Company: IIPR
Filing Date: 2025-11-04
Form Type: 10-Q
Source: 0001677576-25-000005
Chunk: 168

Company: INNOVATIVE INDUSTRIAL PROPERTIES INC
Filing Date: 2025-11-04
Form: 10-Q
Item: Part I, Item 8
Chunk 168
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 to pay rent in full. These leases represent, in the aggregate, less than 2% of our total rental revenues for the three and nine months ended September 30, 2025.

Additionally, the Company previously declared a default under a secured promissory note in the aggregate principal amount of $16.1 million (the “MIH Note”). The MIH Note was issued to the Company by the purchaser of four properties in California, and the MIH Note is secured by such four properties. In September 2025, due to borrower's continued default and voluntary surrender, the Company took back possession and ownership of the four properties through a deed in lieu of foreclosure. 

The Company previously entered into leases with PharmaCann Inc. and its affiliates for eleven properties. Two of such leases, for cultivation facilities in Michigan and Massachusetts, had their monthly base rent of $1.3 million, in the aggregate, fully abated effective February 1, 2025, under lease amendments agreed to by the parties in January 2025. The Company re-leased the 205,000 square foot Michigan property to Berry Green in April 2025 and is seeking to re-lease the property located in Massachusetts. As previously disclosed, PharmaCann defaulted on its rent obligations under the remaining nine of these leases, covering properties in New York, Illinois, Pennsylvania, Ohio and Colorado, with total amounts due of $21.4 million as of September 30, 2025. These properties collectively accounted for approximately 11.4% of the Company’s annualized contractual rent due as of such date. The Company recovered possession of one of its retail properties in Colorado through a default judgment, and PharmaCann has paid and continues to pay full rent on the remaining four retail properties located in Colorado. The Company has commenced litigation against PharmaCann and is actively seeking possession of the properties located in New York, Illinois, Pennsylvania, and Ohio. The Company continues to enforce its rights under these leases and intends to pursue all remedies available under the lease agreements and applicable law. See Note 6 “Investments in Real Estate” in the notes to our consolidated financial statements for further information regarding our leases with PharmaCann and the MIH Note described above.

Because substantially all of our leases are triple net, our tenants are generally responsible for the maintenance, insurance, and property taxes associated with the properties they lease from us. We expect to incur some property-level operating costs from time to time, however, in periods during which properties that become