Innovative Industrial Properties Archives - Green Market Report

StaffStaffJuly 20, 2020
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4min8710

Columbia Care (OTCQX: CCHWF) sold two of its properties in New Jersey for $12.4 million to Innovative Industrial Properties, Inc. (IIP) (NYSE: IIPR). Columbia Care will then rent the two properties which include an industrial building comprising approximately 50,000 square feet and a retail location comprising approximately 4,000 square feet.

Columbia Care will continue to operate the retail property as a regulated medical-use cannabis dispensary and the industrial property as a regulated medical-use cannabis cultivation and processing facility. Columbia Care is expected to complete improvements to the industrial property and IIP has agreed to provide reimbursement of up to $1.6 million. This brings IIP’s total investment in the two properties to approximately $14.0 million if all the improvement money is reimbursed.

“Columbia Care is one of the preeminent cannabis operators in the United States, and we are thrilled to introduce them as a new tenant partner,” said Paul Smithers, President and Chief Executive Officer of Innovative Industrial Properties, Inc. “As one of the largest cannabis operators, Columbia Care is dedicated to providing the highest quality products and services to patients and customers, and we look forward to supporting them as a long-term real estate capital partner in New Jersey, including providing the additional real estate capital for further enhancements to their cultivation and processing facility.”

Columbia Care in New Jersey

Columbia Care is one of only three operators licensed to dispense medical cannabis in the southern region of New Jersey. In June, the company announced the opening of a dispensary location and produced its first harvest this month at its cultivation and processing facility. New Jersey classified medical cannabis dispensaries as “essential,” allowing them to remain open during the coronavirus pandemic, while implementing additional safety and social distancing protocols to protect the health of patient customers and employees. Last month, the New Jersey Department of Health also enacted a waiver that allows licensed operators to provide home delivery of medical cannabis products to patients.

Nicholas Vita, CEO of Columbia Care said, “Partnering with IIP provides Columbia Care with access to nondilutive capital that offers flexibility and provides us with the ability to continue to build and expand our cultivation, manufacturing, and retail capabilities in the markets that matter most.”

The dispensary in Vineland NJ will be supported by the company’s 50,000 sq. ft. cultivation and manufacturing facility, which will supply both the dispensary as well as Columbia Care’s wholesale operations in the state. Adhering to both local and state guidelines for social distancing, patients have access to curbside and express pickup options as well as Columbia Care’s innovative Virtual.Care portal, providing the industry’s most complete virtual shopping experience.

 

As of July 20, 2020, IIP owned 61 properties located in Arizona, California, Colorado, Florida, Illinois, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New York, Nevada, North Dakota, Ohio, Pennsylvania and Virginia, totaling approximately 4.5 million rentable square feet (including approximately 1.5 million rentable square feet under development/redevelopment), which were 99.2% leased (based on square footage) with a weighted-average remaining lease term of approximately 16.1 years. As of July 20, 2020, IIP had invested approximately $820.4 million in the aggregate (excluding transaction costs) and had committed an additional approximately $213.3 million to reimburse certain tenants and sellers for completion of construction and tenant improvements at IIP’s properties. .


Debra BorchardtDebra BorchardtJuly 1, 2020
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8min5710

Cresco Labs Inc. and Innovative Industrial Properties, Inc. (IIP) have closed on the acquisition of a property in Massachusetts with a leaseback agreement. The property is approximately 118,000 square feet of industrial space and the deal is valued at $7.8 million.

Cresco is a true leader in quality, customer experience, and patient care in its core markets, and we are pleased to further expand our long-term real estate partnership with them in Massachusetts,” said Paul Smithers, President and Chief Executive Officer of IIP. “The Massachusetts regulated cannabis industry is still in its early stages, and is emerging as one of the strongest medical and adult-use cannabis markets on the East Coast. Our transaction with Cresco represents our fifth property acquisition in Massachusetts, and we are firmly committed to being a strong real estate partner to the industry here for many years to come.”

