GR Companies, one of the more prominent U.S. cannabis dispensary chain operators, will garner almost $20 million from a real estate contract it has concluded. The company has signed a sale-leaseback deal with privately held NewLake Capital Partners to sell 10 properties it owns, NewLake announced Wednesday.
In the first phase of the deal, six properties are changing hands. The remaining four should transfer ownership within 45 days, NewLake said.
GR Companies does business under the name Grassroots and will soon be owned by Curaleaf Holdings (CURLF -2.32%) if and when a long-pending acquisition goes through. Originally, the two companies agreed to the Curaleaf buyout last summer.
In the NewLake deal, Grassroots will reap $15.5 million for the real estate. It will also receive up to an additional $4.2 million from NewLake for improvements and refurbishments to the properties.
The properties are located in six states, and consist of nine medical dispensaries and one that sells recreational product. NewLake did not provide more detailed information about the locations.
A sale-leaseback deal is one in which a company sells a property (or properties) to an outside party, then leases it back from the new owner. Such arrangements have become increasingly common with marijuana companies, as these businesses are frequently loss-making and, consequently, in need of ready cash.
Grassroots is one of those companies. In NewLake's press release on the new arrangement, Grassroots was quoted as saying that "[t]hese sale-leaseback transactions have allowed us to leverage our valuable real estate in a non-dilutive manner and provide us with working capital to continue fueling the growth of our operations."
Curaleaf's share price was down very slightly in Wednesday trading.