IIPR - Earnings call transcript Q4 2019 | Innovative Industrial Properties, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, and welcome to the Innovative Industrial Properties Fourth Quarter 2019 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Brian Wolfe, General Counsel. ahead. go Please

Brian Wolfe

President joining Executive for Officer; Presenting are Regin, today Hastings, Thank Paul the Smithers, Gold, Vice Ben and Chairman; Financial Executive Investments. President Alan Chief you Officer; call. of and Catherine Chief

to XXXX everyone differ the Before during variety statements factors. Reform Private a forward-looking within Securities today's to the materially of of deemed made the maybe Litigation that meaning uncertainties we and call safe risks, like may and begin, statements I'd due actual remind results conference harbor of Act of other

periodically risks discussion uncertainties refer For some any release company filed otherwise. with events, as a detailed or SEC. the a whether of update to the on to the future company's of issued intention obligation I the business, SEC ongoing any of with and disclaims forward-looking revise statements, or result filed X-K the as and company's reports The yesterday the information or news new of Form you well as

We up remarks. prepared questions for will after the open our line

will over to call now turn Alan. I the

Alan Gold

Today, Brian our look you, company. everyone. year has we a welcome and what forward to for really been Thank recapping transformational

that of of to existing relationships. partners months These tenant transactions XXXX. tenant of then their represented and five of third just two represented transactions At in the new properties a operations. first XX acquired to follow-on with the end First, our addition XX our remember XXXX, please in with XXXX properties started We we year base continued properties. both XXXX in new facilitate expansion

XXX%. in by we total today, through investments our X, over committed of portfolio From January well terms grown XXXX have

which million leased in own X.X totaling are basis licensed a cannabis of properties long-term XX square we XX high-quality to As XX% operators. states, on today, feet,

properties detail our recent Ben will these in overall with President more lease of remaining term our yield weighted XX.X% in Regin, acquisitions Investments discuss XX.X Our current our years. a average on Vice is blended of portfolio.

increase quarterly fourth on a XXXX per operating strength to This of and our the to dividend. paid over portfolio's of in confidence our stock common dividend testament $X share acquisitions. our pipeline portfolio, XXX% our quarter existing our a and performance, stockholders We representing XX, January of is

also acquisitions the tremendous which XXX-plus percent during and XX properties, tenant first $XXX was take into AFFO with completed XXXX, which by during revenue, account and in the existing for additional note the months amendments the quarter, supported investments. net dividend acquisitions time improvements rental This only does two five year-over-year at represent our during that additional reflects we partially at growth the of fourth in to all not of over together completed quarter income lease million

will continues tremendous our The and Smithers, industry on provide and experience and the regulatory also Paul CEO our financial CFO change; Catherine cannabis to more in regarding Hastings, our today. results. industry our provide call medical-use detail will growth detail trends some

Mary Directors. Finally, Curran of with as make a our member of continue great Mary recently, to of we team, most wealth a and of brings our our to the Committees. to in the in additions boardroom as announced Audit and December membership appointment experience on executive into Board's perspective we finance Nominating leadership positions and to our industry in insight her addition thrilled in the bring Board are

and by industry and partners tenant about value to our results very be optimistic enduring to the tailored of real for our deliver ability continue stakeholders to future estate We this nascent providing our

IFLE

and stakeholders results to that real continue Nominating operational and enduring and on solutions Committees, In very addition our and about future to Audit the by needs. tenant deliver for estate meet tailored ability providing Board's we the be optimistic partners industry value our of this key to our membership our nascent to capital

call the to turn I'd over Now, Paul? to Paul. with that, like

Paul Smithers

Thanks Alan.

