Innovative Industrial Properties Acquires Michigan Property and Enters Into Long-Term Lease with Emerald Growth Partners
Innovative Industrial Properties, Inc. (IIP), the first and only real estate company on the New York Stock Exchange (NYSE: IIPR) focused on the regulated U.S. cannabis industry, announced today that it closed on the acquisition of a property in Harrison, Michigan, which comprises approximately 45,000 square feet of industrial space.
The purchase price for the Michigan property was approximately $6.9 million (excluding transaction costs). Concurrent with the closing of the purchase, IIP entered into a long-term, triple-net lease agreement with an affiliate of Emerald Growth Partners L.L.C. (EGP), which intends to operate the property as a licensed medical-use cannabis cultivation and processing facility upon completion of redevelopment. EGP is expected to complete tenant improvements for the building, for which IIP has agreed to provide reimbursement of up to approximately $3.1 million. Assuming full reimbursement for the tenant improvements, IIP’s total investment in the property will be approximately $10.0 million.
As the pioneering real estate investment trust (REIT) for the medical-use cannabis industry, IIP partners with experienced medical-use cannabis operators and serves as a source of capital by acquiring and leasing back their real estate assets, in addition to offering other creative real estate-based capital solutions.
“We are pleased to add EGP and its strong management team to our premier tenant roster,” said Paul Smithers, President and Chief Executive Officer of IIP. “EGP is well-positioned for success, with its depth of industry experience and expected large-scale vertical integration, and we look forward to supporting EGP through the redevelopment of the Harrison facility and the launch of its Pleasantrees retail locations throughout the state.”
EGP received pre-qualification status for full vertical integration by the Michigan Marijuana Regulatory Agency for four “Class C” cultivation licenses, one “Class A” cultivation license, one processor license, and twelve provisioning center licenses. EGP has raised approximately $20 million from investors to date as it prepares to commence fully licensed operations in the state. EGP is led by its Chief Executive Officer and Founder, Randall Buchman, an industry veteran appointed by Governor Rick Snyder last year to the state’s Marijuana Advisory Panel to represent cultivators.