Innovative Industrial Properties, Inc. (IIP), the first and only
real estate company on the New York Stock Exchange (NYSE: IIPR)
focused on the regulated U.S. cannabis industry, announced today
that it is extending its long-term real estate relationship with
Kings Garden Inc. (Kings Garden), one of California’s top cannabis
producers, with the acquisition of approximately 3.5 acres in
Southern California adjacent to one of IIP’s properties leased to
Kings Garden, where IIP and Kings Garden will partner on the
development of two additional buildings totaling approximately
180,000 square feet of industrial space.
The purchase price for the land was approximately $1.4 million
(excluding transaction costs). Concurrent with the closing of the
purchase, IIP amended its existing lease at the adjacent property
to incorporate this new project, and Kings Garden intends to
operate the two new buildings as licensed cannabis cultivation
facilities upon completion of development. IIP is expected to
provide reimbursement to Kings Garden for the construction of the
two buildings of up to approximately $51.4 million. IIP leases six
properties to Kings Garden, representing approximately 544,000
square feet of industrial space (including space under
development/redevelopment) and a total commitment (including
purchase prices and commitments to fund tenant improvements and
development/redevelopment, but excluding transaction costs) of
approximately $147.7 million.
“Kings Garden is truly a market-leading innovator in the
cannabis industry, and we are thrilled to partner with them once
again to grow their footprint and capacity here in California,”
said Paul Smithers, President and Chief Executive Officer of IIP.
“With state-of-the-art production facilities and a dedicated team
of world-class experts in cannabis growing and processing, Kings
Garden’s future is a very bright one, and we are proud to support
them in their growth as their go-to real estate partner.”
As the pioneering real estate investment trust (REIT) for the
medical-use cannabis industry, IIP partners with experienced
medical-use cannabis operators and serves as a source of capital by
acquiring and leasing back their real estate assets, in addition to
offering other creative real estate-based capital solutions.
“We greatly value the long-term relationship we’ve built with
our industry leading partners at IIP over the past years,” said
Michael King, Chairman and CEO of Kings Garden. “Between the deal
we closed in November 2020 and this one, IIP is expected to provide
reimbursement to Kings Garden for construction for just over $76
million. This is significant as it sets the path to 665,000 square
feet of indoor operations and over $300 million in revenue for
2023. Once all of the facilities are completed, we expect to be
producing approximately 140,000 pounds of finished cannabis product
annually, enabling us to continue to grow our market share in the
single largest regulated cannabis market in the world.”
According to New Frontier Data, California’s regulated cannabis
sales in 2020 were approximately $5.6 billion, more than double the
sales of any other state with a regulated cannabis program, with an
estimated 6.7 million cannabis consumers. With U.S. regulated
cannabis sales expected to reach $41.5 billion in 2025, New
Frontier estimates that California will continue to dominate in
terms of market share at 20% of the total market, constituting $8.2
billion in regulated sales.
“Kings Garden is excited to announce the significant expansion
of our indoor cannabis cultivation operations. We are proud to
maintain our status as the number one indoor flower brand in
California – the largest and most discerning cannabis market in the
world,” said Charlie Kieley, COO of Kings Garden. “Using advanced
technologies and employing best practices, we will increase
operational efficiencies and decrease our carbon footprint while
maintaining the quality we are known for. As we continue to execute
our growth strategy, we will be responsible stewards of the
environment and be thoughtful in the utilization of our
resources.”
As of February 8, 2021, IIP owned 67 properties located in
Arizona, California, Colorado, Florida, Illinois, Maryland,
Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New York,
North Dakota, Ohio, Pennsylvania, Virginia and Washington, totaling
approximately 5.8 million rentable square feet (including
approximately 2.2 million rentable square feet under
development/redevelopment), which were 100% leased with a
weighted-average remaining lease term of approximately 16.7 years.
As of February 8, 2021, IIP had committed approximately $1.4
billion across its portfolio, including capital invested to date
(excluding transaction costs) and additional capital commitments to
fund future construction and tenant improvements at IIP’s
properties.
About Innovative Industrial Properties
Innovative Industrial Properties, Inc. is a self-advised
Maryland corporation focused on the acquisition, ownership and
management of specialized industrial properties leased to
experienced, state-licensed operators for their regulated
medical-use cannabis facilities. Innovative Industrial Properties,
Inc. has elected to be taxed as a real estate investment trust,
commencing with the year ended December 31, 2017. Additional
information is available at
www.innovativeindustrialproperties.com.
About Kings Garden
Based in Coachella Valley, Kings Garden Inc. is California’s
predominant cannabis cultivation, processing and manufacturing
company, specializing in the world of premium grade boutique
products at an unsurpassed commercial scale. Now one of the largest
producers in California, Kings Garden prides itself on having
organized a highly experienced cannabis management and operations
team, while being fully compliant and licensed across the state of
California. From its inception, Kings Garden has held unwavering
values focused on superior quality of end products, its team of
management and employees who are considered family, giving back to
local communities, and the advancement of the cannabis industry as
a whole. For more information visit https://kingsgarden.com/ or
https://www.instagram.com/kingsgarden.ca/.
Innovative Industrial Properties
Forward-Looking Statements
This press release contains statements that IIP believes to be
“forward-looking statements” within the meaning of the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
All statements other than historical facts, including, without
limitation, statements regarding the lease and redevelopment of the
California property, Kings Garden and the California regulated
cannabis market, are forward-looking statements. When used in this
press release, words such as we “expect,” “intend,” “plan,”
“estimate,” “anticipate,” “believe” or “should” or the negative
thereof or similar terminology are generally intended to identify
forward-looking statements. Such forward-looking statements are
subject to risks and uncertainties that could cause actual results
to differ materially from those expressed in, or implied by, such
statements. Investors should not place undue reliance upon
forward-looking statements. IIP disclaims any obligation to update
or revise any forward-looking statements, whether as a result of
new information, future events or otherwise.
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version on businesswire.com: https://www.businesswire.com/news/home/20210208005129/en/
IIP Contact: Catherine Hastings Chief Financial Officer
Innovative Industrial Properties, Inc. (858) 997-3332
Kings Garden Contact: Courtney Greenberg Kings Garden (917)
439-8009
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