and with to calls, one, we the try dynamics the on in regulatory as overview we two environment; focusing effective monitor an the closely. prior current that main and can topics; continue developments to As two, we'll provide as of industry

current regarding developments. the legislative federal environment regulatory and First,

of cannabis XXXX. which been again implementation generally commercial and the with cannabis of as with which funds Department courts from December the provision interfere Congress Schedule was substance prohibits this the said, laws. a Congressional since in That late Spending States. Bills year's has to carries cannabis-related state to I by September that Bill included using course, all Of controlled use continued Spending remains preventing enact XXth, medical-use to in That Justice passed provision United in through cannabis a activity has XXXX interpreted

some In we with opposition. Banking SAFE XXX. more months Act in resounding Banking late the the by the also vote known September and Secure earlier, Act as now the of reported with addition support facing to been in as is has for Fair The passed where a Banking and House it XXX legislation Committee was Enforcement Senate

the previously, Banking operators, Act, may these noted banks we being protection operators. result debt greater license, law, it also banks As in open to would capital more if became state compliant providing provide to federal and SAFE servicing to

Congressional cannabis-related to Tax Controlled by to Act, Sales the MORE Reinvestment Federal Act expunge to The require other social products House the developments, establish cannabis certain Courts fund the initiatives. Opportunity prior on and Judiciary vote would justice Committee MORE a In with approved and de-schedule cannabis XX convictions, Substances Federal from proceeds a Expungement November or Act Act in the XX. Marijuana of

very Senate. The scope. we meet it if a MORE in for Act the with and reach to the passes, And in ambitious vote opposition House is does significant the expected full

addressing concerns see movement and regarding federal continues forward of legalization you key the can the industry. As

perspective, medical-use the to outset XX the of level with significant have cannabis be development XX adult-use having potential states year programs. state in for for a states introduced from another XXXX currently legalized remaining Now, the industry the has At states.

another states states with reform considering were medical active programs adult-use introducing medical-use of XX adoption as Frontier were New policies. cannabis programs states Data, actively XX to were considering According XXXX began, cannabis programs. eight and debating regulated

industry are for following state constituents and indicating and citizens these U.S. polls and are the initiatives support moving of legalization. cannabis of with the of We in XX% legalization see cannabis clear and two-thirds momentum authorities for closely of support legislative to the plus the the excited wheel valid adult-use medical direction continued

February I with in monitoring reported large also cases want of CDC linked injury to have on been as cases. to that citing touch a lung the X,XXX call industry is there and on other products CDC; the cases identifying lung causes E acetate Vaping, as that we the our strongly the injuries have injury The to number reported of Xth. of in closely. lung associated some vaping we developments progress are FDA discussed made vitamin November,

products sharp contain in cases particularly CDC gradual, the has been August actions noted E of September most law findings acetate last from few some and or after year, related rise those vitamin enhanced but there driving of that and in peaking since the indicate factors products decline persistent products. The including that linked illicitly elicit that a cases. The a the in then noted removal potential signing to THC, to a vaping obtained CDC further further enforcement

generally the source the possible hopeful and quickly remain public definitively remove for protection move those that will these of to the away identify regulated authorities the laboratory We testing as to are safety push and further to injuries from the from of requirements. to will products this potential able be where unsafe the that is products industry elicit products cannabis markets robust subject quality And market.

to this discussed different taken vaping concern. previously as approaches we As addressing well states have

the E initiated authorities temporary Massachusetts to a for lift Vitamin such on state substances in stipulations and products additional For December products with example, vaping in ban for in as all requiring ban cannabis vaping acetate. then decided testing September

businesses. the are in our contact we impacts the vaping have are continue And had We restrictions situation on with and tenants having bands and monitor closely. regarding other related of their to

cannabis On from a somewhat sales monthly declined level, in $XXX million that about ARCU macro then the million but regulated October, of through of stabilized $XXX balance all-time August XXXX. estimated in to an vape

markets. Capital

regulated to adult-use our headwinds program public industry, companies. environment also last concerns, for rollout We facing challenges cannabis its our current respect equity the in vaping industry pullback certain cannabis cannabis raising noting the capital with and addressed the on for including markets of views of Canada the call

in to XXX a in XXX compared Based Viridian were total XXX raises in XXX a capital billion and of versus private XXXX raises there decline private for with public completed $XX.X M&A raising XXXX. on XXXX Capital also data capital M&A transactions $XX.X in from witnessed activity and transactions public approximately raising XXXX XXXX completed operators cannabis billion. in

our in grow industry their to a would the to in the that As early through tremendous of with year-over-year cannabis remain they and still XXXX XXXX, expect capital stages. its growth estate we $XX remain do in firm outlook an long-term aid companies. industry remain we tenant on growth constrained faced headwinds steadfast believers long-term trajectory as of cannabis in course but we revenues. opportunities our continues call, that We U.S. commitment its these also We even as real regulated industry in progress as growth tremendous to discussed with capital last very note XX% provider partners our over is the billion

