Multistate operator 4Front Ventures is utilizing a $30 million sale-leaseback transaction to rid itself of debt to a corporate lender, the company said.
The all-cash deal with California-based Innovative Industrial Properties (IIP) involves the sale of cultivation and production facilities owned by 4Front in Tumwater, Washington. and Georgetown, Massachusetts.
IIP will then lease the facilities back to 4Front under 20-year lease agreements so the Arizona company can continue to use them.
The money will be used by 4Front to “pay down the outstanding senior secured debt obligation to affiliates of Gotham Green Partners” of California, according to a news release.
4Front CEO Leo Gonthmaker said in a statement that the move will help shore up the company’s balance sheet and give the business more flexibility to “fund our growth initiatives” in its core markets of California, Illinois, Massachusetts, Michigan and Washington state.
The deal, expected to close by December, is only the latest that Innovative Industrial Properties has entered into in the cannabis arena.
IIP has been on a buying spree for most of 2020 in the marijuana industry, having entered into similar deals with Green Thumb Industries, Parallel, Curaleaf, Cresco Labs, Kings Garden, Ascend Wellness Holdings and Trulieve, to name a few.
As of August, the REIT owned 61 cannabis real estate properties.
Innovative Industrial Properties lists as IIPR on the New York Stock Exchange.