Document:

Exhibit 10.1

 

INNOVATIVE
INDUSTRIAL PROPERTIES, Inc.
 2016 OMNIBuS INCENTIVE PLAN

 

1.     Purpose, Effective Date and Definitions.

 

(a)   Purpose.
This Innovative Industrial Properties, Inc. 2016 Omnibus Incentive Plan has two complementary purposes: (i) to attract,
retain, focus and motivate executives and other selected employees, directors, consultants and advisors and (ii) to increase
stockholder value. The Plan will accomplish these objectives by offering participants the opportunity to acquire shares of
the Company’s Class A common stock, receive monetary payments based on the value of such Class A common stock or
receive other incentive compensation on the terms that this Plan provides.

 

(b)   Effective Date. Subject to stockholder
approval of the Plan prior to such date, this Plan will become effective on the date on which the shares of the Company’s
voting common stock are first sold to the public pursuant to an effective registration statement filed by the Company under the
Securities Act of 1933, as amended (the “Effective Date”).

 

(c)   Definitions. Capitalized terms
used and not otherwise defined in various sections of the Plan have the meanings given in Section 18.

 

2.     Administration.

 

(a)   Administration. In addition
to the authority specifically granted to the Administrator in this Plan, the Administrator has full discretionary authority to
administer this Plan, including but not limited to the authority to: (i) interpret the provisions of this Plan or any agreement
covering an Award; (ii) prescribe, amend and rescind rules and regulations relating to this Plan; (iii) correct any defect,
supply any omission, or reconcile any inconsistency in the Plan, any Award or any agreement covering an Award in the manner and
to the extent it deems desirable to carry this Plan or such Award into effect; and (iv) make all other determinations necessary
or advisable for the administration of this Plan. All Administrator determinations shall be made in the sole discretion of the
Administrator and are final and binding on all interested parties.

 

Notwithstanding any provision of the Plan
to the contrary, the Administrator shall have the discretion to grant an Award with any vesting condition, any vesting period or
any performance period if the Award is granted to a newly hired or promoted Participant, or accelerate or shorten the vesting or
performance period of an Award, in connection with a Participant’s death, Disability, Retirement or termination by the Company
or an Affiliate without Cause or a Change of Control.

 

Notwithstanding the above statement or any
other provision of the Plan, once established, the Administrator shall have no discretion to increase the amount of compensation
payable under an Award that is intended to be performance-based compensation under Code Section 162(m), although the Administrator
may decrease the amount of compensation a Participant may earn under such an Award.

 

(b)   Delegation to Other Committees
or Officers. To the extent applicable law permits, the Board may delegate to another committee of the Board, or the Committee
may delegate to one or more officers of the Company, any or all of their respective authority and responsibility as an Administrator
of the Plan; provided that no such delegation is permitted with respect to Stock-based Awards made to Section 16 Participants
at the time any such delegated authority or responsibility is exercised unless the delegation is to another committee of the Board
consisting entirely of Non-Employee Directors. If the Board or the Committee has made such a delegation, then all references to
the Administrator in this Plan include such other committee or one or more officers to the extent of such delegation.

 

     

     

    

 

(c)   No Liability; Indemnification.
No member of the Board or the Committee, and no officer or member of any other committee to whom a delegation under Section 2(b)
has been made, will be liable for any act done, or determination made, by the individual in good faith with respect to the Plan
or any Award. The Company will indemnify and hold harmless each such individual as to any acts or omissions, or determinations
made, with respect to this Plan or any Award to the maximum extent that the law and the Company’s by-laws permit.

 

3.     Eligibility. The
Administrator may designate any of the following as a Participant from time to time, to the extent of the Administrator’s
authority: any officer or other employee of the Company or its Affiliates; any individual that the Company or an Affiliate has
engaged to become an officer or employee; any consultant or advisor who provides services to the Company or its Affiliates; or
any Director, including a Non-Employee Director. The Administrator’s granting of an Award to a Participant will not require
the Administrator to grant an Award to such individual at any future time. The Administrator’s granting of a particular type
of Award to a Participant will not require the Administrator to grant any other type of Award to such individual. 

 

4.     Types of Awards; Assistance to
Participants.

 

(a)   Grants of Awards. Subject
to the terms of this Plan, the Administrator may grant any type of Award to any Participant it selects, but only employees of the
Company or a Subsidiary (that qualifies under Code Section 422) may receive grants of incentive stock options within the meaning
of Code Section 422. Awards may be granted alone or in addition to, in tandem with, or (subject to the prohibition on repricing
set forth in Section 14(e)) in substitution for any other Award (or any other award granted under another plan of the Company
or any Affiliate, including the plan of an acquired entity).