Cresco Labs has agreed to a long-term, triple-net lease agreement for the property, which it plans to operate as regulated cannabis cultivation, processing and dispensing facility upon completion of redevelopment. Cresco said it is expected to complete additional tenant improvements for the property, for which IIP has agreed to provide reimbursement of up to $21 million. Assuming full reimbursement for the tenant improvements, IIP’s total investment in the property will be approximately $28.8 million.

A String Of IIP Deals


StaffStaffJune 30, 2020
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3min4460

Cannabis investors remain hungry for stock as long as the company is one with solid and consistent revenue. It seems GrowGeneration Corp. (NASDAQ: GRWG) and Innovative Industrial Properties, Inc. (NYSE: IIPR) are two such companies. Both priced and upsized offerings today

IIP Upsizes Huge Offering

Innovative Industrial Properties, Inc. (IIP) priced its underwritten public offering of 2,683,363 shares at $83.85 per share for gross proceeds of approximately $225 million. The deal is expected to close on or about July 2, 2020. The underwriters also have a 30-day option to purchase up to an additional 402,504 shares of its common stock.

IIP said it plans to use the net proceeds from this offering to invest in specialized industrial real estate assets that support the regulated cannabis cultivation and processing industry that are consistent with its investment strategy and for general corporate purposes.

According to Yahoo Finance, five analysts cover the stock. Four have a buy rating, while one is at hold. The average target price is $111 and the stock is currently trading near $85.

GrowGeneration Upsizes Offer

GrowGeneration Corp. (NASDAQ: GRWG) priced an underwritten public offering of 7,500,000 shares of its common stock at $5.60 per share. GrowGen said it expects the gross proceeds to be roughly $42 million, before deducting the underwriting discount and other estimated offering expenses. The deal was upsized from the previously announced offering size of $35 million of common stock and is expected to close on July 2. The underwriters have a 30-day option to purchase up to an additional 1,125,000 shares of common stock offered in the public market.

According to Yahoo Finance, five analysts are covering the stock and all have a buy rating. The average target price is $8 and the stock is selling near $6.50. The average revenue estimate for the current quarter is $36 million, an increase of 87% over last year’s sales for the same time period.


Debra BorchardtDebra BorchardtJune 29, 2020
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6min3370

It’s time for your Daily Hit of cannabis financial news for June 29, 2020. 

On the Site 

Aurora Cannabis 

It’s been a rough road for some of the OG’s of the cannabis industry. Today, Aurora Cannabis (NYSE:ACB) said its Co-Founder Terry Booth had retired from his role as Director of the Company, effective June 26, 2020. Mr. Booth was the Chief Executive Officer of Aurora from December 2014 through February 2020 and served on Aurora’s Board of Directors since December 2014. 

According to Wikipedia, Aurora was founded in 2006 by Terry Booth, Steve Dobler, Dale Lesack, and Chris Mayerson. Booth and Dobler collectively invested over $5 million of their own capital. The founding group secured a 160+ acre parcel of land in Mountain View County, Alberta, where they established Aurora’s first facility. The company received its license to grow cannabis in 2014, making it the first cannabis producer to obtain a federal license in that province. The company went public in Canada in 2017 and then in 2018 began trading at the New York Stock Exchange. 

Cannapreneur 

Green Market Report CEO Debra Borchardt: 

Kevin Harrington has recently joined with Cannaprenuer Partners, a company that is investing in cannabis companies. Kevin, you’ve not been in cannabis, but you have certainly been in the corporate world and businesses. You’ve been helping so many companies get started or grow. What at this point prompted you to get into cannabis and specifically choose to join up with Cannaprenuer? 

