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 processing facility in Toledo, Ohio.
The purchase price for the property was $2.9 million (excluding
transaction costs). GTI is also expected to make certain
improvements to the property, for which IIP has agreed to provide
reimbursement of up to $4.3 million. Assuming full reimbursement
for such improvements, IIP’s total investment in the property will
be $7.2 million.
This sale-leaseback transaction mark IIP’s second acquisition
and lease with GTI, with a prior sale-leaseback transaction for
GTI’s licensed medical cannabis cultivation and processing facility
in Pennsylvania completed in November of last 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.
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. In addition to its
cultivation and processing licenses, GTI currently operates four
Rise™ medical cannabis dispensaries in Ohio, with locations in
Cleveland, Lakewood, Lorain and Toledo.
Medical-use cannabis dispensaries in Ohio made their first sales
in 2019, and as of the end of December, nearly 80,000 patients and
over 8,000 caregivers had been registered for the state’s medical
cannabis program, generating approximately $60 million in its first
year of sales, with 50% of those revenues coming in the last
quarter of 2019. There exists a broad range of qualifying medical
conditions eligible for treatment under Ohio’s medical cannabis
program, including AIDS / HIV, amyotrophic lateral sclerosis,
Alzheimer’s disease, cancer, chronic traumatic encephalopathy,
Crohn’s disease, epilepsy and other seizure disorders,
fibromyalgia, glaucoma, hepatitis C, inflammatory bowel disease,
multiple sclerosis, pain that is either chronic and severe or
intractable, Parkinson’s disease, post-traumatic stress disorder,
sickle cell anemia, spinal cord disease or injury, Tourette’s
syndrome, traumatic brain injury and ulcerative colitis.
“We are proud to team again with Green Thumb as its real estate
capital partner for GTI’s licensed medical cannabis processing
facility in Ohio, having teamed with GTI on its Pennsylvania
cultivation and processing facility this past November,” said Paul
Smithers, President and Chief Executive Officer of IIP. “GTI
continues to distinguish itself with its cannabis product offerings
and dedication to patient experience and right to well-being,
providing safe, high quality cannabis products in a compassionate
environment. We also commend them on the strength of their
commitment to the communities in which they operate, including
their recent announcement that over 200 social equity applicants
have participated in GTI’s Social Equity Licensing Education
Assistance Program (LEAP), providing pro bono mentoring and
programming for Illinois craft grower, infuser and transporter
licenses.”
“IIP provides a flexible real estate capital solution that
effectively addresses our expansion needs at the processing
facility in Toledo,” said GTI Founder and CEO Ben Kovler. “We plan
to use the proceeds for strategic initiatives and capacity
expansion projects.”
As of February 3, 2020, IIP owned 49 properties located in
Arizona, California, Colorado, Florida, Illinois, Maryland,
Massachusetts, Michigan, Minnesota, New York, Nevada, North Dakota,
Ohio, Pennsylvania and Virginia, totaling approximately 3.2 million
rentable square feet (including approximately 871,000 rentable
square feet under development/redevelopment), which were 98.9%
leased (based on square footage) with a weighted-average remaining
lease term of approximately 15.6 years. As of February 3, 2020, IIP
had invested approximately $538.0 million in the aggregate
(excluding transaction costs) and had committed an additional
approximately $128.5 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 13.2% for these 49 properties, calculated as (a)
the sum of the current base rents, supplemental rent (with respect
to the lease with a tenant 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 $128.5 million). These
statistics do not include up to approximately $15.9 million that
may be funded in the future pursuant to IIP’s lease with a tenant
at one of IIP’s Illinois properties, approximately $35.7 million
that may be funded in the future pursuant to IIP’s lease with a
tenant at one of IIP’s Massachusetts properties, or the additional
$4.0 million which may be requested by a tenant at one of IIP’s
Pennsylvania 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’s default in its obligation to pay rent at that location in
January 2020.
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 Beboe, Dogwalkers, Dr.
Solomon’s, incredibles, Rythm and The Feel Collection. 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 1,400 people and serves
thousands of patients and customers each year. GTI was named a Best
Workplace 2018 by Crain’s Chicago Business and MG Retailer magazine
in 2018 and 2019. More information is available at
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 tenant improvements
at the Ohio property, GTI and the Ohio 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.
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version on businesswire.com: https://www.businesswire.com/news/home/20200203005111/en/
Catherine Hastings Chief Financial Officer, Chief Accounting
Officer and Treasurer Innovative Industrial Properties, Inc. (858)
997-3332
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