 

(b)   Assistance. On such terms
and conditions as shall be approved by the Administrator, the Company or any Subsidiary may directly or indirectly lend money to
any Participant or other person to accomplish the purposes of the Plan, including to assist such Participant or other person to
acquire Shares upon the exercise of Options, provided that such lending is not permitted to the extent it would violate
terms of the Sarbanes-Oxley Act of 2002 or any other law, regulation or other requirement applicable to the Company or any Subsidiary.

 

5.     Shares Reserved under this Plan.

 

(a)   Plan Reserve. Subject to adjustment
as provided in Section 16, the aggregate maximum number of Shares that may be issued pursuant to Awards after the Effective Date
shall equal One Million (1,000,000) Shares. Notwithstanding anything to the contrary in this Section 5(a), but subject to adjustment
as provided in Section 16, the aggregate maximum number of Shares that may be issued pursuant to the exercise of incentive stock
options shall be One Million (1,000,000) Shares. The Shares reserved for issuance may be either authorized and unissued Shares
or shares reacquired at any time and now or hereafter held as treasury stock. The aggregate number of Shares reserved under this
Section 5(a) shall be depleted by the maximum number of Shares, if any, that may be issuable under an Award as determined at the
time of grant. For purposes of determining the aggregate number of Shares reserved for issuance under this Plan, any fractional
Share shall be rounded to the next highest full Share.

 

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(b)   Replenishment of Shares Under
this Plan. If (i) an Award lapses, expires, terminates or is cancelled without the issuance of Shares under the Award (whether
due currently or on a deferred basis), (ii) it is determined during or at the conclusion of the term of an Award that all or some
portion of the Shares with respect to which the Award was granted will not be issuable, or that other compensation with respect
to the Shares covered by the Award will not be payable, on the basis that the conditions for such issuance will not be satisfied,
(iii) Shares are forfeited under an Award, (iv) Shares are issued under any Award and the Company subsequently reacquires them
pursuant to rights reserved upon the issuance of the Shares or (v) Shares are tendered to satisfy the exercise price of an Award
or federal, state or local tax withholding obligations, then such Shares shall be recredited to the Plan’s reserve and may
again be used for new Awards under this Plan, but Shares recredited to the Plan’s reserve pursuant to clause (iv) or (v)
may not be issued pursuant to incentive stock options.

 

(c)   Participant Limitations. Subject
to adjustment as provided in Section 16, during any time when the Company has a class of equity security registered under
Section 12 of the Exchange Act and the transition period under Treasury Reg. Section 1.162-27(f)(2) has lapsed or does not apply,
no Participant may be granted Awards that could result in such Participant:

 

(i)       receiving Options for,
and/or Stock Appreciation Rights with respect to, more than 200,000 Shares (or 200,000 Shares, in the case of a Non-Employee Director)
during any fiscal year of the Company;

 

(ii)       receiving Awards of Restricted
Stock and/or Restricted Stock Units, and/or other Stock-based Awards pursuant to Section 12, relating to more than 200,000 Shares
(or 200,000 Shares, in the case of a Non-Employee Director) during any fiscal year of the Company;

 

(iii)       receiving Awards of Performance
Shares, and/or Awards of Performance Units the value of which is based on the Fair Market Value of Shares, for more than 200,000
Shares (or 200,000 Shares, in the case of a Non-Employee Director) during any fiscal year of the Company; or

 

(iv)       receiving Awards of Performance
Units the value of which is not based on the Fair Market Value of Shares, Annual Incentive Award(s), Long-Term Incentive Award(s)
or Dividend Equivalent Unit(s) that would pay more than $2,000,000 to the Participant (or $2,000,000, in the case of a Non-Employee
Director) during any single fiscal year of the Company.

 

In all cases relating to Awards granted to Participants other
than Non-Employee Directors, determinations under this Section 5(c) shall be made in a manner consistent with the exemption
for performance-based compensation that Code Section 162(m) provides and, to the extent applicable, the transition rules thereunder.

 

