Innovative Industrial Properties, Inc. (NYSE: IIPR), a cannabis-focused real estate company, closed on the acquisition of a New Jersey property and entered into a long-term lease with a subsidiary of Ascend Wellness Holdings, Inc. (OTCQX:AAWH) at the property.
The purchase price for the property was $35.4 million (excluding transaction costs). AWH is expected to complete additional improvements for the approximately 114,000 square foot property as a regulated cannabis cultivation and processing facility, for which IIP has agreed to provide reimbursement of up to $4.6 million. Assuming full reimbursement for the tenant improvements, IIP's total investment in the property is expected to be $40 million. AWH is planning to build out its overall New Jersey cultivation footprint to include a lab, kitchen and 150,000 square feet of canopy by the end of 2023.
In addition to this New Jersey property, IIP owns and leases to AWH three other properties in Illinois, Massachusetts and Michigan, with IIP's total investment in properties leased to AWH, including commitments to fund future tenant improvements, equaling approximately $179.75 million.
"Throughout these transformational years of AWH, we have greatly valued our long-term real estate partnership with IIP, working closely together to deliver optimal real estate capital solutions that have been instrumental in driving our expansion over time,” said Abner Kurtin, CEO and co-founder of Ascend Wellnes. “With IIP’s partnership, we look forward to significantly enhancing our production capacity in New Jersey, and bringing our award-winning products and exceptional service to patients and customers throughout the state.”
Paul Smithers, president and CEO of IIP said the company has been AWH's real estate partner since 2018 and is excited to continue to expand their relationship. "The AWH team continues to distinguish themselves in delivering the highest quality cannabis products and services to their patients and customers, and has developed a tremendous strategic footprint in some of the strongest regulated cannabis markets, including New Jersey," Smithers concluded.
