Cannabis REIT Enters Sale-Leaseback Deal With Green Thumb Industries For Illinois Property

Cannabis-focused REIT Innovative Industrial Properties, Inc. IIPR reported Monday it has sealed a sale-leaseback transaction with Green Thumb Industries Inc. GTBIFGTII for its Illinois facility.

Green Thumb Industries is a cannabis consumer packaged goods company with 13 production facilities, and licenses for 96 retail locations. It's also an owner of Rise and Essence retail stores.

Per the deal, the purchase price was set at $9 million, without transaction cost. In addition, Green Thumb Industries is supposed to make specific enhancements on the property that should be sponsored by Innovative Industrial Properties in the amount of up to $41 million. Complete reimbursements would make Innovative Industrial Properties’ total investment in the property $50 million.

The new transaction deal is the third one between Innovative Industrial Properties and Green Thumb Industries, with previous ones being in connection with a facility in Pennsylvania, and a facility in Ohio.

 "Expanding production in our home state of Illinois is the best investment we can make into the business and the smartest allocation of capital given the state is short on supply," Chief Strategy Officer Jennifer Dooley told Bebzubga. "This transaction will allow us to increase access to well-being by helping to meet the tidal wave of demand for cannabis amid the roll-out of adult use sales in Illinois."

Green Thumb Industries To Open Second Recreational-Only Dispensary In Illinois

"We are thrilled to expand our relationship with Green Thumb, one of the country’s leading regulated cannabis operators," Paul Smithers, President and CEO of IIP said in a statement. "This investment enables GTI to significantly expand their consumer products manufacturing capacity and reflects our belief in their continued success in serving the growing demand."

GTI Founder and CEO Ben Kovler, also commented on the transaction.

"The highest ROIC in global cannabis today is in wholesale capacity expansion in our home state of Illinois," he said. "IIP is a proven long-term real estate capital partner and provides us with another flexible real estate capital solution that allows us to put our capital to work in the best way possible. With the introduction of Illinois’ adult-use cannabis program this year, we continue to ramp up production to meet the demand from cannabis consumers and patients."