Innovative Industrial Properties, Inc. (IIP) (NYSE: IIPR), the
first and only real estate company on the New York Stock Exchange
focused on the regulated U.S. cannabis industry, announced today
that it completed the acquisition of a property in San Marcos,
Texas, and entered into a long-term lease with Surterra San Marcos
LLC (Surterra San Marcos), a subsidiary of Surterra Texas, which is
a subsidiary of Parallel, one of the largest privately-held
multi-state cannabis operators in the United States.
The purchase price for the property was approximately $3.4
million (excluding transaction costs). Surterra San Marcos is
expected to construct three buildings (one retail and two
industrial) comprising an aggregate of approximately 63,000 square
feet on the property, for which IIP has agreed to provide
reimbursement of up to $24.0 million. Assuming full reimbursement
for the construction, IIP’s total investment in the property is
expected to be approximately $27.4 million (excluding transaction
costs). Surterra San Marcos intends to operate the property upon
completion of construction as a licensed cannabis cultivation,
processing and retail facility.
IIP also owns and leases to subsidiaries of Parallel two
regulated cannabis cultivation and processing facilities in
Florida, which, together with the Texas property, comprise a total
of approximately 656,000 square feet. Assuming full reimbursement
for tenant improvements under the leases, IIP’s total investment in
properties leased to Parallel is expected to be approximately
$127.3 million.
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 are excited to continue the expansion of our long-term real
estate partnership with the Parallel team, led by Beau Wrigley, who
exemplify operational excellence as well as demonstrated strategic
leadership within the industry,” said Paul Smithers, President and
Chief Executive Officer of IIP. “Parallel has developed tremendous
footprints in their operating markets as they continue to expand
access to their proprietary cannabis products and support
communities across multiple states. We look forward to partnering
with them in Texas on the development of a state-of-the-art
cannabis cultivation, production and retail facility. While the
Texas licensed medical cannabis program is limited today, we are
encouraged that the 2021 Texas legislature may potentially expand
the program meaningfully for the residents of Texas.”
“We believe that Texas will be a significant cannabis market and
our collaboration with Innovative Industrial Properties will enable
us to build a cultivation and production facility that will help us
advance our mission to improve well-being through cannabinoids,”
said Beau Wrigley, Jr., Chairman and CEO of Parallel. “IIP has
proven to be a consistently valuable business partner and we
appreciate their dedication to excellent service and overall
understanding of the complex needs of the cannabis industry.”
Texas, the second most populous state with nearly 30 million
residents, passed the Texas Compassionate Use Program in 2015,
which is currently a limited program providing medical cannabis to
qualifying patients. The program currently provides for a limited
set of qualifying medical conditions, including epilepsy and
seizure disorders, multiple sclerosis, spasticity, terminal cancer,
incurable neurological disorders, autism and ALS. There are
currently three vertically-licensed operators in the state,
including Surterra Texas. According to a recent University of
Texas/Texas Tribune Poll, a large majority of Texas voters support
possession of cannabis for recreational and/or medical use, while
only 13% of respondents said it should not be legal for any use.
Texas lawmakers pre-filed over a dozen pieces of cannabis-related
legislation for consideration in the 2021 legislative session,
including expanding qualifying medical conditions, removing the THC
cap, and decriminalizing cannabis possession, among others.
As of March 11, 2021, IIP owned 68 properties located in
Arizona, California, Colorado, Florida, Illinois, Maryland,
Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New York,
North Dakota, Ohio, Pennsylvania, Texas, Virginia and Washington,
representing a total of approximately 5.9 million rentable square
feet (including approximately 2.1 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 March 11, 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 Parallel
Parallel is one of the largest privately held, vertically
integrated, multi-state cannabis companies in the United States
with a mission to pioneer well-being and improve the quality of
life through cannabinoids. Parallel recently announced that it
intends to become a public company through a definitive business
combination agreement with Ceres Acquisition Corp. (Ceres), (NEO:
CERE.U, CERE.WT; OTCQX: CERAF), a special purpose acquisition
corporation (SPAC). Parallel owns and operates retail dispensaries
in four medical and adult-use markets: Surterra Wellness in Florida
and Texas; New England Treatment Access (NETA) in Massachusetts,
and The Apothecary Shoppe in Nevada. Parallel also has a license
under its Goodblend brand in Pennsylvania for vertically integrated
operations and up to six retail locations, in addition to a medical
cannabis research partnership with the University of Pittsburgh
School of Medicine. The Company has a diverse portfolio of high
quality, proprietary and licensed consumer brands and products
including Surterra Wellness, Coral Reefer, Float and Heights.