Consolidation.

national operators footprint accelerate the businesses We continue operators continued as capital themselves. to brands seek mergers been in strong as and footprints. continue their acquire to companies and have also this believe cannabis a trend new businesses will addition and consolidation not to industry multi-state of licenses operators continue with and with team large monitoring resources the multi-state to larger if with We between complementary smaller grow

markets The scale certain efficiencies consolidation be become operations companies. look capital for to in capitalized by targets their is with operators likely and further combinations through valuations attractive depressed better constraints also as operators to driven achieve of

over operators we to our continue for industry. with now leasing you acquisitions of with ties and continue acquisitions. the I'll Ben to in Ben? our leading do will thrive the multi-state turn ample we recent some communities to call to to nation. independent who space discuss activity time, operators local strong through recent where to walk same the At the will in continue Ben see partner smaller the

Ben Regin

Thanks, Paul.

acquisition XXXX As accelerate into and quarter XXXX this a transformational Alan company. alluded of continued truly to momentum in fourth for year the off to capping our our

October executed with existing for to their properties tenet Since amendments eight and demand five in we meet products. to they states as acquired build capacity further lease X, have properties continue XX

states approximately including feet XX across properties XX XXX,XXX or development representing own we X.X today, under approximately square million square redevelopment. of feet As

information tenant each our Illinois. recent prior by our and the touch Consistent with plan call, with that four I of for and last which some improvements at in overall entering late state September our an Starting month. with program over further that then required with in were to We for our state of adult-use capacity in $X XXXX also in Wellness very lease provide active amending the lease in our anticipation Illinois to on and in Ascend sales additional months capital commenced property, originally additional state. last partially the tenant the provide about each to demand to acquisitions was million acquisition portfolio cannabis them meet

acquired aggregate. last to we our property total totaling million industrial each in with entered square our Cresco property October as call in investment be leases at the and long-term two in on the improvements tenant more is space discussed acquisition with for properties of As expected well, the feet Illinois, in into $XX.X and XX,XXX Labs,

closed of is in one XX% senior dispensaries, dispensaries. amount the California, making cannabis States. for loan Cresco wholesale $XXX secured one its operators in term million largest California's selling Last vertically United over approximately of integrated of Origin month, initial representing a executed Labs an into distributors on Cresco and the XXX acquisition principal storefront of House, Cresco largest on of the

a a square total XX,XXX improvements property lease be we and October, property industrial foot expected acquired with including square the in investment foot in acquisition entered a at Grassroots and to million. expansion in into our about Also $XX.X the XX,XXX long-term Illinois with tenant planned

to XX is acquired Grassroots to is spring which agreement expected according of be operations one and operators by states year the year cannabis of multi-state in this signed close leading last Curaleaf. with to the Curaleaf, definitive in a

a entered million. square property including expansion, into PharmaCann the long-term a XX,XXX acquisition in square lease $XX the total XX,XXX tenant our property, we October, foot planned and to in a Finally be foot and improvements with expected investment in with Illinois acquired at industrial

XXXX processing sale-leaseback New first and cultivation As, you transaction PharmaCann was our in for York. with a their facility in acquisition know,

with and Our marks them, transaction and in cultivation in and transactions processing their licensed property with lease New for fifth facilities Massachusetts, Illinois York, our PharmaCann acquisition Ohio cannabis including Pennsylvania.

is investment in including total or leased Our future fund construction improvements properties PharmaCann, tenant $XXX.X commitments to million. to

and Illinois not improvements Grassroots own which $XX.X of does $XXX be our requested include total we by for five over additional in may the As funding tenant today, our property. Litchfield future investment million, properties which million, at including committed is

with We for Illinois the certain the industry and the excited program pleased cannabis regulations of conditions. rapidly are and qualifying very operators group are new relaxation in of strong of medical the introduction of multi-state expanding this with cannabis future regulated medical through