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6.    Options. Subject
to the terms of this Plan, the Administrator will determine all terms and conditions of each Option, including but not limited
to: (a) whether the Option is an “incentive stock option” which meets the requirements of Code Section 422, or
a “nonqualified stock option” which does not meet the requirements of Code Section 422; (b) the grant date, which
may not be any day prior to the date that the Administrator approves the grant; (c) the number of Shares subject to the Option;
(d) the exercise price, which may not be less than the Fair Market Value of the Shares subject to the Option as determined on the
date of grant; (e) the terms and conditions of vesting and exercise; and (f) the term, except that an Option must terminate no
later than ten (10) years after the date of grant. In all other respects, the terms of any incentive stock option should comply
with the provisions of Code Section 422 except to the extent the Administrator determines otherwise. Except to the extent
the Administrator determines otherwise, a Participant may exercise an Option in whole or part after the right to exercise the Option
has accrued, provided that any partial exercise must be for one hundred (100) Shares or multiples thereof. If an Option
that is intended to be an incentive stock option fails to meet the requirements thereof, the Option shall automatically be treated
as a nonqualified stock option to the extent of such failure. Unless restricted by the Administrator, and subject to such procedures
as the Administrator may specify, the payment of the exercise price of Options may be made by (x) delivery of cash or other Shares
or other securities of the Company (including by attestation) having a then Fair Market Value equal to the purchase price of such
Shares or (y) by delivery to the Company or its designated agent of an executed irrevocable option exercise form together with
irrevocable instructions to a broker-dealer to sell or margin a sufficient portion of the Shares and deliver the sale or margin
loan proceeds directly to the Company to pay for the exercise price. To the extent permitted by the Administrator, the payment
of the exercise price of the Options may also be made by surrendering the right to receive Shares otherwise deliverable to the
Participant upon exercise of the Award having a Fair Market Value at the time of exercise equal to the total exercise price or
by any combination of such method and the methods described in the preceding sentence. Except to the extent otherwise set forth
in an Award agreement, a Participant shall have no rights as a holder of Stock as a result of the grant of an Option until the
Option is exercised, the exercise price and applicable withholding taxes are paid and the Shares subject to the Option are issued
thereunder.

 

7.    Stock Appreciation Rights. Subject
to the terms of this Plan, the Administrator will determine all terms and conditions of each SAR, including but not limited to:
(a) whether the SAR is granted independently of an Option or relates to an Option; (b) the grant date, which may not be any day
prior to the date that the Administrator approves the grant; (c) the number of Shares to which the SAR relates; (d) the grant price,
provided that the grant price shall not be less than the Fair Market Value of the Shares subject to the SAR as determined
on the date of grant; (e) the terms and conditions of exercise or maturity, including vesting; (f) the term, provided that
an SAR must terminate no later than ten (10) years after the date of grant; and (g) whether the SAR will be settled in cash, Shares
or a combination thereof. If an SAR is granted in relation to an Option, then unless otherwise determined by the Administrator,
the SAR shall be exercisable or shall mature at the same time or times, on the same conditions and to the extent and in the proportion,
that the related Option is exercisable and may be exercised or mature for all or part of the Shares subject to the related Option.
Upon exercise of any number of SARs, the number of Shares subject to the related Option shall be reduced accordingly and such Option
may not be exercised with respect to that number of Shares. The exercise of any number of Options that relate to an SAR shall likewise
result in an equivalent reduction in the number of Shares covered by the related SAR.

 

8.   Performance and Stock Awards.
Subject to the terms of this Plan, the Administrator will determine all terms and conditions
of each award of Shares, Restricted Stock, Restricted Stock Units, Performance Shares or Performance Units, including but not limited
to: (a) the number of Shares and/or units to which such Award relates; (b) whether, as a condition for the Participant to realize
all or a portion of the benefit provided under the Award, one or more Performance Goals must be achieved during such period as
the Administrator specifies; (c) whether the restrictions imposed on Restricted Stock or Restricted Stock Units shall lapse,
and all or a portion of the Performance Goals subject to an Award shall be deemed achieved, upon a Participant’s death, Disability
or Retirement; (d) the length of the vesting and/or performance period and, if different, the date on which payment of the benefit
provided under the Award will be made; (e) with respect to Performance Units, whether to measure the value of each unit in relation
to a designated dollar value or the Fair Market Value of one or more Shares; and (f) with respect to Restricted Stock Units and
Performance Units, whether to settle such Awards in cash, in Shares (including Restricted Stock), or a combination thereof. 

 

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9.    Annual Incentive Awards. Subject
to the terms of this Plan, the Administrator will determine all terms and conditions of an Annual Incentive Award, including but
not limited to the Performance Goals, performance period, the potential amount payable, and the timing of payment; provided
that the Administrator must require that payment of all or any portion of the amount subject to the Annual Incentive Award is contingent
on the achievement of one or more Performance Goals during the period the Administrator specifies, although the Administrator may
specify that all or a portion of the Performance Goals subject to an Award are deemed achieved upon a Participant’s death,
Disability or Retirement (except, in the case of an Award intended to constitute performance-based compensation under Code Section
162(m), to the extent inconsistent with the applicable requirements of Code Section 162(m)), or such other circumstances as the
Administrator may specify. 

 

10.    Long-Term Incentive Awards.
Subject to the terms of this Plan, the Administrator will determine all terms and conditions
of a Long-Term Incentive Award, including but not limited to the Performance Goals, performance period (which must be more than
one year), the potential amount payable, and the timing of payment; provided that the Administrator must require that payment
of all or any portion of the amount subject to the Long-Term Incentive Award is contingent on the achievement of one or more Performance
Goals during the period the Administrator specifies, although the Administrator may specify that all or a portion of the Performance
Goals subject to an Award are deemed achieved upon a Participant’s death, Disability or Retirement (except, in the case of
an Award intended to constitute performance-based compensation under Code Section 162(m), to the extent inconsistent with the applicable
requirements of Code Section 162(m)), or such other circumstances as the Administrator may specify. 

