Marijuana REIT, Vireo involved in $5.8 million property deal in Pennsylvania

Innovative Industrial Properties, a San Diego-based real estate investment trust (REIT) that deals with medical marijuana growers, acquired an 89,000-square-foot industrial space in Scranton, Pennsylvania, for $5.8 million as part of a sale-leaseback transaction.

According to a news release, Innovative Industrial Property will lease the property to a subsidiary of Vireo Health, a multistate MMJ company.

The lease agreement is for 15 years and includes two, five-year options. Vireo is the property’s current tenant.

Innovative Industrial Properties also agreed to reimburse Minnesota-based Vireo up to roughly $2.8 million for tenant improvements to the building, making the investment worth roughly $8.6 million.

Vireo is using the Scranton facility to grow and process medical cannabis.

Here’s what you need to know:

• Innovative Industrial Properties, which trades as IIPR on the New York Stock Exchange, completed two sale-leaseback deals in 2017 for Vireo’s grow and processing operations in New York and Minnesota last year. Those transactions totaled roughly $8.4 million.
• Vireo Health received one of the initial licenses in Phase 1 of Pennsylvania’s MMJ program rollout. The state recently began Phase 2.
• At the end of 2017, Innovative Industrial Properties filed documentation of its intention to raise $100 million.