In 1978 two men, Mr. Jim Hodges and Mr. David Gress, determined that there was a need for a wholesale nursery to supply a more unusual line of plants than was commonly available at the time. Both men were directors of Santa Barbara Beautiful, an organization dedicated to the beautification of public spaces in Santa Barbara. Mr. Gress was the arborist for the City of Santa Barbara and had found that many of the trees that the city wished to plant were unavailable. Mr. Hodges was a retired businessman with an interest in horticulture who had dreamed of one day owning his own nursery.

The two men decided to form their own nursery to supply quality plant material which was not readily available in the nursery trade. In 1979 they found a suitable site for the nursery on the eastern edge of the Goleta Valley. The original 6 acre site had an existing greenhouse that had been used for the production of certified citrus and avocado trees. The new nursery was named San Marcos Growers in reference to its location on the historic stagecoach route, which is now San Marcos Road. Shortly after the land was purchased, Jim Hodges passed away but his wife, Marcia, decided to fulfill Jim's dream and develop the nursery as planned.

In 1981 Randy Baldwin was hired as Production Manager and to oversee the plant introduction program and 27 acres across from the original nursery were acquired for future nursery expansion. The acreage required by the nursery increased as its market expanded, so in 1985 San Marcos Growers moved its office to a larger building on the east side of San Marcos Rd. and increased the area under production up to 15 acres. As awareness of the nursery's unique product mix increased and its emphasis on drought resistant plant material was realized, it was apparent that more area would be needed for nursery production and propagation stock gardens. In 1987 an additional 6 acres of land for container production and a large propagation and demonstration garden was developed in the area to the east of the office complex. In 1992 nearly an acre of land was planted out with New Zealand Flax for cut foliage production and propagation stock. Currently there are 20 acres in nursery production with an additional 2 acres dedicated to cutting and demonstration gardens.

San Marcos Growers recognizes that it plays an important role in the introduction of new plant material into the California nursery trade. The nursery belongs to numerous Botanic Garden Associations, both here and abroad, and has nursery contacts throughout the world. Representatives from the nursery are active in trade and professional organizations such as the California Association of Nurseries and Garden Centers, California Landscape Contractors Association, International Plant Propagators Society and the Cactus and Succulent Society of America.