Innovative Industrial Properties Reports Resolution to Default by PharmaCann
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.
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IIP entered into amendments with PharmaCann with respect to nine of the Leases for properties located in
New York ,Illinois ,Pennsylvania ,Ohio , andColorado as follows:- Increased the total required security deposits, which will be paid pro-rata over thirty-six months commencing February 1, 2027.
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Reduced cumulative total base rent from
per month to$2.8 million per month, with cash rent payments commencing February 1, 2025.$2.6 million
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IIP entered into amendments with PharmaCann with respect to two of the Leases for cultivation properties in
Michigan andMassachusetts , as follows:- 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.
- 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
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Monthly base rent of
will be abated in full effective February 1, 2025.$1.3 million
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In consideration of IIP entering into the Lease amendments described above:
- Additional equity capital is being contributed to PharmaCann by certain of PharmaCann’s current investors.
- 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.
- 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
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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
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IIP Contact:
David Smith
Chief Financial Officer
Innovative Industrial Properties, Inc.
(858) 997-3332
Source: Innovative Industrial Properties, Inc.