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When you sell the MULCH- you sell it for a much higher price than the buying price.

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EDIT: I thought Mulch only appeared in the Avenue as raffle items; in any case, the florist will sell Mulch for 400 each, so if you sell to the Pokemon Breeder at the end of Mistralton City's runway, you will get a 600 mark up for each Mulch.

It also appears as a hidden item in grottos sometimes.

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FALSE! you can buy it at Join avenue
I thought it was a raffle in the Avenue? Lemme check.
There i hid mine. Thanks for fixing it. (this is why I wish I was an editor... sigh)