 

11.    Dividend Equivalent Units. Subject
to the terms of this Plan, the Administrator will determine all terms and conditions of each award of Dividend Equivalent Units,
including but not limited to whether: (a) such Award will be granted in tandem with another Award; (b) payment of the Award will
be made concurrently with dividend payments or credited to an account for the Participant which provides for the deferral of such
amounts until a stated time; (c) the Award will be settled in cash or Shares; and (d) as a condition for the Participant to realize
all or a portion of the benefit provided under the Award, one or more Performance Goals must be achieved during such period as
the Administrator specifies; provided that Dividend Equivalent Units may not be granted in connection with an Option, Stock
Appreciation Right or other “stock right” within the meaning of Code Section 409A; and provided further
that no Dividend Equivalent Unit granted in tandem with another Award shall include vesting provisions more favorable to the Participant
than the vesting provisions, if any, to which the tandem Award is subject.

 

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12.    Other Stock-Based Awards. Subject
to the terms of this Plan, the Administrator may grant to Participants other types of Awards, which may be denominated or payable
in, valued in whole or in part by reference to, or otherwise based on, Shares, either alone or in addition to or in conjunction
with other Awards, and payable in Stock or cash. Without limitation except as provided herein (and subject to the limitations of
Section 14(e)), such Award may include the issuance of shares of unrestricted Stock, which may be awarded in payment of director
fees, in lieu of cash compensation, in exchange for cancellation of a compensation right, as a bonus, or upon the attainment of
Performance Goals or otherwise, or rights to acquire Stock from the Company. The Administrator shall determine all terms and conditions
of the Award, including but not limited to, the time or times at which such Awards shall be made, and the number of Shares to be
granted pursuant to such Awards or to which such Award shall relate; provided that any Award that provides for purchase
rights shall be priced at 100% of Fair Market Value on the date of the Award. 

 

13.    Restrictions on Transfer, Encumbrance
and Disposition. No Award granted under this Plan may be sold, assigned, mortgaged, pledged,
exchanged, hypothecated or otherwise transferred, or encumbered or disposed of, by a Participant other than by will or the laws
of descent and distribution, and during the lifetime of the Participant such Awards may be exercised only by the Participant or
the Participant’s legal representative or by the permitted transferee of such Participant as hereinafter provided (or by
the legal representative of such permitted transferee). Notwithstanding the foregoing, a Participant may transfer an Award to the
extent expressly permitted by the Administrator. Subsequent transfers of transferred Awards are prohibited except transfers otherwise
made in accordance with this Section 13. Any attempted transfer not permitted by this Section 13 shall be null and void
and have no legal effect. The restrictions set forth in this Section 13, and any risk of forfeiture applicable to an Award,
shall be enforceable against any transferee of an Award.

 

14.    Termination and Amendment of
Plan; Amendment, Modification or Cancellation of Awards.

 

(a)   Term of Plan. Unless the Board
earlier terminates this Plan pursuant to Section 14(b), this Plan will terminate on the tenth (10th) anniversary of
the Effective Date. No Award may constitute qualified performance-based compensation within the meaning of Code Section 162(m)
unless, to the extent required by Code Section 162(m) for such Award to constitute qualified performance-based compensation, the
material terms of the Performance Goals applicable to such Award are disclosed to and reapproved by the stockholders of the Company
no later than the first stockholder meeting that occurs in the fifth (5th) year following the year in which the stockholders
previously approved the Performance Goals.

 

(b)    Termination and Amendment.
The Board or the Administrator may amend, alter, suspend, discontinue or terminate this Plan at any time, subject to the following
limitations:

 

(i)       the Board must approve
any amendment of this Plan to the extent the Company determines such approval is required by: (A) prior action of the Board,
(B) applicable corporate law, or (C) any other applicable law;

 

(ii)       stockholders must approve
any amendment of this Plan to the extent the Company determines such approval is required by: (A) Section 16 of the Exchange
Act, (B) the Code, (C) the listing requirements of any principal securities exchange or market on which the Shares are
then traded, or (D) any other applicable law; and

 

(iii)       stockholders must approve
any of the following Plan amendments: (A) an amendment to materially increase any number of Shares specified in Section 5(a)
or the limits set forth in Section 5(c) (except as permitted by Section 16) or (B) an amendment that would diminish the protections
afforded by Section 14(e).

 

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(c)           Amendment, Modification, Cancellation
and Disgorgement of Awards.

