Leading REIT for the Medical-Use Cannabis
Industry Expands Portfolio to 55 Properties Comprising
Approximately 4.1 Million Square Feet in 15 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 acquisition of a property in Michigan, which
comprises approximately 115,000 square feet of industrial space in
the aggregate.
The purchase price for the property was $5.0 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 wholly owned subsidiary of Cresco Labs Inc.
(Cresco), which intends to operate the property as a regulated
cannabis cultivation and processing facility upon completion of
redevelopment. Cresco is expected to complete additional tenant
improvements for the property, for which IIP has agreed to provide
reimbursement of up to $11.0 million. Assuming full reimbursement
for the tenant improvements, IIP’s total investment in the property
will be $16.0 million.
This sale-leaseback transaction mark IIP’s fourth acquisition
and lease with Cresco, with prior IIP acquisitions and leases for
three of Cresco’s licensed cannabis cultivation and processing
facilities in Illinois and Ohio.
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.
“Cresco has emerged as one of the best-in-class multistate
cannabis operators in the United States. We are thrilled to support
their continued progress through our fourth real estate transaction
with them,” said Paul Smithers, President and Chief Executive
Officer of IIP. “Through this difficult time, Cresco continues its
absolute commitment to serving its patients and customers, while
continuing to provide strong support to the local communities where
they operate, including Cresco’s recent announcements to hire 250
new full-time positions at its Sunnyside dispensaries in Illinois,
with a focus on recently displaced hospitality and restaurant
workers, the development of an essential pay program for its
frontline team members, and partnerships with local restaurants to
provide much-needed economic support for these local owners.”
Founded in 2013, Cresco is one of the largest
vertically-integrated cannabis companies in the United States, with
licensed operations in eleven states. With its pending
acquisitions, Cresco has 18 licensed cannabis production
facilities, 31 retail cannabis licenses and 21 operational cannabis
dispensaries. Employing a consumer-packaged goods (“CPG”) approach
to cannabis, Cresco’s house of brands is designed to meet the needs
of all consumer segments and includes some of the most recognized
and trusted national brands including Cresco, Remedi and Mindy’s, a
line of edibles created by James Beard Award-winning chef Mindy
Segal. Sunnyside*, Cresco’s national dispensary brand, is a
wellness-focused retailer designed to build trust, education and
convenience for both existing and new cannabis consumers.
“Our partnership with IIP has unlocked tremendous value from our
real estate portfolio. We’ve been able to fund the continued growth
of our cultivation footprint, without diluting our shareholders,”
said Charlie Bachtell, Cresco Labs' CEO and Co-founder. “This
transaction allows us to introduce our popular inhouse brands into
Michigan in a capital-light manner. We are continuing our track
record of execution on our stated strategy of focusing on the
middle two verticals, brands and wholesale, in high-potential
markets.”
Similar to other states during this coronavirus health crisis,
Michigan authorities ordered all businesses that are not offering
essential services to close operations for a period of time.
However, by executive order, cannabis dispensaries are permitted to
continue selling both adult-use and medical-use cannabis products,
by either curbside pickup or delivery. In support of cannabis being
deemed an “essential” business and remaining open during this time
of crisis, Michigan Cannabis Industry Association Executive
Director Robin Schneider wrote that many patients with cancer,
AIDS, chronic pain, seizures and pediatric patients have reduced or
replaced pharmaceuticals, including opiates, with medical cannabis,
and that, more than ever, these patients need continued to access
to medical cannabis, and that losing access to medical cannabis for
these patients would force them back to seeking traditional
prescriptions, when the medical system needs to be available to
prioritize the coronavirus pandemic.
