Innovative Industrial Properties (IIPR 0.49%) and Green Thumb Industries (GTBIF -1.49%) have signed a new sale-leaseback deal, the two companies announced in separate press releases Monday. The former is purchasing a growth and processing facility in Oglesby, Illinois, from the latter for $9 million, excluding transaction costs. Green Thumb will continue to operate the property as a tenant. 

Innovative, the only publicly traded real estate investment trust (REIT) specializing in properties for the cannabis industry, will also reimburse Green Thumb for up to $41 million for improvements to the facility.

Illinois road sign with cannabis leaf.

Image source: Getty Images

Illinois, where Green Thumb is headquartered, is the hottest legal cannabis market in America just now. Since legal retail sales for recreational use kicked off there at the beginning of the year, sales of been brisk across the state. Green Thumb has been a beneficiary, as it operates seven dispensaries in Illinois, plus a pair of growth and processing facilities. (The other is in Rock Island.)

"The highest [return on invested capital] in global cannabis today is in wholesale capacity expansion in our home state of Illinois," Green Thumb said in its press release.

"With the introduction of Illinois' adult-use cannabis program this year, we continue to ramp up production to meet the demand from cannabis consumers and patients," the company added.

Sale-leaseback deals, under which a business sells its real estate to a third party which then leases it back to the former owner, are a popular method of securing financing in the cash-strapped marijuana industry

This is the third such deal between Innovative and Green Thumb Industries. The other two are for facilities in Pennsylvania and Ohio.

In just before the close of trading on Monday, Innovative's shares were down by more than 11%. Green Thumb's had fallen by more than 13%. The broader market, as measured by the S&P 500, was off 7.6%.