Innovative Industrial Properties Acquires Property in New Jersey and Expands Real Estate Partnership with AWH
SAN DIEGO, February 10, 2022–(BUSINESS WIRE)–Innovative Industrial Properties, Inc. (IIP), the first and only New York Stock Exchange-listed real estate company (NYSE: IIPR) focused on the regulated cannabis industry in the United States, today announced the closing of the acquisition of a property in New Jersey, and entered into a long-term lease with a subsidiary of Ascend Wellness Holdings, Inc. (AWH) on the property.
The purchase price for the property was $35.4 million (excluding transaction fees). AWH is expected to complete additional upgrades to the approximately 114,000 square foot property as a regulated cannabis cultivation and processing facility, for which IIP has agreed to reimburse up to $4.6 million. Assuming full repayment of leasehold improvements, IIP’s total investment in the building is expected to be $40.0 million. AWH plans to expand its overall cultivation footprint in New Jersey to include a lab, kitchen, and 150,000 square feet of canopy by the end of 2023.
In addition to this New Jersey property, IIP owns and leases to AWH three other properties in Illinois, Massachusetts and Michigan, IIP’s total investment in properties leased to AWH, including commitments to finance future leasehold improvements, equivalent to approximately $179.75 million.
As a pioneering real estate investment trust (REIT) for the regulated cannabis industry, IIP partners with experienced, regulated cannabis operators and serves as a source of capital by acquiring and leasing their real estate assets, in addition to offer other creative real estate. capital-based solutions.
“We have been AWH’s long-term real estate partner since 2018 and are excited to once again expand our relationship with Abner and his team,” said Paul Smithers, President and CEO of IIP. “The AWH team continues to distinguish itself by providing the highest quality cannabis products and services to its patients and customers, and has developed a significant strategic footprint in some of the strongest regulated cannabis markets, including the New Jersey.”
AWH is a publicly traded, vertically integrated cannabis company with assets in Illinois, Michigan, Ohio, Massachusetts and New Jersey and approximately 1,500 employees. AWH owns and operates state-of-the-art cultivation facilities, cultivates award-winning varieties, and produces a curated selection of produce, including its Ozone-branded products. In New Jersey, AWH currently operates two dispensaries in Montclair and Rochelle Park and plans to open an additional dispensary in Fort Lee in late spring 2022.
“Throughout these years of transforming AWH, we have greatly valued our long-term real estate partnership with IIP, working closely together to deliver optimal real estate capital solutions that have been instrumental in driving our expansion over time,” said Abner Kurtin, Managing Director. Director and co-founder of AWH. “Through IIP’s partnership, we look forward to significantly enhancing our manufacturing capacity in New Jersey and bringing our award-winning products and exceptional service to patients and customers across the state.”
New Jersey has taken strong steps in recent years to expand access to the medical cannabis program to patients across the state, including changing rules to allow oil-based formulations and adding seven new medical conditions eligible, including PTSD, anxiety, migraines and certain types of chronic pain. The program was expanded by the passage of the Jake Honig Compassionate Use Medical Cannabis Act, which, among other things, increased the monthly limit for cannabis patients, allowed physician assistants and advanced practice nurses to recommend medical cannabis to patients and authorized the distribution of edible cannabis products to adult patients.
Additionally, Governor Phil Murphy signed into law the New Jersey Cannabis Regulation, Enforcement, Assistance and Modernization Act (CREAMMA) in February 2021, which legalized cannabis for adult use. In August 2021, the New Jersey Cannabis Regulatory Commission adopted its initial rules and regulations. According to MJBizDaily, regulated adult cannabis sales in New Jersey are expected to reach $2.1 billion by the fourth year of the program. IIP has three regulated cannabis cultivation and processing facilities and one dispensary in New Jersey, representing a total planned investment of approximately $90.0 million, which includes commitments from IIP to fund future enhancements to certain properties.
As of February 10, 2022, IIP owned 105 properties located in Arizona, California, Colorado, Florida, Illinois, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Nevada, New Jersey, New York, North Dakota, Ohio, Pennsylvania, Texas, Virginia and Washington, representing a total of approximately 7.9 million leasable square feet (including approximately 2.5 million leasable square feet under development/redevelopment). As of February 10, 2022, IIP has committed approximately $2.1 billion across its portfolio, including capital invested to date (excluding transaction costs) and additional capital commitments to fund future construction and upgrades. leasehold improvements to IIP properties. These statistics do not include an $18.5 million IIP loan to a developer for the construction of a regulated cannabis cultivation and processing facility in California and up to $55.0 million that may be financed between June 15, 2022 and July 31, 2022 pursuant to IIP’s lease with a tenant in one of IIP’s Pennsylvania properties, as the tenant of that property cannot elect to have IIP disburse such funds and pay to IIP the corresponding base rent on these funds.
About Innovative Industrial Properties
Innovative Industrial Properties, Inc. is a self-administered Maryland corporation focused on acquiring, owning and managing specialty industrial properties leased to experienced state-licensed operators for their regulated cannabis facilities. Innovative Industrial Properties, Inc. has elected to be taxed as a real estate investment trust, effective for the year ended December 31, 2017. Additional information is available at www.innovativeindustrialproperties.com.
AWH is a vertically integrated operator with assets in Illinois, Michigan, Ohio, Massachusetts and New Jersey. AWH owns and operates state-of-the-art cultivation facilities, cultivating award-winning varieties and producing a curated selection of produce. AWH produces and distributes Ozone branded products. For more information, visit www.awholdings.com.
Innovative Industrial Properties Forward-Looking Statements
This press release contains statements that IIP considers 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 Limiting thereto, statements regarding the acquisition and lease of New Jersey property, AWH and the New Jersey Regulated Cannabis Market, are forward-looking statements. When used in this press release, words such as IIP “expects”, “intends”, “plans”, “estimates”, “anticipates”, “believes” or “should” or their negative or similar terminology are generally intended to identify forward-looking statements. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. Investors should not place undue reliance on forward-looking statements. IIP disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
CSE has not reviewed, approved or disapproved of the contents of this press release.
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Innovative Industrial Properties, Inc.
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