Innovative Industrial Archives - Green Market Report

New York Stock Exchange-listed REIT Innovative Industrial Properties (IIPR) closed on a previously announced property in Arizona for $15 million. The Pharm, LLC operates the 358,000 square foot greenhouse and industrial space.

The Pharm is one of the largest wholesalers of medical-use cannabis in the state of Arizona and is expected to complete some tenant improvements to the building. IIPR will reimburse The Pharm up to $3 million for those improvements, which would bring the total investment in the building to $18 million.

“We are very pleased to introduce The Pharm as our newest tenant, and to be able to creatively structure a real estate transaction to meet their capital needs for planned expansion in the Arizona market and beyond,” said Ben Regin, Director of Investments and Finance at IIPR. “We believe that The Pharm’s highly experienced, multi-disciplinary management team is well positioned to continue to grow its market share in a rapidly expanding Arizona medical-use cannabis market, in addition to carrying its highly successful program to new markets in other states.”

The Pharm will use the property to cultivate and process medical marijuana. The initial lease if for 15 years with an initial annualized aggregate base rent of $2,520,000, payable monthly. In connection with the execution of the lease, The Pharm subsidiary also deposited with the Company a security deposit of $630,000.

“Innovative Industrial Properties collaborated with us closely throughout this transaction, providing creative solutions to address our specific capital needs,” said Randy Smith, Founder and Chief Executive Officer of The Pharm. “We are thrilled to have a great real estate partner like Innovative Industrial Properties that provides us the key capital we need to drive our strong growth and execution on strategic priorities.”

IIPR stock has increased 48% for the past year according to Yahoo Finance, versus the S&P 500 which has risen 18%. It is one of the few cannabis companies that pays a dividend giving this stock a 2.4% yield.

New York Stock Exchange-listed Innovative Industrial Properties Inc. (IIPR) announced that it filed for a public offering of Series A Cumulative Redeemable Preferred Stock that would trade under the symbol IIPRPrA. The proceeds from the offering will be used to support the company’s investment strategy of finding specialized industrial facilities that are used to cultivate medical marijuana.

Ladenburg Thalman (LTS)  is acting as the book-runner and National Securities Corporation (NHLD) is acting as the co-manager for the offering.  The company said in a statement that it will grant the underwriters a 30-day option to buy additional shares to cover over-allotments. A copy of the preliminary prospectus for the offering may be obtained, when available, from Ladenburg Thalmann & Co. Inc., 570 Lexington Avenue, 11th Floor, New York, NY 10022, or by email at prospectus@ladenburg.com.

Innovative Industrial Properties recently declared a quarterly dividend of 15 cents. It is one of the few, if not the only, cannabis stocks to pay a regular dividend. This 60 cents annual dividend gives the company a yield of 3.2% on an approximate price of $18.69 per share.

According to Yahoo Finance, there are two analysts covering the stock and both have a buy rating. The average target price is $21.75. The company is down 2.4% for the past year, but in the last six months, the stock has climbed over 9%. The 52-week low is $14.50, while the high is $20.52.

On the last earnings call, CEO Paul Smithers said, “We’re in advanced discussions regarding a number of potential acquisitions with a pipeline of approximately $100 million spanning a number of states including Arizona, Illinois, Maryland, Massachusetts, Ohio, and Pennsylvania to name a few.”

Executive Chairman Alan Gold added, “This nascent industry that has witnessed amazing growth with state-regulated medical-use cannabis markets, now comprising a majority of the United States. We are very optimistic about the future of this industry and our ability to deliver an enduring value to our tenant partners in providing tailored real estate solutions that meet their key operational and capital needs.”