Innovative Industrial Properties Inc. closed on the final parcel of a four-property portfolio in southern California, which comprises approximately 79,000 square feet of industrial space in total.
The purchase price for the southern California portfolio was approximately $17.3 million in the aggregate.
Concurrent with the closing of the purchase, IIP entered into a long-term, triple-net lease at each property with a subsidiary of Medical Investor Holdings LLC for continued operation as licensed cannabis cultivation, extraction, manufacturing and distribution facilities in accordance with California regulations.
As the pioneering real estate investment trust 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 thrilled to add Vertical and its strong management team to our tenant roster,” said Paul Smithers, President and Chief Executive Officer of IIP. “With its breadth of cannabis brands and highly experienced team, Vertical is well-positioned to capitalize on the tremendous growth of the California regulated cannabis industry in the many years to come, and we look forward to continuing to support Vertical and its long-term growth initiatives.”
Vertical is a multi-state operator licensed for cannabis cultivation, extraction, manufacturing and distribution in California and cultivation operations in Arizona and Ohio, with an extensive portfolio of branded cannabis products. Vertical’s management team has decades of experience in starting, building and running highly successful businesses in the alcohol, agriculture, consumer product goods, distribution, entertainment, food healthcare and medical industries.
“This strategic transaction with IIP allows us to unlock our capital tied to our real estate and redeploy those proceeds into the tremendous opportunities we see ahead in the cannabis industry, in California and beyond,” said Bill Sutman, CFO of Vertical.
Smoke Wallin, Vertical’s Vice Chairman and CEO of Vertical Wellness, added, “With our vertical integration in California and the strength of our brand portfolio across all form factors, we believe our brands will emerge as the preferred products across a broad spectrum of retail customers and target consumers. We look forward to exploring additional ways to partner with IIP as a real estate capital partner as our company continues scale our operations.”