IIP Funds Additional $55.0 Million for a New
152,000-Square-Foot Industrial Facility
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 Green Thumb
Industries Inc. (Green Thumb) (CSE: GTII; OTCQX: GTBIF), a leading
national cannabis consumer packaged goods company and owner of RISE
dispensaries. The lease amendment in Danville, Pennsylvania,
provided $55.0 million in reimbursement to Green Thumb for the
recently completed development of a 152,000-square-foot industrial
building for cultivation and processing, in addition to a new
electric substation on the property to enhance electrical load
capacity. The lease amendment also adjusted the base rent under the
lease to take into account the additional available funding for the
development. IIP funded in full the reimbursement, making IIP’s
total investment in the 300,000-square-foot property $94.6 million.
This lease amendment was made pursuant to the exercise of an option
by Green Thumb for IIP to provide reimbursement of these
improvements, with this option originally included in a lease
amendment executed in 2021.
“We are grateful for the continued partnership with IIP at our
Danville facility,” said Green Thumb Founder and Chief Executive
Officer Ben Kovler. ”Having negotiated the lease and terms last
year, we are pleased to have waited to draw the remaining funds
until now when the facility is complete. We are excited about the
future of cannabis in Pennsylvania.”
Details of the IIP Pennsylvania property are as follows:
- IIP originally acquired the property for $20.3 million and
entered into a long-term lease with Green Thumb in 2019 and under
the lease made available $19.3 million for qualifying improvements
to the property. At the time, the facility consisted of
approximately 148,000-square-feet of industrial space, about half
of which was operational.
- Improvements included build-out of the remainder of the
facility, consisting of new grow rooms, production rooms,
processing rooms and the construction of additional mezzanine space
to house new mechanical, plumbing and electrical
infrastructure.
- IIP’s $55.0 million additional capital commitment was utilized
as reimbursement to Green Thumb for costs incurred in the ground-up
development of an additional approximately 152,000-square-foot
indoor cultivation and processing facility.
- Eligible direct costs for the project for which IIP reimbursed
Green Thumb included site planning and preparation, base building
construction and the enhanced HVAC, electrical, mechanical,
fertigation and other building systems required for indoor cannabis
cultivation and processing, in addition to the construction of the
new electrical substation located on the property.
- The new facility contains flower rooms, veg rooms, mother
rooms, dry rooms, processing, storage, office and supporting
spaces.
In addition to this facility in Pennsylvania, IIP owns and
leases two regulated cannabis cultivation and processing facilities
in Illinois and Ohio to Green Thumb, comprising a total of
approximately 606,000 square feet. IIP’s total investment in
properties leased to Green Thumb is approximately $176.8 million.
Green Thumb is IIP’s fourth largest tenant partner in terms of
capital investment.
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.
“We are proud to have supported Green Thumb as their long-term
real estate partner since 2019,” said Paul Smithers, IIP’s
President and Chief Executive Officer. “Since that time, Green
Thumb has grown from $216 million in revenues in 2019 to nearly
$900 million in revenues in 2021, demonstrating the strength of
Green Thumb’s operational footprint and their ability to execute
and produce high quality products for patients and customers at
scale throughout the United States.”
Medical-use cannabis dispensaries in Pennsylvania made their
first sales in 2018; as of March 2022, the Pennsylvania Department
of Health reported that over 740,000 patients and caregivers had
been registered for the state’s medical cannabis program. Marijuana
Business Daily projects regulated medical-use cannabis sales to
reach $1.6 - $2.0 billion for 2022. The current program provides
for the issuance of up to 25 cultivation and processing licenses
and 150 dispensary licenses, in addition to nine clinical
registrant licenses, each of which may have a cultivation and
processing facility and a dispensary. In March 2022, Pennsylvania’s
Senate Law and Justice Committee concluded the last of three
hearings examining issues regarding potential adult-use
legalization, marking the first hearings by a legislative panel on
the issue of adult-use cannabis in the Republican-controlled
Pennsylvania General Assembly. The neighboring states of New York
and New Jersey recently legalized cannabis for adult-use.
As of June 30, 2022, IIP owned 111 properties located in
Arizona, California, Colorado, Florida, Illinois, Maryland,
Massachusetts, Michigan, Minnesota, Missouri, Nevada, New Jersey,
New York, North Dakota, Ohio, Pennsylvania, Texas, Virginia and
Washington, representing a total of approximately 8.6 million
rentable square feet (including approximately 2.5 million rentable
square feet under development / redevelopment). As of June 30,
2022, IIP had committed approximately $2.4 billion across its
portfolio, including capital invested to date (excluding
transaction costs) and additional capital commitments to fund
future construction and improvements at IIP’s properties. These
statistics do not include an $18.5 million loan from IIP to a
developer for construction of a regulated cannabis cultivation and
processing facility in California.
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 Inc. (“Green Thumb”), a national cannabis
consumer packaged goods company and retailer, promotes well-being
through the power of cannabis while giving back to the communities
in which it serves. Green Thumb manufactures and distributes a
portfolio of branded cannabis products including Beboe, Dogwalkers,
Doctor Solomon’s, Good Green, incredibles and RYTHM. The company
also owns and operates rapidly growing national retail cannabis
stores called RISE. Headquartered in Chicago, Illinois, Green Thumb
has 17 manufacturing facilities, 77 open retail locations and
operations across 15 U.S. markets. Established in 2014, Green Thumb
employs approximately 4,000 people and serves millions of patients
and customers each year. The company was named to Crain’s Chicago
Business, Fast 50 list in 2021 and 2022 and a Best Workplace by MG
Retailer magazine in 2018, 2019 and 2021. 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, Green Thumb 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.
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version on businesswire.com: https://www.businesswire.com/news/home/20220630005051/en/
Catherine Hastings Chief Financial Officer Innovative Industrial
Properties, Inc. (858) 997-3332
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