Pelorus Equity Group Announces $19M Construction-Financing Loan With Cannabis Co. Item 9 Labs

Pelorus Equity Group, a provider of value-add bridge commercial real estate loans to cannabis businesses and owners with cannabis-related real estate, announced that its Pelorus Fund, a private mortgage real estate investment trust, has entered into a $19 million construction-financing loan with Item 9 Labs Corp. INLB, a vertically integrated, cannabis dispensary franchisor and operator that produces premium, award-winning products. 

The proceeds from Pelorus’ high-performance loan will be used to finance the acquisition of 44 acres of adjacent land next to Item 9 Labs’ 19,200 sq. ft. facility in Arizona, which has been operational since 2017.

The loan will also be used to finance the master site development. Construction of phase 1 consists of three additional steel buildings and two green houses. This initial expansion adds 9,600 sq. ft. for indoor cultivation, 9,600 sq. ft. of lab and packaging and a 9,600 sq. ft. head house to support the addition of the two 18,000 sq. ft. greenhouses. The total expansion will consist of six more buildings – one will be for expansion of the Company’s lab and support space for finished product, and the other five will be for indoor cultivation. Once complete, the Item 9 Labs site will comprise 640,000-plus sq. ft. of cannabis operations. 

In Nevada, Item 9 Labs will use the proceeds to complete its 20,000 sq. ft. state-of-the-art cultivation, manufacturing and lab facility and produce products for the Silver State’s marketplace.

The collective loan balance across Item 9 Labs’ subject properties in Arizona and Nevada provides for a principal amount of approximately $19 million at an annual interest rate of 16% over a term of 18 months. Construction is expected to be completed over the next three years, and will increase Item 9 Labs’ capabilities to meet the growing consumer marketplace and wholesale demands in Arizona and Nevada.  

“We’re thrilled to partner with Item 9 Labs on these exciting new commercial real estate expansion and build-out projects in Arizona and Nevada – two rapidly growing adult-use states with high demand,” said Dan Leimel, CEO of Pelorus Equity Group and manager of the Pelorus Fund. “Our team was pleased to quickly approve the Company’s loan, so that it can continue to bring consumers the premium products they are known for, generate new streams of revenue and drive value for their shareholders. We look forward to working closely with Item 9 Labs and other cannabis operators on additional state-of-the-art projects as we rapidly expand our portfolio.” 

“Pelorus moved quickly on our complex transaction and were able to help navigate multiple hurdles on the way to closing when other previous potential lenders failed to perform. With the Pelorus team by our side, supporting our growth plans, we’re in a sound position to complete our expansion and capture more market share,” said Bobby Mikkelsen, CFO of Item 9 Labs Corp.