GrowGeneration Corp., a Denver-based chain of stand-alone specialty hydroponic and organic garden centers, has acquired the assets of H2O Hydroponics LLC in Lansing.
Following the purchase, GrowGeneration, which has 27 locations nationwide, will open a new facility in the state capital that will serve as a retail/commercial operation as well as a fulfillment center, supporting the company’s online and direct-to-farm deliveries.
“H2O Hydroponics is the largest hydroponic store in Lansing with 2019 sales of approximately $4 million,” says Darren Lampert, CEO of GrowGeneration. “We are consolidating our current West Lansing location, with H2O, and relocating into a newly built 15,000-square-foot super hydroponic garden center that we expect will generate over $7 million in sales. With this acquisition, we continue to increase our footprint and strengthened our supply chain in the Michigan market.”
The recreation marijuana market in Michigan is expected to be a boom for the suppliers like GrowGeneration.
“It is estimated that the level of cannabis retail sales once it becomes widely available is approximately $3 billion with a total economic impact in excess of $7.8 billion,” according to a March 2020 report by the Michigan State University Product Center Food-Ag-Bio. “Employment in businesses along the marijuana supply chain is estimated to be 13,500 with a total economic impact on employment in the state of 23,700.
“Total tax revenue raised is $495.7 million of which $298.6 million is excise taxes and $197.1 million are in the form of sales taxes,” the report continued. “The supply chain for marijuana was also analyzed. It appears that the supply chain is maturing rapidly, with several well-funded vertically integrated firms already operating. Both indoor and outdoor growing operations are in place but over time it appears that much of the production will take place in dedicated indoor growing facilities.”
According to the law passed in 2018, individuals can grow up to 12 plants and/or possess up to 10 ounces of cannabis, which also may benefit operations like GrowGeneration.