real estate Archives - Green Market Report

Debra BorchardtDebra BorchardtDecember 13, 2018
Harvest-1280x853.jpg

3min14020

Harvest Health & Recreation, Inc. (CSE: HARV)  has formed a joint venture with Aina We Would (AWW), LLC for a real estate investment vehicle that plans to provide funding to purchase cannabis-related real estate assets. In addition to a Harvest subsidiary, AWW is made up of two family offices, Aina Advisors LLC and Stadlen Family Holdings, LLC.

Aina and Stadlen have both committed to fund or arrange up to $100 million to fund projects for the joint venture. The statement said that AWW plans to buy, develop and finance new construction projects, engage in land purchases, capital improvements and sale-leasebacks to Harvest and other operators in the cannabis industry.

As a part of the arrangement, Harvest will have the opportunity to get lease rates below current market providers and then source permanent financing for the properties it acquires. Harvest may also use AWW for its construction and real estate development needs.

In addition, Harvest said that it was has committed to lending AWW a minimum of up to $30 million in short-term financing to permit AWW to seek out acquisition projects. The company said that the goal of the short-term financing was so that they could move quickly on projects.  These funds will be replaced by permanent financing provided or sourced by Stadlen and Aina.

“AWW gives Harvest an excellent funding option for the development of cultivations, manufacturing facilities, and dispensaries,” said Harvest President Steve Gutterman.  “This new vehicle, combined with the approximate $290 million we raised in conjunction with our recent debt and equity financing transactions, affiliate roll-up and recently completed acquisitions leading up to and following our listing on the CSE, gives us one of the strongest balance sheets in the industry.”

Harvest owns more than 40 cannabis licenses with a domestic footprint that includes real estate, equipment and other assets in 11 states, including Arizona, Arkansas, California, Colorado, Florida, Maryland, Massachusetts, Nevada, North Dakota, Ohio and Pennsylvania.

“Real estate is the lifeblood of the cannabis economy and a huge piece of any company’s bottom line,” said Harvest Executive Chairman, Jason Vedadi. “With this partnership, AWW has been structured to turn a significant cost center into a potential profit driver and to become a potentially attractive source of financing for Harvest’s expected expansion.”


Jack SmithJack SmithMarch 29, 2018
shutterstock_421629436.jpg

3min13950

Innovative Industrial Properties Inc. (IIPR) reported fourth-quarter earnings of 7 cents a share and highlighted the steps it has taken since becoming a publicly traded company, perhaps paving the way for more small and mid-cap cannabis companies to do the same.

Innovative, which trades on the New York Stock Exchange under the ticker “IIPR,” said in a statement it earned 7 cents a share on $2.3 million in revenue. The commercial real estate company also said that adjusted funds from operations (AFFO), a widely used measure for real estate organizations, was 23 cents a share in the quarter.

During the quarter, Innovative said it acquired a medical-use cannabis cultivation and processing facility in Arizona with a subsidiary of The Pharm in a sale-leaseback deal. The total amount spent was $18 million, including $15 million for the purchase.

It also acquired two other medical-use cannabis cultivation facilities with similar transactions, signing deals with Vireo Health for facilities in New York and Minnesota. The combined cost for the two facilities was $8.4 million, including $1 million spent on tenant improvement costs.

The acquisitions bring Innovative’s property portfolio to five, spread across the country. Totaling 617,000 square feet, all of the properties are 100 percent leased. The average length left on the leases is approximately 14.7 years, the company noted in the statement.

As of the end of the year, Innovative said it had invested $68.3 million in the properties, with an additional $5 million for tenant improvements at the various properties.

The company also noted its fourth-quarter dividend was 25 cents a share, a 67 percent sequential increase. The dividend was paid on Jan. 16, 2018 to shareholders on record as of Dec. 29, 2017.

Innovative’s shares yield 3.77 percent at current levels, significantly more than the 2.77 percent yield on a 10-year U.S. Treasury bond.

San Diego-based Innovative also said that it had sold an additional 3.22 million shares in a public offering after the quarter closed, giving the company an additional $79.3 million to be used for general corporate purchases.

Innovative shares closed at $26.32 on Wednesday, up 1.9 percent. Shares of the company have fallen nearly 30 percent since the start of the year.


StaffStaffDecember 18, 2017
The-Pharm-1280x720.jpg

3min23820

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.


Debra BorchardtDebra BorchardtOctober 9, 2017
zoned.jpg

3min16560

Zoned Properties (ZDPY) released a company presentation on Monday that shows that the company has moved from an annual loss of $501,576 in 2016 to a year-to-date gain of $1 million. Zoned Properties develops and leases properties in emerging industries, including licensed medical marijuana.

The company is coming from a position of strength uncommon among many pot stocks with a solid balance sheet of $9.6 million in assets and $2.2 million in liabilities, but no warrants and no convertible debt. The company currently has six properties in its portfolio with five locations in Arizona and one in Colorado.

Part of the turn in fortunes for Zoned Properties for 2017 was the one-time net gain from the sale of a property in Tempe Arizona for $831,753. The book value for the company as of June 30 is $9.4 million and the market value is $23.7 million.

The stock though hasn’t performed as well as the company’s balance sheet. It has plunged 48% over the past year from a 52-week high of $3.88 to a low of 50 cents. The stock started to recover following the company’s second-quarter earnings release in August. In that release, the company noted that its revenue had increased 23% to $505,000 from the previous year’s second-quarter earnings of $410,000. Operating expenses also declined 32% to $355,000 from the previous year’s second quarter expenses of $524,000. The net income was also positive at $118,000 versus the previous year’s loss of $173,000.

Zoned also announced last week that it increased the space being leased by its tenant in Tempe Arizona. “Expansion at the Tempe Property will drive increased revenue and profitability in the coming quarters as increased monthly rent payments take effect,” commented Bryan McLaren, Chief Executive Officer of Zoned Properties. “Our anchor tenant now occupies more than 50% of the 60,000 square feet of total rentable space under long-term lease agreements with guaranteed rent escalators throughout their terms.”

So, while Zoned Properties is humming along in the Arizona market, some investors may be wanting to see if they’ll be expanding beyond the state and pursuing properties in other bigger markets. The real estate space in the cannabis industry is becoming crowded very quickly. It may be that the stock will respond as Zoned expands their footprint further away from the Arizona market.


StaffStaffOctober 3, 2017
Terra.jpg

3min13970

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.”

 

 

 

 



About Us

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


READ MORE



Recent Tweets

@GreenMarketRpt – 2 days

Our biggest fans this week: WallandBroad, buhlreports, RosieMattio. Thank you! via

@GreenMarketRpt – 2 days

Green Market Report’s Marijuana Money December 6, 2019

@GreenMarketRpt – 3 days

My week on Twitter 🎉: 6 Mentions, 108 Mention Reach, 15 Likes, 6 Retweets, 26.8K Retweet Reach. See yours with…

Back to Top

You have Successfully Subscribed!