Benzinga | Oct 18, 2021 09:17AM EDT

Cannabis REIT IIP Acquires Property in California, Undertakes Long-Term Lease With Gold Flora

Innovative Industrial Properties, Inc. (NYSE:IIPR) announced Monday it has completed the acquisition of a 201,000 square foot industrial property in Desert Hot Springs, California

and entered into a long-term lease with Gold Flora, LLC.

The San Diego-based cannabis real estate company agreed to pay $51 million as consideration for the acquisition, excluding transaction costs.

Gold Flora is expected to complete additional tenant improvements for the property as a regulated cannabis cultivation and processing facility, for which IIP has agreed to provide reimbursement of up to $9 million, bringing IIP's total investment in the property to $60 million.

"We are excited to welcome Laurie and the Gold Flora team as our newest tenant partner," Paul Smithers, president and CEO of IIP said Monday. "Gold Flora has established a strong reputation and presence in the largest regulated cannabis market in the world, California, and we look forward to supporting them as a long-term real estate capital partner for many years to come, as they continue to expand the breadth of their operations and reach throughout the state."

As of October 18, 2021, IIP owned 76 properties across 19 states, representing a total of roughly 7.5 million rentable square feet.

Gold Flora, a vertically integrated operator in California, was founded in 2017. Earlier this year, Gold Flora teamed up with Stately Brands.

The partnership included establishing an advisory board to Gold Flora and financing to further expand Gold Flora's retail operations, brands and distribution network.

"Teaming with IIP on this transaction strategically unlocks capital for us as we focus on our continued growth in California, and we look forward to working with the IIP team for many years to come as our go-to real estate capital provider," Laurie Holcomb, CEO of Gold Flora, commented on the transaction.

IIPR Price Action

IIPR's shares traded 3.95 higher at $243 per share during the pre-market session on Monday morning.

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