IIP Expands Portfolio to Over 2.9 Million
Square Feet in 13 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 a sale-leaseback transaction with Green Thumb
Industries Inc. (GTI) (CSE: GTII; OTCQX: GTBIF) for its licensed
cannabis cultivation and processing facility in Danville,
Pennsylvania.
The purchase price for the property was $20.3 million (excluding
transaction costs). GTI is also expected to make certain
improvements to the property that will significantly enhance
production capacity, for which IIP has agreed to provide
reimbursement of up to $19.3 million. Assuming full reimbursement
for such improvements, IIP’s total investment in the property will
be $39.6 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.
GTI is a leading national cannabis consumer packaged goods
company and owner of Rise™ and Essence retail stores. GTI has 13
manufacturing facilities, licenses for 96 retail locations and
operations across twelve U.S. markets.
Medical-use cannabis dispensaries in Pennsylvania made their
first sales in 2018, and as of August 2019, over 180,000 patients
had been registered for the state’s medical cannabis program.
Similar to other medical-use cannabis states, the DOH has expanded
patient access to the program over time, including approving
anxiety disorders and Tourette syndrome over the summer to the
program’s list of medical conditions that qualify for treatment
with medical cannabis. GTI announced the opening of its seventh
Rise™ store in Pennsylvania in September, and currently has
locations opened for patients in Carlisle, Erie, Latrobe,
Mechanicsburg, Steelton and York.
“GTI has distinguished itself as one of the preeminent cannabis
operators in the United States, and we are thrilled to be a trusted
real estate partner for their continued expansion in Pennsylvania
to meet the tremendous patient demand there,” said Paul Smithers,
President and Chief Executive Officer of IIP. “With GTI’s breadth
and depth of cannabis product offerings and dedication to patient
experience and right to well-being, we believe GTI will continue to
make a tremendous and growing impact on thousands of patient
lives.”
“IIP provides a flexible real estate capital solution that
effectively addresses our expansion needs at the cultivation and
processing facility in Danville,” said GTI Founder and Chief
Executive Officer Ben Kovler. “This transaction allows us to
efficiently raise capital. We plan to use the proceeds for
strategic initiatives and capacity expansion projects in
Pennsylvania, a high-growth medical cannabis market.”
As of November 12, 2019, IIP owned 42 properties located in
Arizona, California, Colorado, Florida, Illinois, Maryland,
Massachusetts, Michigan, Minnesota, New York, Nevada, Ohio and
Pennsylvania, totaling approximately 2.9 million rentable square
feet (including approximately 903,000 rentable square feet under
development/redevelopment), which were 100% leased with a
weighted-average remaining lease term of approximately 15.5 years.
As of November 12, 2019, IIP had invested approximately $431.2
million in the aggregate (excluding transaction costs) and had
committed an additional approximately $157.5 million to reimburse
certain tenants and sellers for completion of construction and
tenant improvements at IIP’s properties. IIP’s average current
yield on invested capital is approximately 13.6% for these 42
properties, calculated as (a) the sum of the current base rents,
supplemental rent (with respect to the lease with PharmaCann LLC at
one of IIP’s New York properties) and property management fees
(after the expiration of applicable base rent abatement or deferral
periods), divided by (b) IIP’s aggregate investment in these
properties (excluding transaction costs and including aggregate
potential development/redevelopment funding and tenant
reimbursements of approximately $157.5 million). These statistics
do not include up to $17.7 million that may be funded in the future
pursuant to IIP’s lease with GR Companies Inc. (Grassroots) at one
of IIP’s Illinois properties, $40.0 million that may be funded in
the future pursuant to IIP’s lease with Trulieve Cannabis Corp. at
one of IIP’s Massachusetts properties, the additional $4.0 million
which may be requested by PharmaCann LLC at one of IIP’s
Pennsylvania properties or $2.0 million that may be funded in the
future pursuant to IIP’s lease with Holistic Industries, Inc. 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.
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 Green Thumb Industries
Green Thumb Industries (GTI), a national cannabis consumer
packaged goods company and retailer, is dedicated to providing
dignified access to cannabis while giving back to the communities
in which they serve. GTI manufactures and distributes a portfolio
of branded cannabis products including Rythm, Dogwalkers, The Feel
Collection, incredibles and Beboe, among others. The company also
owns and operates rapidly growing national retail cannabis stores
called Rise™ and Essence. Headquartered in Chicago, Illinois, GTI
has 13 manufacturing facilities, licenses for 96 retail locations
and operations across 12 U.S. markets. Established in 2014, GTI
employs approximately 1,200 people and serves thousands of patients
and customers each year. GTI was named a Best Workplace 2018 by
Crain’s Chicago Business. More information is available at
www.GTIgrows.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 and development of the
Pennsylvania property, GTI 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.
GTI Cautionary Note Regarding
Forward-Looking Information
This press release contains statements which may constitute
“forward-looking information” within the meaning of applicable
securities laws, including statements regarding the plans,
intentions, beliefs and current expectations of GTI with respect to
future business activities. Forward-looking information is often
identified by the words “may,” “would,” “could,” “should,” “will,”
“intend,” “plan,” “anticipate,” “believe,” “estimate,” “expect,” or
similar expressions and include information regarding the future
direction and business objectives of GTI. The forward‐looking
information in this news release is based upon the expectations,
estimates, projections, assumptions and views of future events
which management believes to be reasonable in the circumstances and
expectations relating to general economic and market conditions.
Any forward‐looking information speaks only as of the date on which
it is made, and, except as required by law, GTI does not undertake
any obligation to update or revise any forward‐looking information,
whether as a result of new information, future events or otherwise.
The forward‐looking information in this news release is subject to
a variety of known and unknown risks, uncertainties and other
factors that could cause actual events or results to differ from
those express or implied. When considering these forward‐looking
statements, readers should keep in mind the risk factors and other
cautionary statements in GTI’s public filings with the applicable
securities regulatory authorities on SEDAR at www.sedar.com,
including the risk factors set out in GTI’s annual information form
dated July 10, 2018.
The Canadian Securities Exchange does not accept responsibility
for the adequacy or accuracy of this release.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20191112006037/en/
Company Contact: Catherine Hastings Chief Financial Officer,
Chief Accounting Officer and Treasurer Innovative Industrial
Properties, Inc. (858) 997-3332
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