An investor group led by Michael Mallozzi is suing cannabis REIT Innovative Industrial Properties IIPR over failed due diligence in its Kings Garden investment.
The plaintiffs claim IIP misled investors, was incompetent and broke securities laws, writes Green Market Report’s Debra Borchardt.
Mallozzi sued IIP in April 2022 and was joined by investors Alejandro Handal and Stephen Forrester.
“Between 2019-2021, IIPR purchased six California properties from Kings Garden, at prices far higher than Kings Garden had paid for the properties," according to the lawsuit.
"In total, IIPR invested approximately $150 million into Kings Garden cannabis farms. Kings Garden was one of IIPR’s largest operators, accounting for up to 10% of IIPR’s rental revenues.”
The lawsuit states that if IIPR had done proper due diligence it would have discovered that Swiss American Investment Corporation sued Kings Garden alleging that it had not paid out promised quarterly dividends.
The lawsuit alleges that because IIPR sued Kings Garden for fraud and RICO violations in July 2022, it cannot claim in one lawsuit that Kings Garden lied to them, and then in another that they had no idea Kings Garden was lying.
More details here Green Market Report.
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