 

(i)   Except as provided in Section 14(e)
and subject to the requirements of this Plan, the Administrator may modify, amend or cancel any Award, or waive any restrictions
or conditions applicable to any Award or the exercise of the Award; provided that, except as otherwise provided in the Plan
or the Award agreement, any modification or amendment that materially diminishes the rights of the Participant, or the cancellation
of the Award, shall be effective only if agreed to by the Participant or any other person(s) as may then have an interest in the
Award, but the Administrator need not obtain Participant (or other interested party) consent for the modification, amendment or
cancellation of an Award pursuant to the provisions of subsection (ii) or Section 16 or as follows: (A) to the extent the
Administrator deems such action necessary to comply with any applicable law or the listing requirements of any principal securities
exchange or market on which the Shares are then traded; (B) to the extent the Administrator deems necessary to preserve favorable
accounting or tax treatment of any Award for the Company; or (C) to the extent the Administrator determines that such action does
not materially and adversely affect the value of an Award or that such action is in the best interest of the affected Participant
(or any other person(s) as may then have an interest in the Award). Notwithstanding the foregoing, unless determined otherwise
by the Administrator, any such amendment shall be made in a manner that will enable an Award intended to be exempt from Code Section
409A to continue to be so exempt, or to enable an Award intended to comply with Code Section 409A to continue to so comply.

 

(ii)   Notwithstanding anything
to the contrary in an Award agreement, the Administrator shall have full power and authority to terminate or cause the Participant
to forfeit the Award, and require the Participant to disgorge to the Company any gains attributable to the Award, if the Participant
engages in any action constituting, as determined by the Administrator in its discretion, Cause for termination, or a breach of
any Award agreement or any other agreement between the Participant and the Company or an Affiliate concerning noncompetition, nonsolicitation,
confidentiality, trade secrets, intellectual property, nondisparagement or similar obligations.

 

(iii)   Any Awards granted pursuant
to this Plan, and any Stock issued or cash paid pursuant to an Award, shall be subject to any recoupment or clawback policy that
is adopted by, or any recoupment or similar requirement otherwise made applicable by law, regulation or listing standards to, the
Company from time to time.

 

(d)   Survival of Authority and Awards.
Notwithstanding the foregoing, the authority of the Board and the Administrator under this Section 14 and to otherwise administer
the Plan with respect to then-outstanding Awards will extend beyond the date of this Plan’s termination. In addition, termination
of this Plan will not affect the rights of Participants with respect to Awards previously granted to them, and all unexpired Awards
will continue in force and effect after termination of this Plan except as they may lapse or be terminated by their own terms and
conditions.

 

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(e)   Repricing and Backdating Prohibited.
Notwithstanding anything in this Plan to the contrary, and except for the adjustments provided for in Section 16, neither
the Administrator nor any other person may (i) amend the terms of outstanding Options or SARs to reduce the exercise or grant price
of such outstanding Options or SARs; (ii) cancel outstanding Options or SARs in exchange for Options or SARs with an exercise or
grant price that is less than the exercise or grant price of the original Options or SARs; or (iii) cancel outstanding Options
or SARs with an exercise or grant price above the current Fair Market Value of a Share in exchange for cash or other securities.
In addition, the Administrator may not make a grant of an Option or SAR with a grant date that is effective prior to the date the
Administrator takes action to approve such Award.

 

(f)   Foreign Participation. To
assure the viability of Awards granted to Participants employed or residing in foreign countries, the Administrator may provide
for such special terms as it may consider necessary or appropriate to accommodate differences in local law, tax policy, accounting
or custom. Moreover, the Administrator may approve such supplements to, or amendments, restatements or alternative versions of,
this Plan as it determines is necessary or appropriate for such purposes. Any such amendment, restatement or alternative versions
that the Administrator approves for purposes of using this Plan in a foreign country will not affect the terms of this Plan for
any other country. In addition, all such supplements, amendments, restatements or alternative versions must comply with the provisions
of Section 14(b)(ii).

 

(g)   Code Section 409A. The provisions
of Code Section 409A are incorporated herein by reference to the extent necessary for any Award that is subject to Code Section
409A to comply therewith.

