IIP Expands Portfolio to 66 Properties
Comprising 5.4 Million Square Feet in 17 States
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 acquisitions of a property in Georgetown,
Massachusetts and a property in Olympia, Washington, which
collectively comprise approximately 181,000 square feet of
industrial space.
The purchase prices for the properties were $33.0 million in
total (excluding transaction costs). Concurrent with the closings
of the purchases, IIP entered into a long-term, triple-net lease
agreement for each property with a subsidiary of 4Front Ventures
Corp. (CSE: FFNT) (OTCQX: FFNTF) (4Front), which intends to
continue to operate the Massachusetts property as a regulated
cannabis cultivation, processing and dispensing facility and to
sublease the Washington property to a cannabis license holder for
continued use as a cannabis cultivation and processing
facility.
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 welcome 4Front to our premier tenant roster,”
said Paul Smithers, President and Chief Executive Officer of IIP.
“4Front has developed a strong footprint in their core operating
markets, with a proven ability to execute and deliver a wide
variety of high-quality, consistent cannabis products on a large
scale. We look forward to continuing to support 4Front as they
deepen their operations and strategic relationships in existing
states and expand into new ones like California.”
4Front is a national multi-state cannabis operator and retailer,
with a market advantage in mass-produced, low-cost quality branded
cannabis products. 4Front manufactures, licenses and distributes a
portfolio of over 25 cannabis brands including Marmas, Crystal
Clear, Funky Monkey, Pebbles, and the Pure Ratios wellness
collection, distributed through retail outlets and their chain of
strategically positioned Mission branded dispensaries.
Headquartered in Phoenix, Arizona, 4Front has operations in
Illinois, Massachusetts, California and Michigan and leases
property and provides services to cannabis license holders in
Washington state that manufacture and distribute these
products.
“We are thrilled to enter into this new long-term real estate
partnership with IIP,” said Leo Gontmakher, Chief Executive Officer
of 4Front. “These sale-leaseback transactions further enhance our
balance sheet with non-dilutive capital, while allowing us to
retain full operational control of our key production facilities in
Massachusetts. It also allows us to continue to provide top-notch
services to our tenants in Washington, and supplies us with the
efficient funding for our targeted growth plans.”
Massachusetts, with approximately 6.9 million residents,
approved cannabis for medical-use by popular vote in 2012, with
first sales in 2014. The Commonwealth launched its adult-use
cannabis program in 2018, with first sales in November of that
year. Adult-use cannabis sales have exceeded $630 million in 2020
year-to-date and $1.0 billion in the two years since first sales
began, and annual total regulated cannabis sales are expected to
reach $1.5 billion by 2025, according to BDS Analytics. Similar to
other states during this coronavirus health crisis, Massachusetts
authorities ordered all businesses that are not offering essential
services to close operations for a period of time. However, the
Massachusetts Cannabis Control Commission deemed Medical Marijuana
Treatment Centers and Certifying Health Care Providers as essential
services that were permitted to remain open during this time. The
adult-use cannabis program was required to close for approximately
two months, but reopened in late May.
Washington, with approximately 7.7 million residents, approved
cannabis for medical-use in 1998 and cannabis for adult-use in
2012, with first adult-use sales in mid-2014. According to BDS
Analytics, regulated adult-use sales of cannabis topped $1.0
billion in 2019, and are expected to grow to approximately $1.3
billion by 2025. Marijuana Business Daily also estimates the total
number of in-state patients and consumers to be between 1.5 million
and 1.8 million residents. Cannabis businesses were also considered
essential in the state of Washington during the coronavirus
pandemic, with restrictions and operating protocols designed to
protect the health and safety of customers and workers, in addition
to relaxing protocols surrounding curbside pickup.
As of December 17, 2020, IIP owned 66 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 5.4 million rentable square feet (including
approximately 2.0 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 16.6 years. As of December 17, 2020, IIP had
committed approximately $1.3 billion by investing approximately
$1.0 billion in the aggregate (excluding transaction costs) and
committing an additional approximately $298.1 million to reimburse
certain tenants and sellers for completion of construction and
tenant improvements at IIP’s properties. These statistics 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 leases of the Massachusetts
and Washington properties, 4Front and the Massachusetts and
Washington regulated cannabis markets, 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/20201217006161/en/
IIP Contact: Catherine Hastings Chief Financial Officer, Chief
Accounting Officer and Treasurer Innovative Industrial Properties,
Inc. (858) 997-3332
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