Parallel operates approximately 50 locations nationwide, including
42 retail stores, and cultivation and manufacturing sites. Through
its wholly-owned Parallel Biosciences subsidiary, it conducts
advanced cannabis science and R&D for new product development
in its facilities in Massachusetts, Florida, Texas and a facility
in Budapest, Hungary through an exclusive license and partnership.
Parallel follows rigorous operations and business practices to
ensure the quality, safety, consistency and efficacy of its
products and is building its business by following strong values
and putting the well-being of its customers and employees first.
Find more information at www.liveParallel.com, or on Instagram and
LinkedIn.
Additional Information
In connection with the proposed transaction with Ceres, that, if
completed, would result in Parallel becoming a public company
(Transaction), Ceres is expected to file a Form S-4 with the U.S.
Securities Exchange Commission (SEC). Ceres and Parallel urge
investors, stockholders and other interested persons to read, when
available, the Form S-4, preliminary and final non-offering
prospectus, including any amendments thereto, the Ceres special
meeting circular, as well as other documents to be filed with the
SEC and documents to be filed with Canadian securities regulatory
authorities in connection with the Transaction, as these materials
will contain important information about Ceres, Parallel, the
combined public company and the Transaction. Ceres also has, and
will, file other documents regarding the Transaction with the SEC.
Investors and security holders will be able to obtain free copies
of the registration statement and all other relevant documents
filed or that will be filed with the SEC by Ceres through the
website maintained by the SEC at www.sec.gov. In addition, the
documents filed by Ceres may be obtained free of charge from Ceres’
website at www.ceresacquisition.com or by written request to Ceres
at Ceres Acquisition Corp., 1925 Century Park East, Los Angeles,
California, United States 90067.
Parallel Forward-Looking
Statements
Certain information in this press release contains
“forward-looking statements” and “forward-looking information”
within the meaning of applicable Canadian securities legislation
and U.S. securities law (referred to herein as forward-looking
statements), including statements regarding the Transaction and
expected future growth. Except for statements of historical fact,
certain information contained herein constitutes forward-looking
statements, which include, but are not limited to, statements
related to activities, events or developments that Parallel expects
or anticipates will or may occur in the future, statements related
to Parallel’s business strategy objectives and goals, and
Parallel’s management’s assessment of future plans and operations
which are based on current internal expectations, estimates,
projections, assumptions and beliefs, which may prove to be
incorrect. Forward-looking statements can often be identified by
the use of words such as “may”, “will”, “could”, “would”,
“anticipate”, “believe”, “expect”, “intend”, “potential”,
“estimate”, “budget”, “scheduled”, “plans”, “planned”, “forecasts”,
“goals” and similar expressions or the negatives thereof. Such
statements are made pursuant to the safe harbor provisions of the
U.S. Private Securities Litigation Reform Act of 1995 and are based
on Parallel’s management’s belief or interpretation of information
currently available. Forward-looking statements are neither
historical facts nor assurances of future performance.
Forward-looking statements in this press release includes
statements regarding: the Transaction, Parallel’s real estate
expansion strategy and plans to grow its market share in existing
and new markets, including the State of Texas; Parallel’s
investment in new technologies and products; and the development
and expansion of Parallel’s brands. Forward-looking statements are
based on a number of factors and assumptions made by management and
considered reasonable at the time such information is provided, and
forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause the actual results,
performance or achievements to be materially different from those
expressed or implied by the forward-looking statements. There can
be no assurance that the transactions described herein will be
completed or that, if completed, the combined public company will
be successful.