Kevin Harrington: 

Great question. Thank you. If I go all the way back, I’ve been a product guy for many years. 38 years ago I was creating infomercials and As Seen on TV, and doing some fun things with Jack LaLanne and the juicer, and George Foreman, and Tony Little, and Billy Mays. That’s been my previous life, and taking a lot of pitches. Of course, then original Shark on Shark Tank, being able to take pitches on national television, that was pretty cool. But one thing Shark Tank never did, they never took pitches about cannabis. Shark Tank is on ABC Network. It’s the Disney Group and so cannabis was not their cup of tea. I don’t know if they’ll change that at some point, but most of the entrepreneurs and judges and Sharks are in cannabis investments, O’Leary and Cuban, et cetera. 

 In Other News 

Innovative Industrial Properties, Inc. (NYSE: IIPR) announced today that it has commenced a public offering of 1,800,000 shares of its common stock. The company said it expects to grant the underwriters a 30-day option to purchase up to an additional 270,000 shares of its common stock. The company said it intends to use the net proceeds from this offering to invest in specialized industrial real estate assets that support the regulated cannabis cultivation and processing industry that are consistent with its investment strategy, and for general corporate purposes. 


StaffStaffJune 22, 2020
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4min7600

Innovative Industrial Properties, Inc. (NYSE: IIPR) is making available $30 million for additional expansion of their cannabis cultivation and processing facilities at the Green Leaf Medical property in Saxton, Pennsylvania. The company’s lease was amended to reflect the new investment as well as an adjustment to the base rent 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 $43.0 million.

“We are thrilled to expand our real estate partnership once again with Green Leaf, providing them the capital for this key expansion at their mission-critical facility in Saxton,” said Paul Smithers, President and Chief Executive Officer of IIP. “Green Leaf has always taken a thoughtful, long-term view toward expansion, and this second phase is expected to dramatically increase production capacity at the Saxton facility, with an eye toward meeting demand in one of the strongest medical cannabis markets in the United States.”

Green Leaf, which is known for its brand gLeaf, operates medical cannabis cultivation, extraction and retail operations in four contiguous states in the mid-Atlantic region, including Maryland, Pennsylvania, Ohio and Virginia, with pending vertical applications in New Jersey and West Virginia. According to Green Leaf, the company has raised approximately $27 million from the sale of equity to build its multi-state operation and has generated positive EBITDA since 2018.

In April of this year, Green Leaf announced a new debt financing transaction with Chicago Atlantic Group, raising $10 million to fund the acquisition of additional dispensaries in Virginia and Pennsylvania. Green Leaf has one of 25 medical cannabis cultivation/processor licenses issued by the state of Pennsylvania.

“We appreciate the continued strong support of IIP as our long-term real estate capital partner, and look forward to expanding capacity at our Saxton facility, which provides the enhanced infrastructure elements that are key to growing the highest quality, consistent cannabis products for our patients,” said Philip Goldberg, Chief Executive Officer of Green Leaf.

Innovative Acquired Property in 2019

IIP bought the property in a sale-leaseback transaction with Green Leaf in May of last year, which comprises two buildings totaling approximately 266,000 square feet of industrial space. Green Leaf previously redeveloped approximately 103,000 square feet of the industrial space for medical-use cannabis cultivation and processing, and this funding is expected to include the build-out of the remaining 163,000 square feet of industrial space.

IIP also owns and leases to Green Leaf an 82,000 square foot medical-use cannabis cultivation, processing, and dispensing facility in Richmond, Virginia, which the company acquired earlier this year.

Pennsylvania

With first sales in 2018, the Pennsylvania medical cannabis market has grown significantly with sales hitting $524 million. The Pennsylvania Department of Health’s report dated May 15, 2020, noted that over 300,000 patient certifications have been issued by approved practitioners since the program began.

Similar to other states, Pennsylvania has expanded its program over time, adding several new medical conditions eligible for treatment with medical cannabis, including, among others, anxiety disorders and Tourette Syndrome. In addition, according to an April 2020 study by Harper Polling, over 60% of Pennsylvanians support legalizing adult-use cannabis in the state, with strong levels of support throughout the political spectrum. Multiple bills to legalize adult-use cannabis are pending in Pennsylvania’s legislature.


