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 Oglesby,
Illinois.
The purchase price for the property was $9.0 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 $41.0 million. Assuming full reimbursement
for such improvements, IIP’s total investment in the property will
be $50.0 million.
This sale-leaseback transaction marks IIP’s third acquisition
and lease with GTI, with prior sale-leaseback transactions for
GTI’s licensed medical cannabis cultivation and processing facility
in Pennsylvania completed in November 2019 and GTI’s licensed
medical cannabis processing facility in Ohio completed earlier this
year. Assuming full reimbursement of tenant improvements under the
leases, IIP’s total investment in properties leased to GTI is
expected to be approximately $96.8 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. In addition to the
cultivation and processing facility in Oglesby, GTI owns a
cultivation and processing facility in Rock Island and seven stores
throughout Illinois, with licenses to open three additional retail
locations.
Illinois, the 11th state to legalize cannabis for adult-use,
commenced adult-use cannabis sales on January 1 of this year. In
January alone, despite a significant supply shortage at launch, 41
Illinois dispensaries sold 972,045 individual cannabis products in
the first month alone, generating nearly $40 million in sales and
$10 million in tax revenue, according to the Illinois Department of
Financial and Professional Regulation. With this acquisition, IIP
owns six regulated cannabis cultivation and processing facilities
in Illinois, representing a total expected investment of
approximately $182.8 million, which includes commitments by IIP to
fund future tenant improvements and construction at certain
properties, and includes $15.9 million that a tenant at one of
IIP’s Illinois properties may not elect to have IIP disburse those
funds to them.
“We are thrilled to expand our relationship with Green Thumb,
one of the country’s leading regulated cannabis operators,” said
Paul Smithers, President and Chief Executive Officer of IIP. “This
investment enables GTI to significantly expand their consumer
products manufacturing capacity and reflects our belief in their
continued success in serving the growing demand.”
“The highest ROIC in global cannabis today is in wholesale
capacity expansion in our home state of Illinois,” said GTI Founder
and CEO Ben Kovler. “IIP is a proven long-term real estate capital
partner and provides us with another flexible real estate capital
solution that allows us to put our capital to work in the best way
possible. With the introduction of Illinois’ adult-use cannabis
program this year, we continue to ramp up production to meet the
demand from cannabis consumers and patients.”
As of March 6, 2020, IIP owned 52 properties located in Arizona,
California, Colorado, Florida, Illinois, Maryland, Massachusetts,
Michigan, Minnesota, New York, Nevada, North Dakota, Ohio,
Pennsylvania and Virginia, totaling approximately 3.4 million
rentable square feet (including approximately 1.1 million rentable
square feet under development/redevelopment), which were 99.0%
leased (based on square footage) with a weighted-average remaining
lease term of approximately 15.7 years. As of March 6, 2020, IIP
had invested approximately $575.7 million in the aggregate
(excluding transaction costs) and had committed an additional
approximately $160.4 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 52 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 $160.4 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, or the 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, 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 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 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 1,600 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 Illinois property, GTI and the Illinois 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 U.S.
Securities and Exchange Commission at www.sec.gov, including the
risk factors set out in GTI’s registration statement on Form 10, as
amended and the applicable Canadian securities regulatory
authorities on SEDAR at www.sedar.com.
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/20200309005272/en/
Catherine Hastings Chief Financial Officer, Chief Accounting
Officer and Treasurer Innovative Industrial Properties, Inc. (858)
997-3332
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