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 entered into an amendment of the lease with a subsidiary of
Green Leaf Medical, LLC (Green Leaf) at 135 Horton Drive in Saxton,
Pennsylvania, making available $30.0 million in funding for
additional expansion of their cannabis cultivation and processing
facilities at the property. The lease amendment also adjusted the
base rent under the lease to take into account the additional
available funding and extended the term of the lease agreement.
Assuming full payment of the additional funding, IIP’s total
investment in the property will be $43.0 million.
IIP acquired the property in a sale-leaseback transaction with
Green Leaf in May of last year, which comprises two buildings
totaling approximately 266,000 square feet of industrial space.
Green Leaf previously redeveloped approximately 103,000 square feet
of the industrial space for medical-use cannabis cultivation and
processing, and this funding is expected to include the build-out
of the remaining 163,000 square feet of industrial space.
IIP also owns and leases to Green Leaf an 82,000 square foot
medical-use cannabis cultivation, processing and dispensing
facility in Richmond, Virginia, which IIP acquired earlier this
year.
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 thrilled to expand our real estate partnership once
again with Green Leaf, providing them the capital for this key
expansion at their mission-critical facility in Saxton,” said Paul
Smithers, President and Chief Executive Officer of IIP. “Green Leaf
has always taken a thoughtful, long-term view toward expansion, and
this second phase is expected to dramatically increase production
capacity at the Saxton facility, with an eye toward meeting demand
in one of the strongest medical cannabis markets in the United
States.”
Green Leaf, known for its brand gLeaf, operates medical cannabis
cultivation, extraction and retail operations in four contiguous
states in the mid-Atlantic region, including Maryland,
Pennsylvania, Ohio and Virginia, with pending vertical applications
in New Jersey and West Virginia. According to Green Leaf, the
company has raised approximately $27 million from the sale of
equity to build its multi-state operation and has generated
positive EBITDA since 2018. In April of this year, Green Leaf
announced a new debt financing transaction with Chicago Atlantic
Group, raising $10 million to fund the acquisition of additional
dispensaries in Virginia and Pennsylvania. Green Leaf has one of 25
medical cannabis cultivation/processor licenses issued by the state
of Pennsylvania.
“We appreciate the continued strong support of IIP as our
long-term real estate capital partner, and look forward to
expanding capacity at our Saxton facility, which provides the
enhanced infrastructure elements that are key to growing the
highest quality, consistent cannabis products for our patients,”
said Philip Goldberg, Chief Executive Officer of Green Leaf.
With first sales in 2018, the Pennsylvania medical cannabis
market has grown significantly, and according to the Pennsylvania
Department of Health’s report dated May 15, 2020, over 300,000
patient certifications have been issued by approved practitioners
since the program began. Similar to other states, Pennsylvania has
expanded its program over time, adding several new medical
conditions eligible for treatment with medical cannabis, including,
among others, anxiety disorders and Tourette Syndrome. In addition,
according to an April 2020 study by Harper Polling, over 60% of
Pennsylvanians support legalizing adult-use cannabis in the state,
with strong levels of support throughout the political spectrum.
Multiple bills to legalize adult-use cannabis are pending in
Pennsylvania’s legislature.
As of June 22, 2020, IIP owned 57 properties located in Arizona,
California, Colorado, Florida, Illinois, Maryland, Massachusetts,
Michigan, Minnesota, New York, Nevada, North Dakota, Ohio,
Pennsylvania and Virginia, totaling approximately 4.3 million
rentable square feet (including approximately 1.3 million rentable
square feet under development/redevelopment), which were 99.2%
leased (based on square footage) with a weighted-average remaining
lease term of approximately 16.1 years. As of June 22, 2020, IIP
had invested approximately $780.5 million in the aggregate
(excluding transaction costs) and had committed an additional
approximately $172.9 million to reimburse certain tenants and
sellers for completion of construction and tenant improvements at
IIP’s properties. These statistics do not include up to $7.0
million that may be funded in the future pursuant to IIP’s lease
with a tenant at one of IIP’s Illinois properties, or approximately
$19.7 million that may be funded in the future pursuant to IIP’s
lease with a tenant at one of IIP’s Massachusetts properties, as
the tenants at those properties may not elect to have IIP disburse
those funds to them and pay IIP the corresponding base rent on
those funds. These statistics also treat IIP’s Los Angeles,
California property as not leased, due to the tenant being in
receivership and its ongoing default in its obligation to pay rent
at that location.
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.
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 Pennsylvania
property, Green Leaf and the Pennsylvania 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/20200622005127/en/
IIP Contact: Catherine Hastings Chief Financial Officer, Chief
Accounting Officer and Treasurer Innovative Industrial Properties,
Inc. (858) 997-3332
Green Leaf Contact: Philip Goldberg Chief Executive Officer
(800) 508-7391
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