Cannabis-focused real estate company Innovative Industrial Properties, Inc. (NYSE: IIPR)
acquired a property in Illinois for $6.5 million and signed a long-term lease with a subsidiary of 4Front Ventures Corp. FFNT FFNTF.
Under the deal, 4Front plans to build around 250,000 sq. ft. of industrial space at the property, for which IIP agreed to provide reimbursement of up to $43.75 million. With the full compensation for the construction, IPP’s total investment in the property would amount to $50.25 million (minus transaction expenses).
After construction operations at the property are finalized, 4Front intends to run it as a licensed cannabis cultivation and processing facility.
“We are thrilled to expand our long-term real estate partnership with 4Front with this new ground-up development project in Illinois,” Paul Smithers, president and CEO of IIP stated. “We look forward to working closely with the 4Front team in the coming months on the development of this state-of-the-art facility, which we expect will provide 4Front with tremendous, cost-effective scalability and a highly controlled environment for production of the quality products that 4Front is known for. New Frontier projects Illinois to be in the top three states for regulated cannabis sales by 2025, and we believe 4Front will be well-positioned to meet that continued demand growth.”
The Illinois property marks the third cannabis facility that IIP owns and leases to subsidiaries of 4Front; previous properties are in Massachusetts and Washington. With full compensation for tenant improvements for the property in Illinois, IIP’s total investment in properties leased to 4Fronts is around $83.25 million, encompassing some 431,000 sq. ft.
“We are excited to expand our partnership with IIP as the Illinois marketplace continues its record-breaking sales streak,” Leo Gontmakher, CEO of 4Front stated. “This next-generation cultivation and manufacturing facility will not only allow us to best meet the state’s robust market demand, but it will also broaden the reach of our innovative, low-cost cultivation and manufacturing methodologies.”
IIP’s shares closed Tuesday market session 0.25% lower at $213.54 per share.
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