 

15.    Taxes. 

 

(a)   Withholding.
In the event the Company or one of its Affiliates is required to withhold any Federal, state or local taxes or other amounts
in respect of any income recognized by a Participant as a result of the grant, vesting, payment or settlement of an Award or
disposition of any Shares acquired under an Award, the Company or its Affiliate may deduct (or require an Affiliate to
deduct) from any cash payments of any kind otherwise due the Participant, or with the consent of the Administrator, Shares
otherwise deliverable or vesting under an Award, to satisfy such tax or other obligations. Alternatively, the Company or its
Affiliate may require such Participant to pay to the Company or its Affiliate, in cash, promptly on demand, or make other
arrangements satisfactory to the Company or its Affiliate regarding the payment to the Company or its Affiliate of the
aggregate amount of any such taxes and other amounts. If Shares are deliverable upon exercise or payment of an Award, then,
unless restricted by the Administrator and subject to such procedures as the Administrator may specify, a Participant may
satisfy all or a portion of the Federal, state and local withholding tax obligations arising in connection with such Award by
electing to deliver other previously owned Shares. To the extent expressly permitted by the Administrator, a Participant may
satisfy all or a portion of the Federal, state and local withholding tax obligations arising in connection with an Award by
having the Company or its Affiliate withhold Shares otherwise issuable under the Award or tendering back Shares received in
connection with such Award. Notwithstanding anything to the contrary herein, the amount to be withheld in Shares may not
exceed the total minimum federal, state and local tax withholding obligations associated with the transaction to the extent
needed for the Company and its Affiliates to avoid an accounting charge until Accounting Standards Update 2016-09 applies to
the Company, after which time the amount to be withheld may not exceed the total maximum statutory tax rates associated with
the transaction. If an election is provided, the election must be made on or before the date as of which the amount of tax to be
withheld is determined and otherwise as the Administrator requires. In any case, the Company and its Affiliates may defer
making payment or delivery under any Award if any such tax may be pending unless and until indemnified to
its satisfaction.

 

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(b)   No Guarantee of Tax Treatment.
Notwithstanding any provisions of the Plan, the Company does not guarantee to any Participant or any other Person with an interest
in an Award that (i) any Award intended to be exempt from Code Section 409A shall be so exempt, (ii) any Award intended to comply
with Code Section 409A or Code Section 422 shall so comply, or (iii) any Award shall otherwise receive a specific tax treatment
under any other applicable tax law, nor in any such case will the Company or any Affiliate be required to indemnify, defend or
hold harmless any individual with respect to the tax consequences of any Award.

 

16.    Adjustment Provisions; Change
of Control.

 

(a)   Adjustment of Shares. If:
(i) the Company shall at any time be involved in a merger or other transaction in which the Shares are changed or exchanged; (ii)
the Company shall subdivide or combine the Shares or the Company shall declare a dividend payable in Shares, other securities (other
than stock purchase rights issued pursuant to a stockholder rights agreement) or other property; (iii) the Company shall effect
a cash dividend the amount of which, on a per Share basis, exceeds ten percent (10%) of the Fair Market Value of a Share at the
time the dividend is declared, or the Company shall effect any other dividend or other distribution on the Shares in the form of
cash, or a repurchase of Shares, that the Board determines by resolution is special or extraordinary in nature or that is in connection
with a transaction that the Company characterizes publicly as a recapitalization or reorganization involving the Shares; or (iv)
any other event shall occur, which, in the case of this clause (iv), in the judgment of the Administrator necessitates an adjustment
to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under this Plan, then the
Administrator shall, in such manner as it may deem equitable to prevent dilution or enlargement of the benefits or potential benefits
intended to be made available under this Plan, adjust as applicable: (A) the number and type of shares subject to this Plan
(including the number and type of shares described in Sections 5(a), (a) and (c)) and which may after the event be made the subject
of Awards; (B) the number and type of shares subject to outstanding Awards; (C) the grant, purchase, or exercise price
with respect to any Award; and (D) to the extent such discretion does not cause an Award that is intended to qualify as performance-based
compensation under Code Section 162(m) to lose its status as such, the Performance Goals of an Award. In any such case, the Administrator
may also (or in lieu of the foregoing) make provision for a cash payment to the holder of an outstanding Award in exchange for
the cancellation of all or a portion of the Award (without the consent of the holder of an Award) in an amount determined by the
Administrator effective at such time as the Administrator specifies (which may be the time such transaction or event is effective).
However, in each case, with respect to Awards of incentive stock options, no such adjustment may be authorized to the extent that
such authority would cause this Plan to violate Code Section 422(b). Further, the number of Shares subject to any Award payable
or denominated in Shares must always be a whole number. In any event, previously granted Options or SARs are subject to only such
adjustments as are necessary to maintain the relative proportionate interest the Options and SARs represented immediately prior
to any such event and to preserve, without exceeding, the value of such Options or SARs.

 

Without limitation, in the event of any reorganization,
merger, consolidation, combination or other similar corporate transaction or event, whether or not constituting a Change of Control
(other than any such transaction in which the Company is the continuing corporation and in which the outstanding Stock is not being
converted into or exchanged for different securities, cash or other property, or any combination thereof), the Administrator may
substitute, on an equitable basis as the Administrator determines, for each Share then subject to an Award and the Shares subject
to this Plan (if the Plan will continue in effect), the number and kind of shares of stock, other securities, cash or other property
to which holders of Stock are or will be entitled in respect of each Share pursuant to the transaction.