Debra BorchardtDebra BorchardtMay 7, 2020
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5min5910

Cannabis REIT Innovative Industrial Properties, Inc.  (NYSE:IIPR) reported its results for the first quarter ending March 31, 2020, with total revenues of approximately $21.1 million. This was a 210% increase from the prior year’s first quarter. Innovative Industrial also delivered a net income of approximately $11.5 million or $0.72 per diluted share.

The adjusted funds from operations (AFFO) were approximately $17.8 million, or $1.12 per diluted share. Net income available to common stockholders and AFFO increased by 249% and 236% from the prior year’s first quarter, respectively. The company paid a quarterly dividend of $1.00 per share on April 15, 2020, which increased approximately 122% increase over the first quarter of 2019’s dividend.

“One of the pillars of our business strategy has consistently been a conservative, flexible balance sheet, and we believe we are exceptionally well-positioned to not only weather this unprecedented health crisis and economic disruption but to continue to make real estate investments on a long-term basis with best-in-class tenant operators,” said Alan Gold, Executive Chairman of IIP. “We remain steadfast in our support of this industry and its bright long-term future and are working every day through this crisis with our tenant partners toward continuing to build a tremendous future forward of growth and strength for many years to come. When we overcome this crisis through the collective ingenuity of our top medical professionals and researchers, the regulated cannabis industry will continue to thrive and be one of the top drivers of growth and good jobs across the country.”

COVID Rent Deferrals

While cannabis was deemed an essential service in many states, social distancing was still required. This makes working in a grow facility a challenging prospect. IIP said it has had conversations with each of its tenants in March and April over the situation. As a result, the company said that it is providing temporary rent deferrals for three of its 21 tenants. The decision was to apply a portion of the security deposit IIP holds under each lease to pay April rent in full, defer rent for May and June in full, and provide for the pro-rata repayment of the security deposit and deferred rent over an 18 month time period starting July 1.

That means a total of $743,000 of security deposits that IIP holds in cash were applied to the payment of rent for April, and a total of approximately $1.5 million in rent was deferred for May and June. The total of this amount, $2.3 million, represents approximately 3% of IIP’s total revenues as reported for the three months ended March 31, 2020, annualized.

Current Portfolio

As of May 6, 2020, IIP said it 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 1.3 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 15.9 years. As of May 6, 2020, the company has invested approximately $719.7 million in the aggregate and had committed an additional approximately $143.2 million to reimburse certain tenants and sellers for completion of construction and tenant improvements at IIP’s properties.

Financial Picture

In January, IIP completed an underwritten public offering of 3,412,969 shares of common stock, including the exercise in full of the underwriters’ option to purchase an additional 445,170 shares, resulting in net proceeds of approximately $239.6 million. The company reported that it has roughly $108.3 million in cash and cash equivalents and approximately $272.9 million in short-term investments, totaling approximately $381.2 million.


StaffStaffApril 23, 2020
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2min4920

Cresco Labs Inc.  (OTCQX:CRLBF) completed its agreement to sell the company’s Marshall, MI property to Innovative Industrial Properties, Inc. (NYSE: IIPR) in a deal valued at approximately $16 million. The previously announced sale included $11 million in funding for tenant improvements. The property represents approximately 115,000 square feet of industrial space in aggregate. The stock popped over 4% on the news to lately trade at $4.42.

“We are pleased to announce the successful completion of yet another sale-and-leaseback transaction,” said Cresco Labs CEO and Co-founder Charlie Bachtell. “This is directly aligned with our stated strategy of unlocking valuable capital and building a stronger foundation to support revenue growth, expand our retail presence across Michigan and enhance shareholder value. IIP has been our long-term capital partner across multiple states, and we are pleased to team up with them once again.”

The company said that this sale marks Cresco’s fifth completed sale-and-leaseback transaction, the fourth with IIP, which has unlocked a total of nearly $123 million in the last seven months. Cresco Labs will also enter into a long-term, triple-net lease agreement with IIP and will continue to operate the property as a licensed cannabis cultivation and processing facility upon completion of redevelopment.

