During the three months ended December 27, 2025, the Company determined that the Hawthorne business met the criteria to be classified as held for sale, and classified the related assets and liabilities as held for sale in the Condensed Consolidated Balance Sheets for all periods presented. The Company determined this represented a strategic shift, and therefore, effective in the first quarter of fiscal 2026, the Company classified its results of operations for all periods presented to reflect the Hawthorne business as a discontinued operation.

On April 8, 2026, the Company completed the sale of its Hawthorne business in North America to Vireo Growth Inc. (“Vireo”) (CSE: VREO; OTCQX: VREOF) in exchange for non-cash consideration with an initial fair value of $97.0, consisting of 213.0 million common shares of Vireo, which represented approximately 14% of Vireo’s total outstanding common shares as of the closing date, and a warrant with a five-year term to acquire 80.0 million additional common shares of Vireo at a strike price of $0.85 per share (collectively, the “Vireo Equity Securities”). The sale proceeds are subject to post-closing adjustments that are expected to be finalized during fiscal 2026. On the closing date, the Hawthorne business held cash and cash equivalents of $35.0 that was transferred to Vireo as part of the sale, which was classified as an investing activity in the “Net cash disposed of on sale of business” line in the Condensed Consolidated Statements of Cash Flows. Additionally, in connection with the transaction, the Company entered into a contract manufacturing agreement and agreed to provide Vireo with up to $20.0 of manufacturing services over a two-year period for no cost. The obligations associated with this agreement have been accrued in the “Other current liabilities” and “Other liabilities” lines in the Condensed Consolidated Balance Sheets.

Pursuant to an agreement executed on April 8, 2026, the Company transferred the sale consideration received to Good Dog Holdings LLC (“GDH”) in exchange for a promissory note. GDH was formed to hold and manage the investments transferred to it by the Company and is owned and controlled by a strategic partner of the Company. GDH granted the Company a call option that enables the Company to reacquire all of the investments held by GDH in exchange for canceling the principal amount of the promissory note. The Company may, subject to certain restrictions, exercise the call option in its sole and absolute discretion until April 8, 2036. The Company also granted GDH a put option providing GDH with the right to cause the Company to reacquire the investments held by GDH in exchange for canceling the principal amount of the promissory note. The Company has determined that it has a variable interest in GDH and that GDH is a variable interest entity. Additionally, based on its assessment of the characteristics of its variable interest in GDH, including the involvement of its de facto agents, the Company has determined it is the primary beneficiary of GDH and, as a result, is required to consolidate GDH in its condensed consolidated financial statements. As of June 27, 2026, the only assets held by GDH were the Vireo Equity Securities, which are recorded in the “Other assets” line in the Condensed Consolidated Balance Sheets, and its only liability was the promissory note due to the Company, which was eliminated in consolidation.

For the nine months ended June 27, 2026, the Company recorded a loss of $101.8 related to the sale of the Hawthorne business in North America. During the three months ended June 27, 2026, the Company recorded a $32.6 reduction to the cumulative pre-tax loss driven by the closing date valuation of the non-cash sale consideration. Income tax expense from discontinued operations was $24.8 for the three months ended June 27, 2026 and includes the impact of a valuation allowance recognized against certain deferred tax assets associated with the former Hawthorne business in Canada.

The following represents the major components of the financial results of the Hawthorne business for each of the periods presented:


	Three Months Ended			Nine Months Ended
		June 27, 2026		June 28, 2025		June 27, 2026		June 28, 2025
Net sales		$	1.7	$	31.2	$	51.2	$	115.9
Cost of sales		0.6		(24.1)		(37.1)		(91.0)
Cost of sales — impairment, restructuring and other		(0.8)		(1.8)		(0.8)		(7.5)
Selling, general and administrative		—		(8.5)		(10.4)		(30.3)
Impairment, restructuring and other		(0.7)		(3.5)		(5.2)		(3.7)
Other income (expense), net		—		(0.5)		—		(0.5)
Income (loss) from discontinued operations before income taxes		0.8		(7.2)		(2.3)		(17.1)
(Loss) on sale of business		32.6		—		(101.8)		—
Income tax (expense) benefit from discontinued operations		(24.8)		1.6		10.8		4.8
Income (loss) from discontinued operations, net of tax		$	8.6	$	(5.6)	$	(93.3)	$	(12.3)


	June 28, 2025		September 30, 2025

Cash and cash equivalents	$	11.6	$	3.8
Accounts receivable, net	28.1		26.1
Inventories	58.9		50.1
Prepaid and other current assets	10.0		4.8
Property, plant and equipment, net	28.5		24.0
Intangible assets, net	57.0		49.8
Other assets	20.2		18.1

Total assets held for sale	$	214.3	$	176.7

Accounts payable	$	15.4	$	7.8
Other current liabilities	20.8		16.5

Other liabilities	11.6		9.6
Total liabilities held for sale	$	47.8	$	33.9

The Condensed Consolidated Statements of Cash Flows do not present the cash flows from discontinued operations separately from cash flows from continuing operations. Cash provided by (used in) operating activities related to discontinued operations was not material for the nine months ended June 27, 2026 and June 28, 2025. Cash used in investing activities related to discontinued operations totaled $35.0 for the nine months ended June 27, 2026 and was not material for the nine months ended June 28, 2025.