GrowGeneration Corp. has opened a 9,000-square-foot store in Richmond, its first hydroponic store in Virginia. GRWG has plans to expand its store presence in the state to capitalize on the emerging hydroponic market. It also signed two new leases for store launches in Mount Holly, NJ, and Hazelwood, MO, which are expected to open in the fourth quarter of 2022. With these, GRWG expanded its reach to 17 states.
Virginia expected to be a key driver
Legislation in Virginia allows unlimited medical cultivation licenses and the growing of cannabis at home. This makes it an ideal choice for GRWG’s one-stop shop that provides new and existing cultivators with seeds for better harvesting, including turnkey facility design, cultivation room design, on-site project consultation, and access to its private-label products. Virginia is also considered a prime market to supply indoor-controlled environmental agriculture and vertical gardening.
Expanding in new and emerging markets
GRWG’s new store leases in Mount Holly and Hazelwood align with its endeavors to increase its presence in the new and emerging markets. These new stores will provide vertical farming demonstrations and educational support for new growers and help them set up and maintain state-of-the-art growing operations, thereby maximizing their investments in vertical farming. In addition, GRWG also continues to build its distribution capabilities regionally to deliver products to new and existing growers efficiently and profitably.
Overall weakness in cannabis industry
GrowGeneration’s results are bearing the brunt of the overall weakness in the cannabis industry. Demand for GRWG’s hydroponics products fell due to an oversupply of cannabis in the United States. GRWG’s revenues plunged 43.5% year over year to $71 million in the second quarter of 2022 as same-store sales slumped 57%. GRWG reported a loss per share of 14 cents in the quarter against the earnings of 11 cents in the second quarter of 2021.
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