SAN DIEGO--(BUSINESS WIRE)--
Innovative Industrial Properties, Inc. (the "Company") (NYSE: IIPR), the
leading provider of creative real estate capital solutions to the
medical-use cannabis industry, announced today that it closed on the
acquisition of a property located at 96 Palmer Road in Monson,
Massachusetts, which comprises approximately 55,000 square feet of
industrial space situated on approximately 5.4 acres.
The purchase price for the property was $12.75 million. Concurrent with
the closing of the purchase, the Company entered into a long-term,
triple-net lease agreement with Holistic Industries, Inc. ("Holistic"),
which intends to continue to operate the property as a medical-use
cannabis cultivation and processing facility in accordance with
Massachusetts medical-use cannabis regulations. The initial term of the
lease is 20 years, with three options to extend the term for three
additional five-year periods. The lease provides for an initial
annualized aggregate base rent of $1,912,500, which is equal to 15% of
the purchase price of the property. The aggregate base rent is subject
to 3.25% annual increases during the term of the lease, and Holistic is
also responsible for paying the Company a property management fee equal
to 1.5% of the then-current aggregate base rent. As a part of its
medical cannabis license, Holistic is allowed up to three registered
marijuana dispensaries, which are in varying stages of development.
Massachusetts, with approximately 6.9 million residents, approved
cannabis for medical-use by popular vote in 2012, with first sales in
2014. As of June 30, 2018, there were 36 registered marijuana
dispensaries and over 51,000 active patients in the medical-use cannabis
program, treating a wide variety of qualifying medical conditions,
including cancer, HIV/AIDS, anxiety, depression, chronic back pain and
multiple sclerosis. Massachusetts voters also approved cannabis for
adult-use in November 2016, with first sales under the regulated
adult-use cannabis program expected to take place in 2018. ArcView
Market Research projects Massachusetts' total regulated cannabis
spending to grow rapidly, from approximately $380 million in sales in
2018 to approximately $1.2 billion by 2022.
"We are very pleased to close on this transaction with Holistic in
Massachusetts, whose seasoned management team has operated in regulated
medical-use cannabis markets for many years," said Paul Smithers,
President and Chief Executive Officer of the Company. "We look forward
to supporting Holistic as their long-term real estate partner, as they
continue to expand their operations and develop their dispensary
locations to address compelling patient needs."
"The IIP team was great to work with throughout this transaction, making
the process smooth and accelerating our timeframe to close, which
provides us the funds to reinvest into our program expansion in
Massachusetts," said Josh Genderson, Chief Executive Officer of
Holistic. "We are singularly focused on creating the highest quality
product with exacting specifications for our patients, and this facility
provides us the state-of-the-art environment to do just that. We look
forward to delivering that level of quality to our Massachusetts
patients for many years to come."
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. intends to elect to be taxed as a
real estate investment trust. Additional information is available at www.innovativeindustrialproperties.com.
Innovative Industrial Properties
Forward-Looking Statements
This press release contains statements that the Company 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 of the Massachusetts property, Holistic
and the Massachusetts 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.The Company disclaims any obligation
to update or revise any forward-looking statements, whether as a result
of new information, future events or otherwise.
View source version on businesswire.com: https://www.businesswire.com/news/home/20180712005636/en/
Catherine Hastings
Chief Financial Officer, Chief Accounting
Officer and Treasurer
Innovative Industrial Properties, Inc.
(858)
997-3332
Source: Innovative Industrial Properties, Inc.