 

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Notwithstanding the foregoing, in the case
of a stock dividend (other than a stock dividend declared in lieu of an ordinary cash dividend) or subdivision or combination of
the Shares (including a reverse stock split), if no action is taken by the Administrator, adjustments contemplated by this subsection
that are proportionate shall nevertheless automatically be made as of the date of such stock dividend or subdivision or combination
of the Shares.

 

(b)   Issuance or Assumption. Notwithstanding
any other provision of this Plan, and without affecting the number of Shares otherwise reserved or available under this Plan, in
connection with any merger, consolidation, acquisition of property or stock, or reorganization, the Administrator may authorize
the issuance or assumption of awards under this Plan upon such terms and conditions as it may deem appropriate.

 

(c)   Change of Control. Unless
otherwise expressly provided in an Award agreement or another contract, including an employment agreement, or under the terms of
a transaction constituting a Change of Control, the Administrator may provide for the acceleration of the vesting or earning and,
if applicable, exercisability of any outstanding Award, or portion thereof, or the lapsing of any conditions or restrictions on
or the time for payment in respect of any outstanding Award, or portion thereof, upon a Change of Control or the termination of
the Participant’s employment following a Change of Control. In addition, unless otherwise expressly provided in an Award
agreement or another contract, including an employment agreement, or under the terms of a transaction constituting a Change of
Control, without limitation of the foregoing, the Administrator may provide that any or all of the following shall occur in connection
with a Change of Control: (a) the substitution for the Shares subject to any outstanding Award, or portion thereof, of stock or
other securities of the surviving corporation or any successor corporation to the Company, or a parent or subsidiary thereof, in
which event the aggregate purchase or exercise price, if any, of such Award, or portion thereof, shall remain the same, (b) the
conversion of any outstanding Award, or portion thereof, into a right to receive cash or other property upon or following the consummation
of the Change of Control in an amount equal to the value of the consideration to be received by holders of Shares in connection
with such transaction for one Share, less the per share purchase or exercise price of such Award, if any, multiplied by the number
of Shares subject to such Award, or a portion thereof, (c) acceleration of the vesting (and, as applicable, the exercisability)
of any and/or all outstanding Awards, (d) the cancellation of any outstanding and unexercised Awards upon or following the consummation
of the Change of Control (without the consent of an Award holder or any person with an interest in an Award), (e) in the case of
Options or SARs, the cancellation of all outstanding Options or SARs in exchange for a cash payment equal to the excess of the
Change of Control Price over the exercise price of the Shares subject to such Option or SAR upon the Change of Control (or for
no cash payment if such excess is zero), and/or (f) the cancellation of any Awards in exchange for a cash payment based on the
value of the Award as of the date of the Change of Control (or for no payment if the Award has no value).

 

For purposes of this Section 16, the “value”
of a Performance Share shall be equal to, and the “value” of a Performance Unit for which the value is equal to the
Fair Market Value of Shares shall be based on, the Change of Control Price. Notwithstanding anything to the contrary in this Section 16(c),
the terms of any Awards that are subject to Code Section 409A shall govern the treatment of such Awards upon a Change of Control,
and the terms of this Section 16(c) shall not apply, to the extent required for such Awards to remain compliant with Code
Section 409A, as applicable.

 

    10

     

    

 

(d)   Application of
Limits on Payments.

 

(i)          Determination of Cap
or Payment. Except to the extent the Participant has in effect an employment or similar agreement with the Company or any Affiliate
or is subject to a policy that provides for a more favorable result to the Participant upon a Change of Control, if any payments
or benefits paid by the Company pursuant to this Plan, including any accelerated vesting or similar provisions (“Plan Payments”),
would cause some or all of the Plan Payments in conjunction with any other payments made to or benefits received by a Participant
in connection with a Change of Control (such payments or benefits, together with the Plan Payments, the “Total Payments”)
to be subject to the tax (“Excise Tax”) imposed by Code Section 4999 but for this Section 16(d), then, notwithstanding
any other provision of this Plan to the contrary, the Total Payments shall be delivered either (A) in full or (B) in an amount
such that the value of the aggregate Total Payments that the Participant is entitled to receive shall be One Dollar ($1.00) less
than the maximum amount that the Participant may receive without being subject to the Excise Tax, whichever of (A) or (B) results
in the receipt by the Participant of the greatest benefit on an after-tax basis (taking into account applicable federal, state
and local income taxes and the Excise Tax).

 

(ii)           Procedures.

