IIPR Innovative Industrial Properties Inc

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): January 28, 2025

 

 

Innovative Industrial Properties, Inc.

(Exact name of registrant as specified in its charter)

 

 

Maryland		001-37949		81-2963381
(State or Other Jurisdiction of Incorporation)		(Commission File No.)		(I.R.S. Employer Identification No.)

 

1389 Center Drive, Suite 200

Park City, UT 84098

(Address of principal executive offices, including zip code)

 

Registrant’s telephone number, including area code: (858) 997-3332

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).                  Emerging growth company ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

Securities Registered pursuant to Section 12(b) of the Act:

 

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $0.001 per share		IIPR		New York Stock Exchange
Series A Preferred Stock, par value $0.001 per share		IIPR-PA		New York Stock Exchange

 

 

Item 7.01 Regulation FD Disclosure.

 

On January 30, 2025, Innovative Industrial Properties, Inc. (the “Company”) announced that it has reached an agreement with PharmaCann Inc. and its affiliates (collectively, PharmaCann) to resolve PharmaCann’s existing defaults under leases for eleven properties that the Company owns, previously announced by the Company on December 20, 2024. A copy of the press release is attached hereto as Exhibit 99.1.

 

The information in this Form 8-K and Exhibits attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.

 

Item 9.01 Financial Statements and Exhibits.

 

(d)

Exhibits

 

Exhibit Number		Description of Exhibit
99.1		Press release of the Company, dated January 30, 2025.
104		Cover Page Interactive Data File (embedded within the Inline XBRL document).

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Date: January 30, 2025	INNOVATIVE INDUSTRIAL PROPERTIES, INC.
	By:	/s/ David Smith
	Name:	David Smith
	Title:	Chief Financial Officer

 

Exhibit 99.1

 

Innovative Industrial Properties Reports Resolution to Default by PharmaCann

 

SAN DIEGO, CA – January 30, 2025 – Innovative Industrial Properties, Inc. (IIP), the first and only real estate company on the New York Stock Exchange (NYSE: IIPR) focused on the regulated U.S. cannabis industry, announced today that it has reached an agreement with PharmaCann Inc. and its affiliates (collectively, PharmaCann) to resolve PharmaCann’s existing defaults under leases for eleven properties that the Company owns (collectively, the “Leases”), previously announced by IIP on December 20, 2024.

 

The key terms of the agreement between PharmaCann and IIP are as follows:

·

IIP fully utilized security deposits held by it under all Leases for the payment in full of defaulted rent for December 2024 and January 2025 and certain penalties.

·

IIP entered into amendments with PharmaCann with respect to nine of the Leases for properties located in New York, Illinois, Pennsylvania, Ohio, and Colorado as follows:

o

Increased the total required security deposits, which will be paid pro-rata over thirty-six months commencing February 1, 2027.

o

Reduced cumulative total base rent from $2.8 million per month to $2.6 million per month, with cash rent payments commencing February 1, 2025.

·

IIP entered into amendments with PharmaCann with respect to two of the Leases for cultivation properties in Michigan and Massachusetts, as follows:

o

PharmaCann will work with IIP to transition the properties to new tenant(s) by contributing the licenses, subject to regulatory requirements, and providing other support as requested by IIP.

o

If the properties have not been transitioned to new tenant(s) by August 1, 2025, IIP will regain full control and PharmaCann will have no further obligations under the Leases for these properties

o

Monthly base rent of $1.3 million will be abated in full effective February 1, 2025.

·

In consideration of IIP entering into the Lease amendments described above:

o

Additional equity capital is being contributed to PharmaCann by certain of PharmaCann’s current investors.

o

PharmaCann issued an interest-bearing, secured promissory note to IIP (the “Note”), which matures February 1, 2035 (or earlier upon a change of control or certain other events). The Note is junior to PharmaCann’s existing senior secured facility and is secured by all of PharmaCann’s assets, including licenses, where allowed by law.

o

PharmaCann agreed that, except for refinancing the existing senior secured credit facility and the additional equity investments, it may not incur additional indebtedness without IIP’s consent until full repayment of the Note or its cancellation.

·

If PharmaCann is not able to refinance its existing senior secured credit facility maturing June 30, 2025, all modifications to the Leases described herein will immediately be null and void and the Leases will revert to the terms in effect as of January 1, 2025 and the Note will be cancelled.

 

The transactions described above, including the amendments to the Leases, became effective on January 28, 2025. Effective as of such date and excluding the Leases for the Michigan and Massachusetts cultivation properties, IIP leases to PharmaCann nine properties in five states, comprised of 434,000 square feet and representing total invested and committed capital of approximately $223 million, inclusive of the unfunded tenant improvement allowance in the New York cultivation lease.

 

 

About Innovative Industrial Properties

 

Innovative Industrial Properties, Inc. is a self-advised Maryland corporation focused on the acquisition, ownership and management of specialized industrial properties leased to experienced, state-licensed operators for their regulated cannabis facilities. Innovative Industrial Properties, Inc. has elected to be taxed as a real estate investment trust, commencing with the year ended December 31, 2017. Additional information is available at www.innovativeindustrialproperties.com.

 

 

Innovative Industrial Properties Forward-Looking Statements

 

This press release contains statements that IIP believes to be “forward-looking statements” within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than historical facts, including, without limitation, statements regarding PharmaCann’s observance of the amended terms of the Leases, including payment of rent and replenishment of security deposits; IIP’s ability to re-lease its cultivation properties in Michigan and Massachusetts that are currently leased to PharmaCann and PharmaCann’s assistance with such process; IIP’s receipt of any payments under the Note, are forward-looking statements. When used in this press release, words such as IIP “expects,” “intends,” “plans,” “estimates,” “anticipates,” “believes” or “should” or the negative thereof or similar terminology are generally intended to identify forward-looking statements. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in, or implied by, such statements. Investors should not place undue reliance upon forward-looking statements. IIP disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

 

IIP Contact:

David Smith

Chief Financial Officer

Innovative Industrial Properties, Inc.

(858) 997-3332

 

 

v3.24.4

Cover	Jan. 28, 2025
Document Information [Line Items]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Jan. 28, 2025
Entity File Number	001-37949
Entity Registrant Name	Innovative Industrial Properties, Inc.
Entity Central Index Key	0001677576
Entity Tax Identification Number	81-2963381
Entity Incorporation, State or Country Code	MD
Entity Address, Address Line One	1389 Center Drive
Entity Address, Address Line Two	Suite 200
Entity Address, City or Town	Park City
Entity Address, State or Province	UT
Entity Address, Postal Zip Code	84098
City Area Code	858
Local Phone Number	997-3332
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false
Common Stock [Member]
Document Information [Line Items]
Title of 12(b) Security	Common Stock, par value $0.001 per share
Trading Symbol	IIPR
Security Exchange Name	NYSE
Series A Preferred Stock [Member]
Document Information [Line Items]
Title of 12(b) Security	Series A Preferred Stock, par value $0.001 per share
Trading Symbol	IIPR-PA
Security Exchange Name	NYSE

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