One thing cannabis companies can’t have enough of is cultivation space. Hoping to meet the demands of the medical and recreational markets, companies literally need space to grow. Securing the ideal property for cultivation, therefore, is crucial. And that’s where Innovative Industrial Properties, Inc. comes in, specializing in leasing properties for medical-use cannabis facilities. And as the California real estate company expands into Massachusetts cultivation, it’s hoping to build partnerships with some of the largest medical cannabis providers in the U.S.
Innovative Industrial Properties Wins Second Deal With PharmaCann
PharmaCann LLC is one of the largest medical cannabis providers in the country. The company already has nine dispensary locations and three production facilities across multiple states.
Still, as legal markets expand in the U.S., PharmaCann is looking to expand with them. To do so, the company has turned to the same firm which secured their 2016 lease of a medical cannabis cultivation and processing facility in New York, Innovative Industrial Properties.
Innovative Industrial Properties is a San Diego-based real estate firm that helps cannabis companies find properties for their operations. Specifically, the company focuses on acquiring, managing and leasing industrial properties to state-licensed cannabis producers.
And on May 31, IIP announced that it had closed on acquiring a Massachusetts property and entered into a long-term lease and development agreement with one of PharmaCann’s subsidiaries.
“IIP has been a strong partner since acquiring our New York property in 2016, and we look forward to working closely with IIP for the development of this property in the months to come,” said CEO of PharmaCann Teddy Scott.
The property includes both a 26,000 sq. ft. industrial facility and a 32,000 sq. ft. greenhouse facility.
PharmaCann Sets Up Shop In Massachusetts
PharmaCann already operates a medical-use cannabis dispensary in Massachusetts. The state has already granted provisional approval to the company to cultivate and process medical cannabis at their new property. Additionally, Massachusetts has given the company approval to dispense at two other locations in the state.
“We are thrilled to begin our work in Massachusetts to bring our products to patients throughout the state,” said Scott.
Before PharaCann can start producing and selling, however, it needs to build. The company’s subsidiary has submitted plans to construct two buildings at the Holliston, MA property.
And as per the lease agreement, Innovative Industrial Properties will fully reimburse PharmaCann for the construction. The lease allows for “Construction Funding” up to $15.5 million. Additionally, IIP paid $3 million to purchase the property, bringing their total investment to $18.5 million.
The terms of the long-term, triple-net lease specify an initial term of 15.25 years with options to extend. The lease lists and annualized aggregate base rent of $2,682,500, subject to a 3.25 percent annual increase, according to BusinessWire.
California Real Estate Company Expands Into Massachusetts Cultivation
As cannabis companies continue to pursue avenues for growth, companies in other industries have an opportunity to build lasting, mutually beneficial partnerships.
“We are very pleased to extend our relationship with PharmaCann and support their continued growth into new states,” said PharmaCann president and CEO Paul Smithers.