Innovative Industrial Properties (NYSE:IIPR) has expanded its portfolio with the addition of new real estate in California. The company announced Wednesday it has acquired a property consisting of roughly 70,000 square feet of industrial space for $17.5 million, exclusive of transaction costs. It did not specify the site's location.

It did, however, reveal that it has already leased the property to Kings Garden, a privately held marijuana cultivation company active in the state that holds licenses not only for growing, but also production, processing, delivery, and distribution. Kings Garden and Innovative have a history together; this is the fifth property it has leased from the REIT.

Close up of 100 dollar bill with marijuana leaf atop it.

Image source: Getty Images.

In the press release heralding its latest deals, Innovative said Kings Garden is renting the new property under a long-term, triple net lease. It did not provide any further details, such as how much the tenant would be paying in rent.

Collectively, the four other properties Innovative rents to Kings Garden comprise roughly 102,000 square feet of industrial space.

Innovative is only publicly traded real estate investment trust (REIT) that specializes in properties for the cannabis industry. This latest transaction brought its total property count to 56.

Innovative sang the praises of its multi-property tenant in the press release. "We are thrilled to expand our long-term real estate partnership with a proven operator dedicated to excellence in product quality and operations," the REIT wrote.

Investors did not, however, seem to be impressed by Innovative's deal. They traded the REIT's shares down by almost 4.8% on Wednesday; that was a steeper fall than those posted by the major stock market indexes.

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