Illinois addition, under year, of sales sales regulated first million, beginning truly the $X.X day at registering program In had of first cannabis the this adult-use of tremendous start. the in marking a nearly

We now facilities XX operator leading on Thumb allowance capacity a across to XX production by manufacturing lease operates of $XX.X us, including the Pennsylvania our in long-term significantly with move cannabis a retail improvements million. approximately we multistate a Green transaction November, investment an a Industries, Pennsylvania. property markets. to entered acquired U.S. In marked to into total property and XX This first locations for representing and GTI, expected with that enhance

a real Ohio, followed transaction We are and estate I with later. will facility capital this on which with processing thrilled touch to GTI's be long-term cannabis in GTI transaction partner for we another

foot with our having Grassroots, property. I later. October $XX.X XX,XXX In through the North allowance with for acquisition discussed acquired a which total this our transaction touch Grassroots, our with investment processing acquisition, facility square and facility This relationship concurrently Illinois in will at facility improvements Dakota expected as to tenant third on marked with Grassroots I additional the and Grassroots approximately an cultivation December, we be expanded including million, of

January, executed $X.X capacity. production cultivation a further Vireo processing lease additional provide in amendment our with an million and to in Health tenant tenant And we improvements, to facility enhance

and market, the is As our million. future of Pennsylvania today, investment allowance total we committed in for tenant own including in six $XXX properties improvements

of program cannabis in time period first in grown has sales, very tremendously medical-use XXXX. short commencing Pennsylvania's with a

first overtime, program operations, also its according sales, of cannabis just the program As conditions. medical Pennsylvania's than expanded we've states, seen data. two the state qualifying with $XXX In has in of its to new other addition reach including five more generated years million

in which in In adult-use Pennsylvanians. consumption, addition, line majority of with a Governor cannabis of Walls legalizing is is large Tom for favor

further provide amendment a an million of build-out we also area $X February, production Maitri at with and lease for In tenant additional executed facility, in our capacity. its improvements, Pittsburgh to tenant cultivation Medicinals processing

long-term $XX property LivWell, square in Michigan, redevelopment with to entered investment to acquisition with and we our on acquired October, Moving in total and the XXX,XXX million. property, foot of industrial a into lease expected the be approximately

cannabis XX XXXX, the LivWell XXX licensed in Colorado addition employing locations, Michigan, and in Established is in Canada. Oregon, of operations Rico in, with Puerto dispensary preeminent to one over operators, employees,

which February, Colorado, We further in with LivWell two our I relationship acquiring discuss will expanded locations in dispensary later.

acquisitions million, each future improvements locations Innovations, and for into six the Peak and dispensary October certain a of long-term In for tenant location. we November, and the leases $XX.X leases with total completed reimbursement in for entered of Green Michigan, including

facility leased acquired locations, million, investment processing together our And Peak, total to with mid-development, fund to approximately dispensary is tenant XXXX. commitments in improvements. these in $XX We Green and properties including Peak's, in Green future cultivation

of regulated XX largest As cannabis total country. adult-use of today, sales the million. market, one we funding And started future in tenant program in one properties under program, And Michigan's improvements, committed last investment Michigan. December own in medical-use of the is for including on Michigan's $XX the is our cannabis year.

stores, The week. the limited with scope, five was first adult-use retail rollout cannabis only in cannabis opened

in eight at demand program, adult-use five stores tremendous, million of days just those cannabis at in first stores. those $X.X the was sales, However, registering the

we program growth. tremendous the expect stores to experience come regulated more-and-more online, adult-use As

from XX% medical January, sales. fact, adult-use cannabis in to December increases cannabis with along rose In sales

comprising acquired described processing XX,XXX third facilities October, Cresco industrial and in of Ohio, on our January, after, with property long-term to partner square Moving a in Cresco lease into feet we of I cultivation and a approximately investment Illinois marking our two tenant as as space entered closing Cresco's earlier. with Labs,

total long-term in a completed GTI, GTI a executed tenant be Our acquired in improvements transaction is $XX.X November. sale-leaseback and with property expected and lease, January, following Also property of our in second Pennsylvania to our acquisition marking the we with Ohio transaction the million. investment in

including investment $X.X for million. property, reimbursement to improvements total is be in Our tenant the expected

properties we for And market, funding million. today, committed own including total of our future investment four As improvements Ohio. the is $XX in in tenant,