 


Kaitlin DomangueKaitlin DomangueFebruary 27, 2020
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5min5980

It’s time for your Daily Hit of cannabis financial news for February 27th, 2020. 

On the Site

Top Selling CBD Products on LeafLink

LeafLink broke down the data of their top-selling products at the request of Hemp Market Report, with the top-selling product being Mary’s Medicinals patch priced at $10. The rest of the list is as follows: 

Most purchased products containing CBD (by order volume)

  • 1:1 CBD:THC Patch, 100 mg – Mary’s Medicinals
  • 1:1 CBD/THC Sour Gummies, Strawberry Lemonade – Wana Brands
  • 10:1 CBD/THC CBD Therapy Assorted Pucks, 200 mg  – CannaPunch

Top categories for products containing CBD 

  • Edibles & Ingestibles 
  • Cartridges 
  • Topicals 

Top-selling brands with products containing CBD 

  • Terrapin Pennsylvania 
  • Wana Brands
  • Mary’s Medicinals

Social Club TV Gives Cannabis Content a Home

Green Market Report was able to talk with Josh Otten of Social Club TV. Social Club TV is a collaboration of RONIN Content Services (CEO Josh Otten) and Cookies (CEO Berner Milan Jr.) This is a cannabis network that will be available for streaming on Apple TV, Amazon Prime, Roku, and Pluto. The network features over 17 series and 300 episodes. 

Innovative Industrial Properties Generates $17 Million in Q4 

Innovative Industrial Properties, Inc. (NYSE: IIPR) reported its earnings from the fourth quarter yesterday, exceeding analysts’ expectations. The quarter ended on December 31st, 2019. 

The cannabis real estate company reported total revenue of approximately $17.7 million in Q4, an astonishing 269% increase from the prior year’s quarter. This is an amazing jump from the companies total revenue of just $4.8 million in Q4 of 2018. 

Vermont Takes Another Step Towards Legalization of Recreational Cannabis

On Wednesday, the Vermont House of Representatives voted in favor (90-54) of a bill that would legalize, regulate, and tax cannabis sales for adults 21 and older. 

According to the Marijuana Policy Project, S. 54 will now be scheduled for a final House vote, which is expected tomorrow. If it passes there, it will return to the Senate, which has already approved a different version of the bill in a 23-5 vote. The House and Senate will have to agree on a final version of the bill before it can proceed to Gov. Phil Scott’s desk.

In Other News

Acreage Holdings Stock Falls Due to Q4 Earnings 

Acreage reported a loss of $50.5 million over the 3-month period of Q4, with revenue coming in at $21.1 million. Despite revenue for the full year reaching $155 million, full-year net loss was US$150.3 million, leading to an 8% drop-off in Acreage stock.


Kaitlin DomangueKaitlin DomangueFebruary 27, 2020
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3min14571

Innovative Industrial Properties, Inc. (NYSE: IIPR) reported its earnings from the fourth quarter yesterday, exceeding analysts’ expectations. The quarter ended on December 31st, 2019. 

The cannabis real estate company reported total revenue of approximately $17.7 million in Q4, an astonishing 269% increase from the prior year’s quarter. This is an amazing jump from the companies total revenue of just $4.8 million in Q4 of 2018. 

According to IIRP’s report, since October of 2019, the company has acquired 20 properties and executed five lease amendments across various states in the U.S., totaling an aggregate investment of approximately $308.8 million. New tenant relationships include key cannabis players like Cresco Labs and Green Thumb Industries, and the company expanded existing relationships with companies like Trulieve and PharmaCann.

Since the addition of company properties, IIP has grown its portfolio from 11 properties to an impressive 51 properties since January 1st, 2019. The total properties have grown from approximately 1.0 million square feet in nine states, to roughly 3.2 million rentable square feet across 15 states. IIP’s total investment in its property portfolio has increased by 307%, with the aggregate amount going from $167.4 million to $680.7 million. The company acquired multiple properties in Illinois, Pennsylvania, Michigan, and Ohio, with the rest being in California, Colorado, Massachusetts, Arizona, and North Dakota. 

