Cannabis-Focused REIT NewLake Capital: Q3 Revenue Spikes 135% YoY On Heels Of $102M IPO

NewLake Capital Partners, Inc. NLCP, a provider of real estate capital to state-licensed cannabis operators, announced its financial results Friday for the third quarter ended Sept. 30.

Based in New Canaan, Connecticut, the company debuted on the OTCQX Best Market under the symbol NLCP on Aug. 20. The net proceeds of approximately $102 million, before deducting placement agent fees and offering expenses, were contributed to its operating partnership, which will use them to acquire New Lake’s target assets.

“We recently funded our first post-IPO investment by deploying $30 million to Hero Diversified Associates, Inc.,” David Weinstein, the company’s CEO revealed. “Importantly, this transaction is indicative of our funding flexibility as we uniquely structured a nine-month senior secured loan that converts to a twenty-year sale-leaseback, unless a specific provision in the loan agreement is satisfied.”

Q3 2021 Financial Highlights

  • Revenue more than doubled, totaling $8.1 million, as compared to $3.4 million.
  • Net income attributable to common stockholders totaled $2.7 million or $0.14 per basic and diluted share, as compared to a net loss of $14.6 million.
  • Funds from operations totaled $5.2 million or $0.27 per basic and $0.26 per diluted share.
  • Adjusted funds from operations totaled $6 million or $0.31 per basic and diluted share.
  • As of Sept. 30, 2021, cash equivalents were $167.8 million, inclusive of proceeds generated from the closing of the company’s initial public offering in August 2021.
  • As of Sept. 30, $32.5 million was committed to funding tenant improvements.

Nine Months - 2021 Financial Highlights

  • Revenue totaled $19.2 million compared to $7.6 million in the same period of last year.
  • Net income attributable to common stockholders totaled $6.9 million or $0.44 per basic and diluted share as compared to a net loss of $13.6 million in the same period of 2020.
  • Funds from operations totaled $12.5 million or $0.80 per basic and diluted share.
  • Adjusted funds from operations totaled $14.3 million or $0.92 per basic and diluted share.

Recent Operational Highlights

  • As of Sept. 30, the company owned 27 properties with eight tenants across ten states. The properties are located in Arizona, Arkansas, Connecticut, Illinois, Florida, California, Massachusetts, North Dakota, Ohio, and Pennsylvania.
  • Subsequent to the quarter, the company provided a $30 million secured loan to Hero Diversified Associates, Inc. convertible into a twenty-year sale-leaseback on their Pennsylvania cultivation facility.

NLCP Price Action

NewLake Capital’s shares traded 1.03% higher at $29.31 per share at the time of writing Friday morning.

Photo: Courtesy of Tim Foster on Unsplash

Posted In: David Weinsteinthird quarter earningsCannabisEarningsNewsREITSmall BusinessMarketsReal Estate