Medical-use cannabis registered the state's been X,XXX of caregivers dispensaries sales in of of those of XXXX. XX,XXX and in program, last generating patients the December, for XXXX. the sales, revenues first cannabis medical Ohio in in made their with nearly coming over And first its $XX year as XX% million have quarter of approximately end

alluded last industrial in entered we property a the the space completing call, our feet as entering long-term and of square million, And $XX for lease, comprising Florida a to XXX,XXX October, of we Trulieve. approximately into on market acquisition with

Massachusetts Trulieve additional the our to $XX.X available of funding property, with properties expected leased be million. Together fair, is Trulieve total to investment assuming the in our $XX full million to

month, one the and licensees dispensary state, XX% XX XXth Florida, all opened nearly in vertically Trulieve captures of of sales in cannabis This the just in integrated medical-use its state.

qualified one represents of the largest of the the cannabis United end fastest-growing States, in January. and Florida over medical-use as markets, of the patients of with XXX,XXX one

comprise completion of with entry In approximately square the our market of Virginia also XX,XXX property of we into space a the development. industrial marked expected feet January, acquisition to upon

and cultivation total with Pennsylvania transaction Green second million. our facility. leased processing development. property sale-leaseback property, XXXX medical-use the Leaf is our Leaf cannabis for expected Green properties Leaf Our a Pennsylvania be a to Green investment Medical be total funding is their expected and executed utilized in processing, of $XX.X with for having cultivation, investment This million with in lease executed We including our the to in Medical $XX.X dispensing. is completion transaction Together long-term and for will property

medical Green one five Leaf and in process, to of vertically integrated licenses holds cannabis cultivate, dispense Virginia.

press we cannabis medical Virginia the in release dispensary market the sales later expected is transaction, As with first in year. our announcing this indicated start-up phase its

noted, million. Dakota a December for executed reimbursement to investment including for be facility, previously $XX.X expected a tenant XX,XXX improvements total North our lease in property a as we foot and And Grassroots with acquired industrial square with

tenant Together our expected properties, with Grassroots leased to for full is total Pennsylvania reimbursement our Illinois million. $XX.X assuming investment improvements in properties and

in Dakota's North is program stages. its medical-use cannabis early

authorities the of steps regulatory by we additional access have conditions. over patient encouraged the medical However, dozen qualifying a time expand that including introduction North Dakota are to taken

In we two cultivation and licensed addition, the of state is somewhat of state North similar operators Grassroots only note position, cannabis only Dakota licensed in operators the Minnesota. that as of one one of in two tenant to Vireo's our processing

Moving to and our Colorado month, transactions transactions marking Colorado, dispensary their sale-leaseback with with third as LivWell, after earlier two cultivation processing Michigan noted acquired facility. we and this and second previously, locations in LivWell acquiring

tenant for Michigan reimbursement including our million. properties investment improvements expected leased expected approximately to LivWell is our property, expected to $XX.X $X.X is total million. Our with total Together in be investment

with from had improvements Massachusetts. of note, to this $X lease PharmaCann's effect available we tenant earlier PharmaCann which to million amended moving leases the with of our lease Finally, in week in them Pennsylvania

the operations. overall location national portion a that the properties base, important corporate guarantee or is within lease overall tenant underwrite with at allows not which reiterate which very the a large on specific multistate operators, in focus when the particular of state securing we to but to operations just us is tenant's level It invest our we

full Catherine? the turn quarter capital over and who call to Catherine activity financial now our and will the fourth talk I'll for about XXXX. year results raising

