Company: IIPR
Filing Date: 2025-02-21
Form Type: S-3ASR
Source: 0001104659-25-016184
Chunk: 100

Company: INNOVATIVE INDUSTRIAL PROPERTIES INC
Filing Date: 2025-02-21
Form: S-3ASR
Chunk 100
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 “plan assets,” an investment by an IRA in our securities might be deemed
to result in an impermissible commingling of IRA assets with other property.

If our advisor or its affiliates were treated
as fiduciaries with respect to Plan holders of our securities, the prohibited transaction restrictions of ERISA and the Code would apply
to any transaction involving our assets. These restrictions could, for example, require that we avoid transactions with persons that
are affiliated with or related to us or our affiliates or require that we restructure our activities in order to obtain an administrative
exemption from the prohibited transaction restrictions. Alternatively, we might have to provide Plan holders of our securities with the
opportunity to sell their securities to us or we might dissolve.

However, as mentioned above, the Plan Assets Regulation
provides exeptions to the general rule that the underlying assets of an entity, such as a REIT, will be treated as assets of a Plan investing
therein. Two such exceptions are the “publicly-offered securities” exception and the “insignificant participation”
exception, each as described below.

Exception for “Publicly-Offered Securities.” If a Plan acquires “publicly-offered securities,”
the assets of the issuer of the securities will not be deemed to be “plan assets” under the Plan Assets Regulation. A publicly-offered
security must be:

| · | (i) sold as part of a public                                                                                                           
 offering registered under the Securities Act and be part of a class of securities registered under the Exchange Act within a specified 
 time period or (ii) sold as part of a class of securities registered under Section 12(b) or 12(g) of the Exchange                      
 Act;                                                                                                                                   |

| · | part of a class of securities that                                                     
 is owned by 100 or more persons who are independent of the issuer and one another; and |

| · | “freely transferable.” |

Whether a security is “freely transferable”
depends upon the particular facts and circumstances. The Plan Assets Regulation provides several examples of restrictions on transferability
that, absent unusual circumstances, will not prevent the rights of ownership in question from being considered “freely transferable”
if the minimum investment is $10,000 or less. Where the minimum investment in a public offering of securities is $10,000 or less, the
presence of the following restrictions on transfer will not ordinarily affect a determination that such securities are “freely
transferable”:

| · | any