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 closed on the acquisition of a property in Lakeland,
Florida from an affiliate of Parallel, one of the largest
privately-held multi-state cannabis operators in the U.S. Parallel
is the corporate parent company to Surterra Wellness, its market
leading retail brand in Florida and one of the original licensed
vertical operators in the Sunshine State, which has a rapidly
growing footprint that includes 39 retail dispensaries across the
state and multiple industrial-scale cultivation, production,
kitchen and research facilities.
The purchase price for the property was approximately $19.6
million (excluding transaction costs). Concurrent with the closing
of the purchase, IIP entered into a long-term, triple-net lease
agreement for the property with a subsidiary of Parallel, which
intends to continue to operate the property as a regulated medical
cannabis cultivation and processing facility. The property consists
of approximately 65,000 square feet of industrial and greenhouse
indoor cultivation and production space currently in operation, and
Parallel expects to develop an additional approximately 155,000
square feet, resulting in a total of approximately 220,000 square
feet of industrial and indoor cultivation space. IIP has agreed to
provide reimbursement for this development of up to approximately
$36.8 million; assuming full reimbursement, IIP’s total investment
in the property will be $56.4 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 pleased to expand our relationship with Beau and
Parallel’s strong team of dedicated professionals with this newest
long-term real estate partnership,” said Paul Smithers, President
and Chief Executive Officer of IIP. “With its footprint of 39
operating dispensaries in Florida, Parallel has established a
presence of physical access for patients to the large majority of
Florida residents. We expect the significant enhancements to
Parallel’s Wimauma and Lakeland facilities to drive Parallel’s
continued strong growth and enable them to continue to produce high
quality medical cannabis products for patients throughout Florida,
spanning the range of products now permissible in the state.”
Parallel is one of the largest privately-held multi-state
cannabis operators in the U.S., with leading positions in several
of the largest and fastest-growing markets, including Florida,
Massachusetts, Nevada and Texas. Parallel’s operations include 42
retail dispensaries, a robust portfolio of proprietary consumer
brands and innovative products, and state-of-the-art cultivation,
production and research facilities. Parallel has over 1,600
employees nationwide, and has raised more than $400 million in
capital to date. Parallel’s highly accomplished management team is
led by Chairman and CEO William “Beau” Wrigley, Jr., who previously
served as the Chairman and CEO of global gum and confectionery
leader the Wm. Wrigley Jr. Company, which was acquired by Mars,
Inc. in 2008 for $23 billion.
“We are thrilled to team once again with IIP as our long-term
real estate partner, as we continue to significantly enhance our
production capacity and product diversity in Lakeland to meet the
tremendous demand from Florida patients throughout the state. This
transaction opens up additional significant capital for us to
reinvest in our growth and commercial expansion across our five
markets,” said Beau Wrigley, Jr., Chairman and CEO of Parallel.
“While we have multiple cultivation and production facilities in
Florida, this Lakeland facility stands out as a state of the art
indoor, environmentally controlled facility, which helps us achieve
our goal of consistent, high quality, high yield flower throughout
the year. In addition, Lakeland houses our commercial-grade kitchen
for producing our cannabis edibles to meet our patients’ demand for
more variety of products in the expanding Florida market.”
Florida represents one of the largest and one of the fastest
growing medical-use cannabis markets in the U.S. After authorizing
the sale of flower in 2019, Florida authorities further expanded
its medical cannabis program last month by allowing the sale of
edibles, which is expected to account for an additional $250
million in sales in 2021, according to Marijuana Business Daily.
According to the Florida Office of Medical Marijuana Use (OMMU), as
of September 11, 2020, there were over 410,000 qualified patients
and nearly 2,600 qualified physicians in the medical-use cannabis
program. Including this property, IIP owns three properties in
Florida, comprising approximately 713,000 rentable square feet
(including square footage under development) and representing a
total investment, including commitments to fund future development
and tenant improvements, of approximately $116.9 million.
As of September 21, 2020, IIP owned 63 properties located in
Arizona, California, Colorado, Florida, Illinois, Maryland,
Massachusetts, Michigan, Minnesota, New Jersey, New York, Nevada,
North Dakota, Ohio, Pennsylvania and Virginia, totaling
approximately 4.9 million rentable square feet (including
approximately 1.9 million rentable square feet under
development/redevelopment), which were 99.3% leased (based on
square footage) with a weighted-average remaining lease term of
approximately 16.1 years. As of September 21, 2020, IIP had
invested approximately $877.3 million in the aggregate (excluding
transaction costs) and had committed an additional approximately
$274.2 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 approximately
$10.0 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 tenant at that property may not elect to have IIP disburse
those funds to the tenant 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.
About Parallel
Parallel is one of the largest privately held, vertically
integrated, multi-state cannabis companies in the world with a
mission to pioneer well-being and improve the quality of life
through cannabinoids. 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 partnerships 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, and Float. Parallel operates over 40 retail stores
nationwide, including cultivation and manufacturing sites across
the four states. The Company conducts advanced cannabis science
through Molecular Infusions (Mi), a cannabis-based
biopharmaceutical company, and conducts R&D for new product
development in its facilities in Texas, Massachusetts, Florida, and
Budapest, Hungary. 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.
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 Florida property,
Parallel and the Florida 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/20200921005101/en/
IIP Contact: Catherine Hastings Chief Financial Officer, Chief
Accounting Officer and Treasurer Innovative Industrial Properties,
Inc. (858) 997-3332
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