Catherine Hastings

quarter from our growth year We in which of our the year very fourth nearly a a $XX.X from million QX, in total of Thanks tremendous Ben. been It's year's of results year, increase capping XXXX. busy the approximately XXX% and full company of generated increase financial for year. and for an quarter fourth for reflected the revenues prior is full $XX.X million XXX% off an

rent to periods primarily of were leasing parties. by driven adjustments, that tenant of new contractual The certain certain rent tenants acquisition resulted increases in the and at provided properties improvement escalations allowances both properties, in base of additional

end note for we five please the acquisitions As as no leases quarters and partial that well revenues strong of course, five fourth as this reflects revenues, lease numerous this the of executed leases amendments from only the of the executed after during the quarter growth quarter. and was, and

were we off cash leases the under Our certain quarter revenues to that continue impacted abatements months the burn leases are deferrals our for as for also all next rent expected a few by of in to account on basis. or

recorded was million, which For $XX.X December ended income, to months million. of depreciation property income back operations, we XXXX, the net adds three funds $X.X approximately from XXst, net

back Adjusted our adds to interest funds from was exchangeable related which notes noncash stock-based non-cash million. operations $XX.X expense compensation and senior expense

period. XXst, from the months prior ended December funds three For tripled operations XXXX, from adjusted nearly year the

operations we income recorded million, of year $XX.X For from funds from operations million. of funds XXX% increased from the the funds XXXX. and $XX.X operations Adjusted $XX.X adjusted for year, net of from million, by

The As January post the and our and increase per that pipeline fourth XXst. as stock QX acquisition quarter. of of quarterly dividend of the operational year prior prior dividend record This Ben serves discussed confidence XXX% paid a common growth December completed the common a reflection XX, XX% past over Alan stockholders XX from a our December of mentioned, our XXXX from share $X in increase the acquisitions and including performance quarter, reflects on earlier. our strong to year's as we

ATM aftermarket program respect program of about in under net agents with with underwritten September $XXX to financing raised the And through public gross completed activity three million. established proceeds last we or an of $XXX common offering and we equity program stock an offering And of raising million. sales month, XXXX, proceeds today

financing over of this outstanding. million as account shares stock into of taking today, common activity XX have we reported, previously we As

are support, focused best our of recent raises the continued with truly are all exclusively and the for grateful proceeds investing on We equity our tenants. from stakeholders' we

And with Alan. back that, I'll turn Alan? to it

Alan Gold

outstanding in excited to our far and remain want on to continued come we XXXX stockholders aim expectations. about fast-growing value business focused remarkable we that, we work team their thank the long-term most outpacing your truly a dedication, executing for plan. this the and as to and are and had sustainable We I very importantly, Catherine. you. our for industry, create support personally Thanks, opportunities for our to With continue

like up up for for call I'd questions. that, could please With it questions. you the to Operator, open open

Operator

you. Thank

begin question question-and-answer session. Instructions] now [Operator will Catherwood Our come will first the Please ahead. with Tom We BTIG. from go

Tom Catherwood

you, Thank everyone. morning, good and

Catherine Hastings

Good morning.

Alan Gold

Hey, John.

Tom Catherwood

strong that, looks finish terms then acquisitions as your XXXX a it well. points pipeline of XXXX like sustainable on sizing yields So, to in the How basis XXXX? looks between top higher of is XQ XQ And and strong And picked up XQ. up balance for maybe are XXX-plus yields? of and the how

Paul Smithers

was be just looks I XXXX an even we to as think XXXX, the was performed and a well. stronger. very Tom, Well, strong XXXX it and team unbelievably strong extremely year as exciting had or

we're of our our -- growers Keeping so to some mind able pipeline that again different potentially we to to growers. tenant existing looking once strong of we base continue able prospects going is join large that large, going have think And XX% right provide are very base. tenant to now we very be and in that about to XX our and our and new to growth between growers have and a the balance the very pipeline, being capital strong XX% within

Tom Catherwood

XXXX how you, yields Got then to is far least? up shaping of terms of in then up that so XQ, pick kind you. at kind of from Got and that's XQ

Alan Gold

we going that increase think maintain I to it's be we've markets from where mid that financial what sense the in last about to the industry is believe we XXX able given achieve, able Yes. today. year with the basis stabilized to we say, in XXX been and can forward what we'll I points is -- of the we're are mean

