HIGH HOPES AT MIRACLE-GRO IN MEDICAL MARIJUANA FIELD

Scotts Miracle-Gro Co. has long sold weed killer. Now, it's hoping to
help people grow killer weed.

In an unlikely move for the head of a major company, Scotts Chief
Executive Jim Hagedorn said he is exploring targeting medical
marijuana as well as other niches to help boost sales at his lawn and
garden company.

"I want to target the pot market," Mr. Hagedorn said in an interview.
"There's no good reason we haven't."

Sales at Scotts rose 5% last year to $2.9 billion. But the Marysville,
Ohio, company relies on sales at three key retailers--Home Depot
Inc., Lowe's Cos. and Wal-Mart Stores Inc.--for nearly two-thirds of
its revenue. With consumers still cautious about spending, the
retailers aren't building new stores as quickly as they used to,
making growth for suppliers like Scotts harder to come by. Against
that backdrop, Mr. Hagedorn has pushed his regional sales presidents
to look for smaller pockets of growth, such as the marijuana market,
that together could produce a noticeable bump in sales.

Sixteen states have legalized medical marijuana, the largest being
California and Colorado. The market will reach $1.7 billion in sales
this year, according to a report by See Change Strategy LLC, an
information data services company.

While the report focuses on revenue from growers and dispensaries,
Kris Lotlikar, president of See Change, said the market for companies
selling hydroponic equipment and professional services is also thriving.

"We see very good growth for these types of companies as the
medical-marijuana business grows," he said.

Marijuana use remains illegal under federal law, but federal raids on
medical dispensaries have eased since President Obama took office. And
while major public companies haven't openly targeted the market, in
recent months medical-marijuana companies have sought money from
venture capitalists and signaled future IPOs.

Centennial Seed Co., a Boulder, Colo., medical-cannabis seed seller,
is seeking $500,000 through a private offering. General Cannabis Inc.,
whose stock trades on the Pink Sheets, supports the medical-marijuana
market with financial and Internet services.

The 55-year-old Mr. Hagedorn isn't a typical suit-wearing CEO. A
former F-16 fighter pilot, he flies his Cessna to and from meetings in
Port Washington, N.Y., where he grew up, and the company's
headquarters in Ohio, much to the chagrin of his board. He also
peppers his language with swear words and military references, and he
showed up at the office on a recent June day in jeans and sneakers.

Mr. Hagedorn took over Miracle-Gro from his father, who co-founded the
company. The idea to merge with Scotts dawned on him after he looked
at the company's market value in 1995, he said, so he called his
father's tax lawyer to vet the idea. "I said, 'Bob, I got this f------
crazy idea. Do you think it'd be f------" possible to take over Scotts?'"
he recalls, sitting in the Port Washington office that his father once
occupied.

Mr. Hagedorn is serious about sales growth, no matter how small. On a
recent trip to a Farmingdale, N.Y., Home Depot, he saw a customer
having a difficult time choosing soil. "C'mon, go help him out," he
told Mike Carbonara, Scotts' president for the Northeast. A few
minutes later, the customer was walking away with a bag of
Miracle-Gro. Over the next half hour, Mr. Carbonara influenced three
more sales.

Targeting marijuana isn't the only way Mr. Hagedorn is pursuing growth
outside the national chains. Scotts is also looking to sell more
through grocery stores.

And the company is recultivating its ties to independent
lawn-and-garden-store owners, including offering them exclusive
products. Mr. Hagedorn strained those ties with a 2009 speech in which
he criticized the owners for not doing enough to promote Scotts
products, prompting many owners to walk out.

"I don't give speeches to independents anymore," he
said.

To target marijuana growers, Scotts would likely buy niche dirt
companies that already exist rather than create its own line of
branded products.

Raids on pot-growing operations have turned up Scotts products. Mr.
Hagedorn takes that as a good sign of brand awareness, but he fears
that some growers would be reluctant to use a mainstream product.

Rollitup.org, a website geared toward the marijuana-growing community,
has several forums that debate Miracle-Gro's effectiveness. A user
with the moniker Weedqueen12 wrote: "i think [Miracle-Gro] works
well." Another user, dannyboy602, countered that Miracle-Gro causes
pot plants to "burn and stress."

In the past, Scotts wouldn't have considered pursuing businesses or
product lines that generated less than $10 million a year in revenue.
But, Mr. Hagedorn said, "We can't operate our business like that anymore."