The New York Stock Exchange’s only publicly-traded cannabis real estate company has agreed to invest an additional $8 million into a Holliston marijuana production facility in a deal with operator PharmaCann LLC
PharmaCann is a multi-state cannabis operator with licenses in Illinois, Maryland, Massachusetts, New York, Pennsylvania, Ohio and Virginia.
Innovative Industrial Properties Inc.originally acquired the 465 Hopping Brook Road property and entered into a long-term lease with PharmaCann in 2018, prior to the start of construction. With this additional funding, which brings IIP’s total investment to $26.5 million, PharmaCann aims to significantly expand production capacity at the property. In addition to the Massachusetts property, IIP acquired and executed leases with PharmaCann for its medical-use cannabis cultivation and processing facilities in New York, Ohio and Pennsylvania, with the Pennsylvania transaction closing last month.
The lease amendment, amended as part of the deal, also adjusted the base rent under the lease to take into account the additional available funding and extended the term of the lease agreement.
“We are very happy to continue to support PharmaCann as their go-to real estate partner for their mission-critical facilities,” IIP President and CEO Paul Smithers said in a statement. “We look forward to completion of our development projects with PharmaCann and continuing to support their growth in these states and beyond.”
From December 2018 through May 2019, representing just the first six full months since Massachusetts launched its regulated adult-use cannabis program, aggregate adult-use cannabis sales approached $140 million, including $34 million in May sales alone, according to Marijuana Business Daily. Massachusetts regulators approved regulations earlier this week that govern cannabis cafes and delivery, providing for two additional potential drivers for continued strong growth of the industry.
As of Sept. 25, IIP owned 31 properties located in Arizona, California, Colorado, Illinois, Maryland, Massachusetts, Michigan, Minnesota, New York, Nevada, Ohio and Pennsylvania, totaling approximately 2.2 million rentable square feet, including approximately 687,000 rentable square feet under development or redevelopment, which were 100 percent leased with a weighted-average remaining lease term of approximately 15.9 years. IIP has so far invested approximately $293.1 million in the aggregate (excluding transaction costs) and had committed an additional approximately $103.4 million to reimburse certain tenants and sellers for completion of construction and tenant improvements at IIP’s properties. In a statement, IIP said its average current yield on invested capital is approximately 14.5 percent for these 31 properties, including property management fees,