Tom Catherwood

indicators hasn't know different this It Understood. in of the there's Canada, I markets, fear your any out supply markets. And in up then, are from necessarily that played way you And real early But this persistent Canadian of the that kind but give concerns? very is demand about a have some your which states? What's oversupply. status seen and of concern. you oversupply yet, it's of

Alan Gold

I little perspective, perhaps our anything bit. a other think condition, an that oversupply we're not in than seeing from California approaches maybe

other new growth happening. states and growth lot that are over well year-over-year in The in seeing the obviously, states still XX%. We're there's the of just the to demand, a program,

opposite. so, And just not has matter a the fact as issue. It's oversupply than of been the

Tom Catherwood

Got about Colorado in that have lower growth? production outdoor could limited due them, California think, pricing provisions? and they allow What that states are I to maybe Arizona, a impact you. license costs? allowed And

Alan Gold

So, are doesn't trying just growers. can't cannabis high-quality product consistent in be mind outdoor with of -- concept we work in provide keep focused an on done an grow the product And to that outdoor licensed with that a medical pure grow. or an

and requires even be a long-term a drives environment, can be value grown An product, adult-use and real situation product with high-quality pests grow cannabis of outdoor our estate. controlled contaminated and pesticides indoors and which medical which high-quality -- that variety in the fungus from a of other crops

Tom Catherwood

the markets it, And tenant asset your on ceased in Got one along at commentary that January rent was Paul, capital paying for yesterday's release me. those lines, last February. it. LA got And then, had the your noted very cannabis press helpful. and

progress on near-term of You through pose lease? generally, other working in are the more an your risks that there provide credit And update tenants maybe, any that portfolio?

Paul Smithers

Tom. Thanks, Yes.

continues regard move with forward. the to So DYME, to process

especially lot of property, operators distribution. very getting from of LA valuable that the that's for piece still at location a of interest We the other I assets a and think are look

receivership and So the continues. process

of question? part second the was what your Sorry,

Tom Catherwood

changes risks near the just term? asset, in credit any or portfolio beyond, your credit LA that any profiles Just other in you're seeing

Paul Smithers

basis. least close all portfolio very their date. financials, eye to at to be at with on keep know, our the we tenants. we you of Tom, look performance of we as a the And a continue And happy on quarterly

Tom Catherwood

right. All it. everyone. Got Thanks

Paul Smithers

Tom. Thanks,

Alan Gold

Thank you, Tom.

Operator

Roth Please Fortune Our next with go come question Scott from Capital. will ahead.

Alan Gold

How Scott? you doing? are Hi,

Operator

Mr.

open. is line your Fortune,

Scott Fortune

morning thank Good call. the Sorry. you and for

industrial Sorry, to competitors yields I that here? quick cannabis looking forward? your Are coming you some seeing touch things? we're board. more of on the affect side And the retail at on about wanted competitive of competition, threats What's seeing might versus how the little a sense that. in going industry, real base kind of them

Alan Gold

So, very that a at this we're time, we strong believe position. in

Stock As are the we only you entity know, public Exchange York the listed country. New that in

As a the a matter only of U.S.-based fact, company with we're listing.

four, capital a private million or of the have And X capital. other type by the know, and private of hundred and yields is offices from growers. evidenced se. believe size family strong attractive driving to capital tried capital not the company. very by primary We fairly our today of and in coming the times growers competition our And that is equity pipeline. capital competition we seen family seeing newest that a so obtain those down been entities friends least our per for we're priced think at that fairly a accompanied dollars. and since you most the but launch listing as XX of times formation have not -- raise in And market they've are raised as The Initially market. to other and able we're have We the raise is private to capital, five new entrant to deployed to couple able name U.S. which probably Subversive, up of the

today. seen -- not it our ever have over We large pipeline we have in it as have we seen as today

Scott Fortune

cannabis strong you portfolio tenant obviously a growers is have the look from just retail of this you percentage Thank exposure them the different there? side markets little from do geographic strategy the kind with And strategy different Covering out How color. is capital versus diversification other looking team kind these at that sure the priority for get top lot side just Okay. the a of on a for very MSOs bit a high management question more industrial that of there. you and or of on one portfolio? to or different side names a

