Company: IIPR
Filing Date: 2025-02-21
Form Type: S-3ASR
Source: 0001104659-25-016184
Chunk: 15

Company: INNOVATIVE INDUSTRIAL PROPERTIES INC
Filing Date: 2025-02-21
Form: S-3ASR
Chunk 15
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 or fewer individuals (as defined in the Code to include certain entities) during the last half of a taxable year (other than
the first year for which an election to be a REIT has been made). See the section entitled “Material U.S. Federal Income Tax Considerations”
in this prospectus for further discussion on this topic.

Our charter contains restrictions on the ownership
and transfer of shares of our common stock and other outstanding shares of stock. The relevant sections of our charter provide that,
subject to the exceptions described below, no person or entity may own, or be deemed to own, by virtue of the applicable constructive
ownership provisions of the Code, more than 9.8% (in value or number of shares, whichever is more restrictive) of the aggregate of our
outstanding shares of stock or more than 9.8% (in value or number of shares, whichever is more restrictive) of our outstanding common
stock or any class or series of our outstanding preferred stock; we refer to these limitations as the “ownership limits.”
In addition, the Series A Preferred Stock articles supplementary provide that generally no person may own, or be deemed to own,
by virtue of the applicable constructive ownership provisions of the Code, more than 9.8% (in value or in number of shares, whichever
is more restrictive) of the outstanding Series A Preferred Stock.

<div align='center'>9</div>

The constructive ownership rules under the
Code are complex and may cause shares of stock owned actually or constructively by a group of related individuals or entities to be owned
constructively by one individual or entity. As a result, the acquisition of less than 9.8% in value of the aggregate of our outstanding
shares of stock and 9.8% (in value or in number of shares, whichever is more restrictive) of any class or series of our shares of stock
(or the acquisition of an interest in an entity that owns, actually or constructively, shares of our stock by an individual or entity),
could, nevertheless, cause that individual or entity, or another individual or entity, to violate the ownership limits.

Our board of directors may, upon receipt of certain
representations, undertakings and agreements and in its sole discretion, exempt (prospectively or retroactively) any person from the
ownership limits and establish a different limit, or excepted holder limit, for a particular person if the person’s ownership in
excess of the ownership limits will not then or in the future