Marijuana Business Magazine May-June 2020

Marijuana Business Magazine | May-June 2020 22 By Omar Sacirbey Green Thumb Leaseback Multistate marijuana operator Green Thumb Industries announced in March that it sold an Illinois cultivation and processing facility to San Diego-based Innovative Industrial Properties in a sale-leaseback deal valued up to $50 million. Innovative Industrial Properties specializes in real estate acquisitions of marijuana properties. IIP paid $9 million for the location in Oglesby, Illinois, and plans to make up to $41 million in upgrades to the property. This is the largest of three sale-leaseback deals Chicago-based Green Thumb has done with the California-based real estate investment trust. The previous record for a sale-leaseback between the two companies was valued at $39.6 million last November and involved a cultivation plant in Pennsylvania. In February, Green Thumb and IIP completed a $7.2 million sale-leaseback for a facility in Toledo, Ohio. BR Brands to Merge With Dixie Connecticut-based marijuana firm BR Brands announced it will merge with Dixie Brands , a Denver manufacturer of cannabis-infused products and a consumer packaged goods company, in a $43 million reverse takeover. Under terms of the transaction, BR Brands will own 80% of the merged company and Dixie shareholders will possess the remaining 20%. The transaction is expected to be completed in the third quarter of 2020. The merger marks BR Brands’ second foray into the Colorado market in the past sixth months. Chuck Smith, CEO and president of Dixie, said the “challenges of the current cannabis-related markets” prompted the 10-year-old company to seek a “strategic partner” for its long-term growth. Smith will serve as CEO and president of the merged company. If the merger is not consummated, Dixie would owe BR Brands a $6.5 million breakup fee. REIT Buys Ascend Wellness Facility in Sale-Leaseback Deal Innovative Industrial Properties , a real estate investment trust that specializes in the marijuana industry, bought a cannabis cultivation and processing facility in Massachusetts from Ascend Wellness Holdings (AWH) in a $49 million sale-leaseback deal. San Diego-based IIP paid $26.8 million to Boston- based AWH, a vertically integrated multistate operator, for a 199,000-square-foot facility in Athol, Massachusetts. The cannabis processed at the facility can be sold for both adult-use and medical MJ markets, an AWH spokeswoman told Marijuana Business Daily . IIP also agreed to reimburse Ascend Wellness for up to $22.2 million in tenant improvements, bringing the deal total to $49 million. AWH has agreed to pay the REIT an initial rent rate of 13.5% on the initial purchase price and tenant improvement allowance. This marks the third—and largest—sale- leaseback deal IIP has done with Ascend Wellness. Ascend Wellness has raised $100 million in capital since 2018, including a $55 million raise in February 2019 to be used for expansion. Innovate Industrial Properties trades on the New York Stock Exchange as IIPR. Harvest Acquisition Multistate marijuana operator Harvest Health & Recreation announced it closed on a previously announced $25.5 million purchase of Pennsylvania medical cannabis company Franklin Labs . The closing came a day after Harvest revealed it would no longer buy Chicago-based Verano Holdings, which was for a time one of the biggest acquisitions announced in the U.S. cannabis industry. For the most recent deal, Phoenix-based Harvest paid $15.5 million in cash and a $10 million promissory note for Franklin Labs , a subsidiary of Pennsylvania- based CannaPharmacy . In April 2019, Harvest said it would buy all of CannaPharmacy, a vertically integrated marijuana company. In November, however, Harvest announced it would buy only Franklin Labs. As part of the Franklin Labs purchase, Harvest is getting a 46,800-square-foot marijuana cultivation, manufacturing and processing facility in Reading, Pennsylvania. Harvest said it expects to expand that facility, which represents the only cultivation site the company owns in Pennsylvania. Harvest owns and operates five medical marijuana dispensaries in the state. U.S. DEVELOPMENTS CompanyNews | U.S., Canada & International Recent deals, acquisitions and other announcements from cannabis companies