It’s been a busy seven months for indoor farming equipment maker and distributor Hydrofarm. Early this year, Hydrofarm shifted its headquarters to its Philadelphia-area distribution center. It’s one of nine totaling 900,000 square feet that the 4-decade-old company operates in the U.S., Canada, and Spain. Hydrofarm also has offices in China.
Hydrofarm had planned to relocate its headquarters from Petaluma to the 250,000-square-foot Victory Station warehouse south of Sonoma, but that deal didn’t materialize amid the rapid cooling of demand for real estate from the newly legal cannabis industry.
The product line expanded to energy-efficient grow lights and germination kits. Then Hydrofarm moved into manufacturing and distributing indoor gardening equipment for both professional growers and hobbyists. Today, key markets are growers of cannabis, flowers, fruits, plants, vegetables, grains, and herbs. The portfolio now includes 26 internally developed, proprietary brands with about 900 product variations under 24 patents and 60 registered trademarks. The company also has over 40 exclusive and preferred brands totaling another 900 stock-keeping units.
“Our revenue mix continues to shift towards proprietary brands as we continue to innovate, improving overall margins,” the annual report said. “Further, our revenue stream is highly consistent as, in our estimation, we believe that approximately two-thirds of our net sales are generated from the sale of recurring consumable products including growing media, nutrients and supplies.”
“We also intend to relocate our existing distribution operations in Northern California from the existing Petaluma building to a larger distribution center in the surrounding area,“ the company wrote in its annual report.
2017 is when Hydrofarm made a big expansion into Canada with the acquisition of Eddi’s Wholesale and Greenstar Plant Products. That deal helped Hydrofarm become a top supplier of hydroponics gear in Canada, the company said.
This year, Hydrofarm has acquired three more companies. Los Angeles-area premium nutrient maker Heavy 16 was picked up for $78.1 million, and Humboldt County’s House & Garden portfolio of brands for $125 million. A $161 million deal was announced this month for Aurora International Inc. and Gotham Properties LLC, Oregon-based manufacturers and suppliers of organic hydroponic products.
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