This is the fifth in a string of deals that Cresco Labs and IIP have worked on in states like Michigan, Illinois and Ohio. Earlier this month, IIP noted that it had also entered into amendments to its leases with Cresco at one of IIP’s Michigan and one of IIP’s Ohio properties, making available an additional $17.0 million in funding for additional improvements of their cannabis cultivation and processing facilities at the properties.
“We are thrilled to partner with IIP on our fifth lease with them. They have been reliable partners and a consistent source of non-dilutive capital that has allowed us to expand our capacity and go deep in our strategic markets,” said Cresco Labs CEO and Co-founder Charlie Bachtell.
According to the statement, the lease amendments also adjusted the base rent under the leases to take into account the additional available funding. Assuming full payment of the additional funding, IIP’s total investment in the Michigan property, which comprises 115,000 square feet of industrial space, will be $32.0 million, and IIP’s total investment in the Ohio property, which comprises 50,000 square feet of industrial space, will be approximately $13.5 million.
IIP Building Cannabis Real Estate Empire
At this point, IIP now has 58 properties located in Arizona, California, Colorado, Florida, Illinois, Maryland, Massachusetts, Michigan, Minnesota, New York, Nevada, North Dakota, Ohio, Pennsylvania and Virginia, totaling approximately 4.4 million rentable square feet (including approximately 1.4 million rentable square feet under development/redevelopment). These buildings are 99.2% leased (based on square footage) with a weighted-average remaining lease term of approximately 16.2 years.
According to the company statement, IIP has invested approximately $791.3 million in the aggregate (excluding transaction costs) and had committed an additional approximately $190.8 million to reimburse certain tenants and sellers for completion of construction and tenant improvements at IIP’s properties. The company said that these statistics do not include up to approximately $7.0 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 $19.7 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 being in receivership and its ongoing default in its obligation to pay rent at that location.