, back onto the balance sheets, and really shoring up the industry. And, you know, we always say the better our customers get, the better we are. It’ll also help put away the illegal markets.

The illegal markets have such an advantage over the legal markets because they’re saving 80% and not paying taxes. And what that does is it drives pricing down. So these so our customers can’t make money. And if our customers can’t money make money, they can’t buy products. They can’t pay their bills.

So, you know, it’s that it’s that it’s that trickle down effect that rescheduling will change it all if they reschedule to three. And that’s where it belongs. I mean, cannabis just isn’t a schedule one drug. You know, in context, fentanyl is a schedule two drug. So, you know you know, on you know, if you look at the schedules, cannabis is more dangerous than fentanyl.

And it’s, you know, it’s scheduled like heroin and and and, you know, and some psychedelics. And it’s you know, again, we’re not you know, this isn’t the nineteen hundreds. You know, we look right now at the industry we’re in. We know we’re still in prohibition. You know, even though it’s it’s acceptable in so many different levels, the government’s taxing it, making money.

You know, you’re seeing state by state. You know, the whole thing is a convoluted mess right now, Brian. You know, we believe it gets sorted out. You know, every once in a while, you hear something really positive, but it just disappears. But, you know, we still run GrowGen like, you know, like nothing’s going to happen.

But when it happens, we believe there’ll be a tremendous amount of building. There’ll be a you know, again, I think you’ll see increased sales on the other side of it, so which will which will trickle down to increase sales on our side of it. So, you know, right now, as you know, you know, we have over $50,000,000 cash on our balance sheet. We have, you know, mid forties in inventory. You know, we have a small company, MMI, that’s that’s doing $25,000,000 and making money.

So when you look in the investment side of GrowGen right now, you got a company trading, you know, with a $65,000,000 market cap that’s got 90 over $90,000,000 in cash and inventory, notwithstanding all the assets coming out of GrowGen. So, you know, we couldn’t be any more positive in what we have here right now. And, you know, as time comes, I do believe that people will start understanding really, you know, the potential and the power that GrowGen has in the future.

Brian Nagel, Senior Equity Research Analyst, Oppenheimer: No. That’s a it’s a perfect segue. Sometimes, I I know where time’s running down here, I maybe it’ll be the last topic we’ll discuss. But just Greg, I’d love to get you in too on the the capital side. So those numbers you just went through, Darren, you’re you’re extraordinarily liquid.

So I guess the way I wanna ask the question is, I mean, given all the shifts happening at GrowGen now, you you know, is there any need for GrowGen to raise capital? Do you or is your balance sheet sufficient to sort of say get you through this transition?

Greg Sanders, CFO, GrowGeneration: Yeah. We’re in a strong financial position from a liquidity perspective. We’ve maintained cash between 50 and 70,000,000 for really the trailing three years throughout this downturn, and we don’t see any near term need to raise additional capital. You know, from a an operating capital perspective, you know, we generally run the business with 5 to 10,000,000 of capital on any given day, and the rest goes into investment accounts. Last year, we generated close to $3,000,000 in returns from our nonoperating cash.

So it is a a benefit and a strength in ways, and we intend to continue to manage our balance sheet very tight, particularly through this downturn. And the ways that we look at the use of capital are if there are ways that we look at, you know, potentially growing the business into the future, like the acquisition we announced this morning, we’ll pursue those types of opportunities.

Brian Nagel, Senior Equity Research Analyst, Oppenheimer: Perfect. Well, we got a couple minutes left. Is there Jeremy, is there anything else you wanna make sure we we we any message we wanna get out there?

Darren Lambert, Founder, Chairman, CEO, GrowGeneration: Brian, I think, you know, I think the story is pretty clear, and I think that it’s not just a cannabis story. It’s it’s it’s really it it’s a lawn garden cannabis. It’s it’s a product driven company right now that, you know, the closing of the stores, I think, is is beneficial to the shareholders, beneficial to the company. You know, as we are able to use our portals, use our commercial team, really to bring this company where it is. You know, we still do believe that GrowGen will always have some stores around the country.

And, you know, we’re excited about the path that we’re taking right now. You know, our our staff at GrowGen’s you know, the tenure of our staff, it’s you know, again, is getting better every year. And, you know, we continue to pick up tremendous talent in the industry. So, you know, I think you’re gonna hear some really good things in GrowGen going into ’26. We’re excited.

You know, we’re excited about the industry. We’re excited about the verticals, you know, that where we where we can go, and how we get there. So I think you can hear some great things from us, Brian. We’re excited. You know, you would never know by looking at the price of our stock, but there’s a lot of excitement in our company right now.

The staff is energized, and the staff is ready to do the job really to get this company back to where it was a couple years ago.

Brian Nagel, Senior Equity Research Analyst, Oppenheimer: Well, John, I appreciate your time. It’s always a pleasure having you at our conference. Good luck at the conference you’re at, and I look forward to watching the continued evolution of GrowGen.

Darren Lambert, Founder, Chairman, CEO, GrowGeneration: Always appreciate it, Brian. Thank you so much for your time.

Brian Nagel, Senior Equity Research Analyst, Oppenheimer: Thanks, guys.

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