Alan Gold

that Let the transactions larger unique we'll that mean me efficiency believe best the that dispensaries doing our our at estate growers. dispensaries team with the component, have we industrial a industrial the are growth our believe address growth to type size on -- portfolio interesting facilities. we versus retail facilities. continue we -- the of continue that existing look larger real our grow based and and the but dispensaries in to We our focus team's type are and part to I suited are of on scale

that's we So with that are. where

to As well-diversified diversification -- fairly already. we're pretty

states. XX different properties XX have We in

have We different growers. XX

growing. one to there it is three MSOs year on to is right partner for and focused very in strong way we our do are our and the existing model. business growth that believe two strong model that as that are sure continue a per business to a Because growers to adding mode We our making with straightforward

to new states. in there excited that indicated states states believe new remarks. as those excited states and We're if our a couple new continuing There online be Paul the grow are in prepared really can. very to has existing about that of are We coming Florida going including we're about are we

we'll to that As we we And still to do as continue PharmaCann's tenant about our and carefully believe be time. excited that to And reducing worked grow exposure. concentration prospects with business. their very largest over at is able we've very that We're PharmaCann.

Scott Fortune

Thanks will the in I queue. Okay. back jump for the color.

Operator

ahead. Massocca go come question with John Ladenburg from Our Please next Thalmann. will

John Massocca

Good. Good morning.

talked a you your of end MSOs in the particularly of solutions? opportunities kind last there of for of things the increased you sale-leaseback out some kind tenants' with debt larger at Are of one little was But year debt So, the was you of about your capital. there doing out seeing competing bit deals. competing terms of kind that

Alan Gold

transactions piece some debt true they the individual comparable see type very or convertible would of what companies, don't are with is to of was that -- convertible actually debt -- was of that referring of company the they sale-leaseback cost those We entailed. doing take those large capital. think the if to type even or of if the their were -- us any So, you're capital would so MSOs they giving I And the raise as kind to that have MSOs entities. identified by we're cost -- what to a ownership opposed of able the We access. where that some higher the up a debt that structure of than of any standard a

John Massocca

public operators? MSOs/kind of switching and to between larger MSOs the Okay. single mix maybe the what's smaller And maybe then state pipeline,

Alan Gold

and today. our extremely portfolio to I XX% Over described, are have in to well. large-type as entities continuing So, are them perform different XX MSOs they their we of growers very the

John Massocca

over kind progress could then pipeline kind of term touched that out Okay. specific of some you lastly, regulatory help see keep potential of you it And were kind the you growing about will? kind there you on if longer front, catalysts on the there of the excited briefly that of the in states any maybe but are

Alan Gold

you issuance got if that over of majority about that think the U.S. And positive the has XX% just had recreational cannabis. XX I to and XX let's large potential $XX capital, those you approved growing. of contemplating licenses. mean, and states to for saying positive those and of states really that licenses if new U.S., new additional for it all there is doing population very you But as you're just is demand programs going the this over approved, existing of one this those a that's states in catalysts the and of even in The I it say do are and be new -- fact are capital if states of mean is that these was cannabis of states if the medical licenses capital $X XX described, Well, just states use. million of I'm actually excited I of math associated rather think XX view type over mention -- the referring and very new XX in to with the needed only additional they and the to Not billion Paul industry industry different state that I population not each required or licenses them do states and the recreational alone. additional a

John Massocca

from helpful me. very Thank color. That you. Okay, it is

Alan Gold

John. Thanks,

Operator

this Gold over Alan back turn and to to I the conference At Instructions] further would time, like no [Operator are questions there for any remarks. closing

Alan Gold

Thank for also thank what continued thank what you. the and XXXX. is I With for And all here in a team to be a dedication today. their want Thank end us support. our you looking producing Thank great And call. stockholders phenomenal that, XXXX you. was strong to and for we'll work again, your joining very our

Operator

now you concluded. today's Thank may disconnect. The for you conference now presentation has and attending

Innovative Industrial Properties (IIPR) 27 Feb 202019 Q4 Earnings call transcript