We target medical-use cannabis facilities for acquisition, including sale-leaseback transactions, with tenants that are licensed growers under long-term triple-net leases. We believe this industry is poised for significant growth in coming years, and we are focused on
being a creative capital provider to this industry through the long-term ownership of cultivators’ mission-critical facilities.
A veteran of the Health Care Real Estate Investor Trust (REIT), Alan Gold, has created what will soon be the first publicly-traded cannabis REIT, Innovative Industrial Properties. The company, based in San Diego but incorporated in Maryland, filed an S-11 to go public on the NYSE. It plans to sell 8.75mm shares at $20 per share with a symbol of IIPR. Ladenburg Thalman is the lead underwriter.
Gold was a co-founder of Alexandria Realty (NYSE: ARE) and Biomed Realty Trust (formerly NYSE: BMR), which was acquired by Blackstone in a $7 billion transaction that closed in January. He will serve as Executive Chairman and will own over 10% of the company. CEO Paul Smithers will hold 232,500 shares. Gold has brought on board several other executives from BioMed Realty Trust, including CFO Robert Sistek, General Counsel Brian Wolfe and Director Gary Kreitzer, who was a co-founder of Biomed Realty Trust. The total number of shares, excluding potential exercise of a 1.3125mm share underwriters option, will be just over 10mm shares, valuing the company at over $200mm at the proposed IPO price.
The company’s first tenant will be PharmaCann, one of the five licensed cannabis companies in New York, which will sell and lease back its 127K s.f. facility in New York for $30mm. The company expects its acquisitions will be between $5mm and $30mm and has identified over $88mm in potential additional acquisitions thus far.
While there have been some public companies with business models aimed at helping cannabis companies buy buying real estate and leasing it back, this is the first public offering of a REIT focused on the cannabis industry. The company expects to focus on New York, Illinois, Maryland, California, Arizona, Washington, Nevada, Massachusetts and Oregon. The Innovative Industrial Properties IPO, if successful, will allow mainstream investors to participate in the cannabis industry indirectly and will provide much needed capital to the industry.