A major cannabis-focused real estate investment trust (REIT) appears to be recovering from problems stemming from troubled tenants in the legal industry, including one major multistate operator.
San Diego-based REIT Innovative Industrial Properties is due to recover $7 million in back rent from a Massachusetts operator following a legal judgment last month, company executives said during the company’s quarterly earnings call on Tuesday.
But another major dispute in California, where a major cultivation operation fell apart amid accusations of fraud, is still unfolding.
A major lessor of cannabis real estate across the country, IIP has cannabis properties in 19 states.
The company reported owning 72 properties in its top 10 states, but two of its biggest tenants went into default last year.
Defaulting on the biggest landlord in cannabis
Its main tenants are marijuana MSOs.
- New York-based Ascend Wellness, with four leases totaling 624,000 square feet at $31.3 million in annual base rent
- Chicago-based PharmaCann, which defaulted on its seven properties totaling 364,000 square feet at $29.1 million in annual base rent.
- Chicago-based Green Thumb Industries, which pays $23 million for 664,000 square feet at eight properties.
- Connecticut-based Curaleaf Holdings, which pays $21 million a year for eight properties totaling 582,000 square feet
- Tallahassee, Florida-based Trulieve Cannabis Corp., which pays $20 million for 740,000 square feet at six properties.
In addition to PharmaCann and 4Front Ventures, which defaulted on $18 million in rent last year, several other operators that are IIP tenants have gone through receivership, squeezing IIP’s bottom line.
Cannabis REIT says it’s recovering unpaid rents, leasing properties
So far in 2026, the company has recovered $3 million in unpaid rents, Chief Financial Officer David Smith said.
That doesn’t include the $7 million judgment the company received last month for unpaid rent from Temescal Wellness, a Massachusetts-based operator, executives said during Tuesday’s earnings call.
Other legal proceedings are ongoing for IIP tenants 4Front Ventures, PharmaCann and Gold Flora, CEO Paul Smithers said.
IIP leased six properties to PharmaCann, which shut down an Illinois cultivation operation in November.
IIP “regained possession” of a 66,000-square-foot property in that state in December and signed a letter of intent with a new tenant in January, Chief Investment Officer Ben Regin said.
A 205,000-square-foot property in Michigan was rented to a new tenant last April, and IIP found a new tenant for a 58,000-square-foot property in Massachusetts in November.
That leaves three former PharmaCann properties in New York, Ohio and Pennsylvania.
PharmaCann, Gold Flora, and 4Front Ventures properties
The company reported making “meaningful progress” in finding new tenants for properties formerly leased by Gold Flora, which filed for voluntary receivership in March 2025.
IIP had leased four properties to 4Front Ventures. The company reported a “tentative agreement” with a new tenant for a 114,000-square-foot property in Washington. Three others – two in Massachusetts and one in Illinois – are still available.
But the trickiest situation may be in California, where a major IIP tenant defaulted on rent in 2022.
California struggles continue
That was cultivation operator Kings Garden, which appears defunct after it failed to pay $2.3 million in rent on six IIP-owned properties.
In early 2021, Kings announced ambitious plans to expand to an eye-popping 665,000 square feet of “indoor operations” that would produce 140,000 pounds of cannabis and generate “over $300 million in revenue” by 2023.
Instead, the company collapsed and the remnants are now embroiled in lawsuits alleging fraud, The Desert Sun reported.
However, IIP has already found new tenants for:
- A 204,000-square-foot facility in Desert Hot Springs
- A 70,000-square-foot facility in Palm Springs
IIP received “multiple offers” for a 56,000-square-foot building in Palm Springs, the company said.
Innovative Industrial Properties trades on the NYSE under the symbol IIPR. Stock shares traded around $52 on Wednesday, well below a 2021 peak of over $250.
