Company: IIPR
Filing Date: 2025-02-26
Form Type: 424B5
Source: 0001104659-25-017454
Chunk: 70

Company: INNOVATIVE INDUSTRIAL PROPERTIES INC
Filing Date: 2025-02-26
Form: 424B5
Chunk 70
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 of stock
that could, depending upon the terms of the particular class or series, delay, defer or prevent a change in control or other transaction
that might involve a premium price for shares of our common stock or otherwise be in the best interest of our stockholders.

Restrictions on Ownership and Transfer

In order for us to qualify as a REIT under the
Internal Revenue Code of 1986, as amended (the “Code”), shares of our stock must be owned by 100 or more persons during at
least 335 days of a taxable year of 12 months (other than the first year for which an election to be taxed as a REIT has been made) or
during a proportionate part of a shorter taxable year. Also, under Section 856(h) of the Code, a REIT cannot be “closely
held.” In this regard, not more than 50% of the value of the outstanding shares of stock may be owned, directly or indirectly,
by five 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 construct