IIP Commits Additional $31.0 Million for Future
Redevelopment, Extending Lease Term Through 2040
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 entered into an amendment of the lease with PharmaCann Inc.
(PharmaCann) in Hamptonburgh, New York, making available $31.0
million in funding for significant enhancements in production
capacity and additional upgrades at the 127,000 square foot
facility. The lease amendment also adjusted the base rent under the
lease to take into account the additional available funding and
extended the term of the lease agreement. Assuming full payment of
the additional funding, IIP’s total investment in the property will
be $61.0 million. IIP originally acquired the New York property and
entered into a long-term lease with PharmaCann in 2016.
In addition to this facility in New York, IIP owns and leases to
PharmaCann regulated cannabis cultivation and processing facilities
in Illinois, Massachusetts, Ohio and Pennsylvania, comprising a
total of approximately 363,000 square feet. Assuming full
reimbursement of tenant improvements under the leases, IIP’s total
investment in properties leased to PharmaCann is expected to be
$167.5 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.
PharmaCann is a leading multi-state cannabis operator with
licenses in Illinois, Maryland, Massachusetts, New York,
Pennsylvania and Ohio. Founded in 2014 with dispensaries operating
under the brand Verilife, PharmaCann has raised over $200 million
in equity to date, and has over 650 employees.
“We are thrilled to partner once again with PharmaCann in its
expansion of the New York facility, the first property in our
portfolio that now spans 64 properties across 16 states,” said Paul
Smithers, President and Chief Executive Officer of IIP. “Since
2016, we have progressively supported PharmaCann as its go-to
long-term real estate partner, and we are excited to take this next
step with the PharmaCann team to significantly upgrade and enhance
production capability at their New York facility, in a market
experiencing tremendous and growing patient demand for high quality
products.”
“IIP has been a strong, reliable, flexible real estate partner
since we initially sold and leased back our New York property to
them in 2016,” said Brett Novey, PharmaCann’s Chief Executive
Officer. “The New York regulated cannabis market is still in its
early stages, and in conjunction with IIP’s unwavering support as
our primary real estate capital provider, we expect the significant
enhancements to our New York facility to preserve our strategic
positioning as we continue to scale our operations to meet the
anticipated demand for customers throughout the state.”
According to BDS Analytics, medical cannabis sales in the New
York market totaled approximately $77 million in 2019 and are
expected to grow to over $150 million in 2020 and to nearly $250
million by 2021. As of December 11, 2020, there were over 3,000
registered practitioners and over 130,000 certified patients in the
program. In addition, Governor Cuomo continues to express support
for the introduction of a regulated adult-use cannabis program in
New York, having included this program initiative in the past two
budget proposals. It is expected that Governor Cuomo will include
this proposal again in the January 2021 budget, driven in part to
assist in addressing the state’s budget deficit stemming from the
ongoing pandemic.
As of December 14, 2020, IIP owned 64 properties located in
Arizona, California, Colorado, Florida, Illinois, Maryland,
Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New York,
North Dakota, Ohio, Pennsylvania and Virginia, totaling
approximately 5.2 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 16.5 years. As of December 14, 2020, IIP had invested
approximately $972.4 million in the aggregate (excluding
transaction costs) and had committed 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 lease amendment of the New
York property, PharmaCann and the New York 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.
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version on businesswire.com: https://www.businesswire.com/news/home/20201214005794/en/
Catherine Hastings Chief Financial Officer, Chief Accounting
Officer and Treasurer Innovative Industrial Properties, Inc. (858)
997-3332
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