Green Thumb Industries has closed transaction to sell its Ohio facility to Innovative Industrial Properties.
Green Thumb Industries Inc.(CSE: GTII), 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 Toledo, Ohio processing facility to Innovative Industrial Properties (NYSE: IIPR). GTI will lease back the facility via a long-term agreement and continue to operate and manage it.
The purchase price for the property was $2.9 million, excluding transaction costs. GTI is also expected to make certain improvements to the property that will significantly enhance production capacity, for which IIP has agreed to provide reimbursement of up to $4.3 million. Assuming full reimbursement for such improvements, IIP's total investment in the property will be $7.2 million. This marks IIP's second transaction with GTI, following a sale-leaseback for GTI's cannabis cultivation and processing facility in Danville, Pennsylvania completed in November 2019.
IIP provides a flexible real estate capital solution that effectively addresses our expansion needs at the processing facility in Toledo GTI Founder and CEO Ben Kovler
Ben Kovler went on to say that "we plan to use the proceeds for strategic initiatives and capacity expansion projects."
In addition to the manufacturing facility in Toledo, GTI owns and operates four Rise™ stores in Ohio in Toledo, Cleveland, Lorain and Lakewood, with another store in Lakewood expected to open during the first quarter of 2020. Medical cannabis sales began in Ohio in 2019, and as of the end of December, nearly 80,000 patients and over 8,000 caregivers had been registered for the state's medical cannabis program, generating approximately $60 million during the first year of sales, with 50 percent of those revenues coming in the last quarter of 2019.
"We are proud to team again with Green Thumb as its real estate capital partner for GTI's licensed medical cannabis processing facility in Ohio, having teamed with GTI on its Pennsylvania cultivation and processing facility this past November," said Paul Smithers, President and Chief Executive Officer of IIP.
"GTI continues to distinguish itself with its cannabis product offerings and dedication to patient experience and right to well-being, providing safe, high quality cannabis products in a compassionate environment. We also commend them on the strength of their commitment to the communities in which they operate, including their recent announcement that over 200 social equity applicants have participated in GTI's Social Equity Licensing Education Assistance Program (LEAP), providing pro bono mentoring and programming for Illinois craft grower, infuser and transporter licenses."
To learn more about GTI visit their company HQ here.
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