The total net income available to the company’s common share stockholders accumulated a total of $9.6 million for the total, with each diluted share representing $0.78. Adjusted funds from operations totaled $14.3 million, or $1.18 per diluted share. The adjusted funds from operations represented a 293% increase and an increase of 211% from the previous quarter’s earnings, respectively.  

Following the end of the quarter, the company completed an underwritten public offering of 3,412,969 shares of common stock, including the exercise in full of the underwriters’ option to purchase an additional 445,170 shares, resulting in gross proceeds of approximately $250.0 million. IIP also established an “at-the-market” equity offering program, issuing shares of common stock from September until February. According to the company, the net proceeds from that issuance totaled approximately. $184.8 million.

The company paid a quarterly dividend of $1.00 per common share, on January 15th to stockholders, positioning the company at an increase of 186% from the prior year’s quarter. 

Innovative Industrial Properties, Inc. will conduct a conference call and webcast at 10:00 a.m. Pacific Time on Thursday, February 27, 2020, to discuss IIP’s financial results and operations for the fourth quarter. 


Kaitlin DomangueKaitlin DomangueNovember 7, 2019
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3min9390

California-based cannabis REIT Innovative Industrial Properties (IIP) (NYSE:IIPR) shares shot up over 10% in trading on Thursday after reporting solid results for their 2019 third-quarter after the market closed on Wednesday. The stock was lately trading at $80.02, well above its 52-week low of $42.10. 

In Q3 of 2019, IIP’s earnings per share were $0.55, a significant increase from their EPS of $0.21 2018’s Q3. Wall Street was looking for an EPS of $0.47, so the company greatly exceeded expectations. IIP’s 2019 Q3 AFFO per share was $0.86, creating growth of 126% from $0.38 in 2018’s Q3. Their AFFO for the quarter was $9.5 million. 

The company reported a net income of $6.2 million in Q3 in 2019, a noteworthy increase from their $1.5 million in 2018’s third quarter, with an operating income of $6.8 million. IIP also paid a quarterly dividend of $0.78 per share on October 15, 2019, which was a 30% increase from IIP’s second-quarter 2019 dividend and an approximately 123% increase over the third quarter 2018’s dividend.

Innovative Industrial Properties’ net rental revenue for Q3 of 2019 was $11.2 million, a 201% change from their report of net rental revenue of $3.7 million for 2018’s Q3. Wall Street expected $10.7 million for this year’s third quarter. The company’s continual revenue growth can be attributed to the acquisition of new properties.

During the quarter, IIP acquired 10 properties. Five are located in California, and one in Arizona, Massachusetts, Nevada, Michigan, and Pennsylvania. Their Massachusetts property is leased to a subsidiary of Trulieve Cannabis, the leading medical cannabis company in Florida. Each property is fully leased to a tenant through a triple-net, long term lease. 

Analysts are modeling for an EPS of $0.57 on revenue of $13.1 million, representing a 138% growth for their EPS, and growth of 174% for their revenue in the fourth quarter. IIP has been able to capitalize on the tightening of financial markets for cannabis companies. These businesses are turning to real estate assets in order to access capital. 

According to the company statement, as of November 6, 2019, IIP owned 41 properties located in Arizona, California, Colorado, Florida, Illinois, Maryland, Massachusetts, Michigan, Minnesota, New York, Nevada, Ohio and Pennsylvania, totaling approximately 2.8 million rentable square feet (including approximately 903,000 rentable square feet under development/redevelopment), which were 100% leased with a weighted-average remaining lease term of approximately 15.5 years.



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The Green Market Report focuses on the financial news of the rapidly growing cannabis industry. Our target approach filters out the daily noise and does a deep dive into the financial, business and economic side of the cannabis industry. Our team is cultivating the industry’s critical news into one source and providing open source insights and data analysis


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