Green Thumb Industries will be selling and leasing back its Oglesby, Illinois cultivation and processing facility
Green Thumb Industries Inc, a leading national cannabis consumer packaged goods company and owner of Rise™ and Essence retail stores, today announced it has closed on a transaction to sell its Oglesby, Illinois cultivation and processing facility to Innovative Industrial Properties (IIP) (NYSE: IIPR). GTI will lease back the facility via a long-term agreement and continue to operate and manage it.
IIP's total investment in the property will be $50 million, assuming full reimbursement for significant facility and capacity enhancements of up to $41 million as well as the $9 million purchase price for the property, excluding transaction costs.
This marks GTI's third transaction with IIP, following sale-leasebacks for GTI's cannabis cultivation and processing facility in Danville, Pennsylvania completed in November 2019 and its Toledo, Ohio processing facility in February 2020.
"We are thrilled to expand our relationship with Green Thumb, one of the country's leading regulated cannabis operators"Paul Smithers, President and Chief Executive Officer of IIP.
"The highest ROIC in global cannabis today is in wholesale capacity expansion in our home state of Illinois," said GTI Founder and CEO Ben Kovler.
"IIP is a proven long-term real estate capital partner and provides us with another flexible real estate capital solution that allows us to put our capital to work in the best way possible. With the introduction of Illinois' adult-use cannabis program this year, we continue to ramp up production to meet the demand from cannabis consumers and patients."
In addition to the manufacturing facility in Oglesby, GTI owns a cultivation and processing facility in Rock Island and seven stores throughout Illinois with licenses to open three additional retail locations. Adult-use cannabis sales began in Illinois on January 1st, and have generated nearly $75 million in revenue in the first two months and over $10 million in tax revenue in the month of January.
Medical sales in January were approximately $25 million. Experts estimate the Illinois market potential is $2.5 billion or more after maturation.
"This investment enables GTI to significantly expand their consumer products manufacturing capacity and reflects our belief in their continued success in serving the growing demand."
To learn more about Green Thumb Industries visit their Company HQ here.
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