Innovative Industrial Properties (NYSE:IIPR), the lone publicly traded real estate investment trust (REIT) specializing in the cannabis industry, is adding another asset to its portfolio.

The company announced Wednesday that it has closed the acquisition of a property in Richmond, Virginia. Innovative made the purchase  for roughly $11.8 million, not including transaction costs. That amount also does not include potential reimbursement of around $8.0 million once development is completed.

Marijuana in a corporate grow space.

Image source: Getty Images.

The deal is a sale-leaseback arrangement with a privately held company called Green Leaf Medical, one of five holders of a comprehensive license to grow, extract, and sell medical cannabis in Virginia.

Sale-leaseback arrangements are common in the real estate world; they refer to an investor buying a property from a company then leasing it back to the seller. Cannabis companies find them attractive because they often provide a good source of much-needed funding.

This is not Innovative's first deal with Green Leaf Medical. Previously, the two entered into a sale-leaseback arrangement for a similar property in Pennsylvania.

Once fully developed, the Richmond real estate is expected to boast around 82,000 square feet of industrial space. It will be used by Green Leaf Medical for growing, processing, and distributing medical cannabis under its gLeaf brand.

As of Wednesday, Innovative had 47 properties in 15 U.S. states, covering roughly 3.1 million rentable square feet. Occupancy is just under 99%.

Innovative, considered a unique marijuana stock because it's the only cannabis industry REIT, saw its share price dip by almost 2% on the day the Virginia deal was announced.

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