As of April 22, 2020, IIP owned 55 properties located in
Arizona, California, Colorado, Florida, Illinois, Maryland,
Massachusetts, Michigan, Minnesota, New York, Nevada, North Dakota,
Ohio, Pennsylvania and Virginia, totaling approximately 4.1 million
rentable square feet (including approximately 1.4 million rentable
square feet under development/redevelopment), which were 99.1%
leased (based on square footage) with a weighted-average remaining
lease term of approximately 16.0 years. As of April 22, 2020, IIP
had invested approximately $716.0 million in the aggregate
(excluding transaction costs) and had committed an additional
approximately $146.8 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 $10.7 million that may be funded in the future
pursuant to IIP’s lease with a tenant at one of IIP’s Illinois
properties, or approximately $23.8 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 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 lease of the Michigan
property, Cresco, the Michigan regulated cannabis market and
Cresco’s completion of tenant improvements, 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.
About Cresco Labs
Cresco Labs is one of the largest vertically-integrated
multi-state cannabis operators in the United States. Cresco is
built to become the most important company in the cannabis industry
by combining the most strategic geographic footprint with one of
the leading distribution platforms in North America. Employing a
consumer-packaged goods (“CPG”) approach to cannabis, Cresco’s
house of brands is designed to meet the needs of all consumer
segments and includes some of the most recognized and trusted
national brands including Cresco, Remedi and Mindy’s, a line of
edibles created by James Beard Award-winning chef Mindy Segal.
Sunnyside*, Cresco’s national dispensary brand, is a
wellness-focused retailer designed to build trust, education and
convenience for both existing and new cannabis consumers.
Recognizing that the cannabis industry is poised to become one of
the leading job creators in the country, Cresco has launched the
industry’s first national comprehensive Social Equity and
Educational Development (SEED) initiative designed to ensure that
all members of society have the skills, knowledge and opportunity
to work in and own businesses in the cannabis industry. Learn more
about Cresco Labs at www.crescolabs.com.
Cresco Forward-Looking
Statements
This press release contains “forward-looking information” within
the meaning of applicable Canadian securities legislation and may
also contain statements that may constitute "forward-looking
statements" within the meaning of the safe harbor provisions of the
United States Private Securities Litigation Reform Act of 1995.
Such forward-looking information and forward-looking statements are
not representative of historical facts or information or current
condition, but instead represent only Cresco's beliefs regarding
future events, plans or objectives, many of which, by their nature,
are inherently uncertain and outside of Cresco's control.
Generally, such forward-looking information or forward-looking
statements can be identified by the use of forward-looking
terminology such as, ‘may,’ ‘will,’ ‘should,’ ‘could,’ ‘would,’
‘expects,’ ‘plans,’ ‘anticipates,’ ‘believes,’ ‘estimates,’
‘projects,’ ‘predicts,’ ‘potential’ or ‘continue’ or the negative
of those forms or other comparable terms. Cresco’s forward-looking
statements involve known and unknown risks, uncertainties and other
factors which may cause Cresco’s actual results, performance or
achievements to be materially different from any future results,
performance or achievements expressed or implied by the
forward-looking statements, including but not limited to those
risks discussed under "Risk Factors" in Cresco’s CSE Listing
Statement filed with SEDAR; and other factors, many of which are
beyond the control of Cresco. Readers are cautioned that the
foregoing list of factors is not exhaustive. Because of these
uncertainties, you should not place undue reliance on Cresco’s
forward-looking statements. No assurances are given as to the
future trading price or trading volumes of Cresco’s shares, nor as
to Cresco’s financial performance in future financial periods.
Cresco does not intend to update any of these factors or to
publicly announce the result of any revisions to any of Cresco’s
forward-looking statements contained herein, whether as a result of
new information, any future event or otherwise. Except as otherwise
indicated, this press release speaks as of the date hereof. The
distribution of this press release does not imply that there has
been no change in the affairs of Cresco after the date hereof or
create any duty or commitment to update or supplement any
information provided in this press release or otherwise.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200422005989/en/
IIP Contact: Catherine Hastings Chief Financial Officer, Chief
Accounting Officer and Treasurer Innovative Industrial Properties,
Inc. (858) 997-3332
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