Please ensure Javascript is enabled for purposes of website accessibility

Innovative Industrial Properties Strikes a New Deal With Green Thumb Industries

By Joe Tenebruso – Feb 3, 2020 at 1:52PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The marijuana-focused REIT is expanding its partnership with the cannabis cultivator and retailer.

Innovative Industrial Properties (IIPR 0.47%) is growing its weed-fueled empire.

The cannabis-focused real estate investment trust (REIT) announced a new sale-leaseback deal with marijuana grower, processor, and retailer Green Thumb Industries (GTBIF 1.08%) on Monday. IIP is purchasing a licensed cannabis processing facility in Ohio from GTI for $2.9 million plus transaction costs. IIP will then lease the property back to GTI, and pay for up to $4.3 million in tenant improvements.

A person holding a cannabis plant

Image source: Getty Images.

By acquiring properties from licensed cannabis companies and then leasing them back to the sellers, IIP serves as a valuable source of difficult-to-obtain growth funding for participants in the marijuana industry.

"IIP provides a flexible real estate capital solution that effectively addresses our expansion needs at the processing facility in Toledo," GTI founder and CEO Ben Kovler said in a press release. "We plan to use the proceeds for strategic initiatives and capacity expansion projects."

The deal is the second sale-leaseback transaction between IIP and GTI. The first occurred in November, when IIP acquired GTI's cannabis processing facility in Pennsylvania.

"We are proud to team again with Green Thumb as its real estate capital partner," IIP CEP Paul Smithers said. "GTI continues to distinguish itself with its cannabis product offerings and dedication to patient experience and right to well-being, providing safe, high-quality cannabis products in a compassionate environment."

This deal is unlikely to be the last between the two companies. GTI has several other cannabis manufacturing facilities that could provide the real estate for additional sale-leaseback transactions -- and the fast-growing marijuana company is likely to require more capital to fuel its expansion initiatives.

Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool recommends Innovative Industrial Properties. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Innovative Industrial Properties Stock Quote
Innovative Industrial Properties
IIPR
$88.50 (0.47%) $0.41
Green Thumb Industries Stock Quote
Green Thumb Industries
GTBIF
$9.37 (1.08%) $0.10

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
326%
 
S&P 500 Returns
102%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/02/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.