Risk factors that could cause actual results, performance or
achievement to differ materially from those indicated in the
forward-looking statements include, but are not limited to the
following: (i) the risk that the Transaction may not be completed
in a timely manner or at all, which may adversely affect the price
of Ceres’ securities, (ii) the risk that the Transaction may not be
completed by Ceres’ qualifying transaction deadline and the
potential failure to obtain an extension of the qualifying
transaction deadline if sought by Ceres, (iii) the failure to
satisfy the conditions to the consummation of the Transaction,
including the approval of the Transaction by the stockholders of
Ceres and Parallel, as applicable, the satisfaction of the minimum
trust account amount following any redemptions by Ceres’
shareholders and the receipt of certain governmental and regulatory
approvals, (iv) the lack of a third party valuation in determining
whether or not to pursue the proposed Transaction, (v) the
occurrence of any event, change or other circumstance that could
give rise to the termination of the business combination agreement,
(vi) the impact of COVID-19 on Parallel’s business and/or the
ability of the parties to complete the proposed Transaction, (vii)
the effect of the announcement or pendency of the Transaction on
Parallel’s business relationships, performance, and business
generally, (viii) risks that the proposed Transaction disrupts
current plans and operations of Parallel and potential difficulties
in Parallel employee retention as a result of the proposed
Transaction, (ix) the outcome of any legal proceedings that may be
instituted against Parallel or Ceres or their respective,
directors, officers and affiliates related to the proposed
Transaction, (x) the risk that the combined public company’s
securities will not be approved for listing on the NEO Exchange or,
if approved, that the combined public company will be able to
maintain the listing, (xi) the price of Ceres’ and the combined
public company’s securities may be volatile due to a variety of
factors, including changes in the competitive and highly regulated
industries in which Parallel operates, variations in performance
across competitors, changes in laws and regulations affecting
Parallel’s business and changes in the combined capital structure
and a return on securities of the combined public company is not
guaranteed, (xii) the ability to implement business plans,
forecasts, and other expectations after the completion of the
proposed Transaction, and identify and realize additional
opportunities, (xiii) the risk of downturns and the possibility of
rapid change in the highly competitive industry in which Parallel
operates, (xiv) the risk that Parallel and its current and future
collaborators are unable to successfully develop and commercialize
Parallel’s products, brands or services, or experience significant
delays in doing so, (xv) the risk that the combined public company
may never sustain profitability, (xvi) the risk that the combined
public company will need to raise additional capital to execute its
business plan, which may not be available on acceptable terms or at
all, (xvii) the risk that the combined public company experiences
difficulties in managing its growth and expanding operations,
(xviii) the risk that the pharmaceutical industry may attempt to
dominate the cannabis industry , and in particular, legal
marijuana, through the development and distribution of synthetic
products which emulate the effects and treatment of organic
marijuana, (xix) the agricultural risks related to insects, plant
diseases, unstable growing conditions, water and electricity
availability and cost, (xx) the risk that may arise because
cannabis continues to be a controlled substance under the United
States Federal Controlled Substances Act, (xxi) the risk of product
liability or regulatory lawsuits or proceedings relating to
Parallel’s products and services, (xxii) the risk that the combined
public company is unable to secure or protect its intellectual
property, (xxiii) tax risks, including U.S. federal income tax
treatment, (xxiv) risks relating to the reliance of Parallel on key
members of management, (xxv) risks inherent in businesses related
to the agricultural industry, (xxvi) risks relating to potentially
unfavorable publicity or consumer perception, (xxvii) Parallel may
be subject to the risk of competition from synthetic production and
technological advances, (xxviii) investors in the combined public
company and its directors, officers and employees who are not U.S.
citizens may be denied entry into the United States, (xxix) product
recalls, (xxx) results of future clinical research, (xxxi)
difficulty attracting and retaining personnel, (xxxii) fraudulent
or illegal activity by employees, contractors and consultants;
information technology systems and cyber-attacks, (xxxiii) security
breaches, (xxxiv) natural disasters and terrorism risk, (xxxv)
restricted access to banking, (xxxvi) risks related to the lending
facilities, (xxxvii) risks of leverage, (xxxviii) heightened
scrutiny by regulatory authorities, (xxxix) risk of legal,
regulatory or political change, (xl) general regulatory and
licensing risks, (xli) Parallel and the combined public company may
be subject to the risk of changes in Canadian as well as U.S.
federal, state and local laws or regulations, (xlii) limitations on
ownership of licenses, (xliii) Nevada regulatory regime and
transfer and grant of licenses, (xliv) regulatory action and
approvals from the FDA, (xlv) constraints on marketing products,
(xlvi) anti-money laundering laws and regulation, (xlvii) the
combined public company’s status as an “Emerging Growth Company”
under United States securities laws, (xlviii) discretion in the use
of proceeds, (xlix) subsequent offerings will result in dilution to
shareholders of the combined public company, (l) voting control,
and (li) unpredictability caused by capital structure and voting
control. Readers are cautioned that the foregoing list is not
exhaustive.
Parallel undertakes no obligation to update forward-looking
statements if circumstances or management’s estimates or opinions
should change except as required by applicable securities laws.
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 of the Texas property,
Parallel and the Texas 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210311005811/en/
IIP Contact: Catherine Hastings Chief Financial Officer
Innovative Industrial Properties, Inc. 858-997-3332
Parallel Contact: Taylor Foxman Vice President of Communications
and Media Relations Parallel 626-278-3409
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