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Innovative Industrial Raises Funding for Toledo Property

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Innovative Industrial Properties (IIPR - Free Report) recently announced entering into an amendment of lease with a subsidiary of Green Thumb Industries Inc. at a property in Toledo, OH, offering an additional funding of $25 million. This financing will support the expansion of Green Thumb’s existing medical cannabis-processing facility on the property with the construction of a cannabis cultivation facility.

The latest move has also adjusted the base rent under the lease to incorporate the impact of additional available funding. Considering full payment of the supplementary funding, cannabis-focused real estate company Innovative Industrial Properties’ total investment in the property will be worth $32.2 million.

The partnership with Green Thumb, a national cannabis consumer packaged goods company, and retailer with 13 manufacturing facilities, licenses for 96 retail locations and operations across 12 U.S. markets, will help Innovative Industrial Properties bank on the solid market fundamentals. Green Thumb presently owns and operates national retail cannabis stores called Rise™ and Essence. It manufactures and distributes a portfolio of branded cannabis products including Beboe, Dogwalkers, Dr. Solomon’s, incredibles, Rythm and The Feel Collection.

Along with this Toledo property, Innovative Industrial Properties owns and leases regulated cannabis cultivation and processing facilities in Oglesby, IL and Danville, PA, to Green Thumb, resulting in $121.8 million of total investment in properties leased to Green Thumb.

The legalization of marijuana’s medical use across several states, as well as the permission of recreational consumption in some, has opened up opportunities for the cannabis industry. Thus, with more states in the United States giving cannabis the green light, Innovative Industrial Properties has incentives to partner with experienced medical-use cannabis operators and serve as a vital source of capital by acquiring and leasing back their real-estate assets. Its strategy is to acquire the existing, redeveloped and under-development industrial buildings, including attached enclosed greenhouse facilities.

In Ohio, medical-use cannabis dispensaries, particularly, made their first sales in 2019. Moreover, since inception and through August 2020, more than 130,000 patients and 14,000 caregivers have registered for the state’s medical cannabis program, generating more than $175 million in product sales, per the Ohio Board of Pharmacy.

Innovative Industrial Properties currently carries a Zacks Rank #3 (Hold). Over the past three months, shares of the company have outperformed the industry. The stock has rallied 29.9% compared with the industry’s increase of 2.1%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Alpine Income Property Trust, Inc.’s (PINE - Free Report) funds from operations (FFO) per share estimate for 2020 has been revised 4.4% upward to $1.18 over the past month. It currently sports a Zacks Rank of 1.

Duke Realty Corporation’s Zacks Consensus Estimate for the current-year FFO per share moved up 2.8% to $1.49 over the past two months. The company currently holds a Zacks Rank of 2.

Stag Industrial, Inc. (STAG - Free Report) FFO per share estimate for the ongoing year has moved 1.1% north to $1.86 over the past two months. It currently carries a Zacks Rank of 2.

Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.

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