 

(A)   If a Participant or the
Company believes that a payment or benefit due the Participant will result in some or all of the Total Payments being subject to
the Excise Tax, then the Company, at its expense, shall obtain the opinion (which need not be unqualified) of nationally recognized
tax counsel (“National Tax Counsel”) selected by the Company (which may be regular outside counsel to the Company),
which opinion sets forth (1) the amount of the Base Period Income (as defined below), (2) the amount and present value of the Total
Payments, (3) the amount and present value of any excess parachute payments determined without regard to any reduction of Total
Payments pursuant to Section 6(a)(ii), and (4) the net after-tax proceeds to the Participant, taking into account applicable federal,
state and local income taxes and the Excise Tax if (x) the Total Payments were delivered in accordance with Section 16(d)(i)(A)
or (y) the Total Payments were delivered in accordance with Section 16(d)(i)(B). The opinion of National Tax Counsel shall be addressed
to the Company and the Participant and shall be binding upon the Company and the Participant. If such National Tax Counsel opinion
determines that Section 16(d)(i)(B) applies, then the Plan Payments or any other payment or benefit determined by such counsel
to be includable in the Total Payments shall be reduced or eliminated so that under the bases of calculations set forth in such
opinion there will be no excess parachute payment. In such event, payments or benefits included in the Total Payments shall be
reduced or eliminated by applying the following principles, in order: (1) the payment or benefit with the higher ratio of the parachute
payment value to present economic value (determined using reasonable actuarial assumptions) shall be reduced or eliminated before
a payment or benefit with a lower ratio; (2) the payment or benefit with the later possible payment date shall be reduced or eliminated
before a payment or benefit with an earlier payment date; and (3) cash payments shall be reduced prior to non-cash benefits; provided
that if the foregoing order of reduction or elimination would violate Code Section 409A, then the reduction shall be made pro rata
among the payments or benefits included in the Total Payments (on the basis of the relative present value of the parachute payments).

 

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(B)   For purposes of this Section
16: (1) the terms “excess parachute payment” and “parachute payments” shall have the meanings given in
Code Section 280G and such “parachute payments” shall be valued as provided therein; (2) present value shall be calculated
in accordance with Code Section 280G(d)(4); (3) the term “Base Period Income” means an amount equal to the Participant’s
“annualized includible compensation for the base period” as defined in Code Section 280G(d)(1); (4) for purposes of
the opinion of National Tax Counsel, the value of any noncash benefits or any deferred payment or benefit shall be determined by
the Company’s independent auditors in accordance with the principles of Code Sections 280G(d)(3) and (4); and (5) the Participant
shall be deemed to pay federal income tax and employment taxes at the highest marginal rate of federal income and employment taxation,
and state and local income taxes at the highest marginal rate of taxation in the state or locality of the Participant’s domicile,
net of the maximum reduction in federal income taxes that may be obtained from the deduction of such state and local taxes.

 

(C)   If National Tax Counsel
so requests in connection with the opinion required by this Section 16(d)(ii), the Company shall obtain, at the Company’s
expense, and the National Tax Counsel may rely on, the advice of a firm of recognized executive compensation consultants as to
the reasonableness of any item of compensation to be received by the Participant solely with respect to its status under Code Section
280G.

 

(D)   The Company agrees to bear
all costs associated with, and to indemnify and hold harmless the National Tax Counsel from, any and all claims, damages and expenses
resulting from or relating to its determinations pursuant to this Section 16, except for claims, damages or expenses resulting
from the gross negligence or willful misconduct of such firm.

 

(E)   This Section 16 shall be
amended to comply with any amendment or successor provision to Code Section 280G or Code Section 4999. If such provisions are repealed
without successor, then this Section 16(d) shall be cancelled without further effect.

 

17.   Miscellaneous.

 

(a)   Other Terms and Conditions.
The Administrator may provide in any Award agreement such other provisions (whether or not applicable to the Award granted to any
other Participant) as the Administrator determines appropriate to the extent not otherwise prohibited by the terms of the Plan.

 

(b)   Employment and Service. The
issuance of an Award shall not confer upon a Participant any right with respect to continued employment or service with the Company
or any Affiliate, or the right to continue as a Director. Unless determined otherwise by the Administrator, for purposes of the
Plan and all Awards, the following rules shall apply:

 

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(i)        a Participant who transfers
employment between the Company and its Affiliates, or between Affiliates, will not be considered to have terminated employment;

 

(ii)        a Participant who ceases
to be a Non-Employee Director because he or she becomes an employee of the Company or an Affiliate shall not be considered to have
ceased service as a Director with respect to any Award until such Participant’s termination of employment with the Company
and its Affiliates;

 

(iii)       a Participant who ceases
to be employed by the Company or an Affiliate and immediately thereafter becomes a Non-Employee Director, a non-employee director
of an Affiliate, or a consultant to the Company or any Affiliate shall not be considered to have terminated employment until such
Participant’s service as a director of, or consultant to, the Company and its Affiliates has ceased; and

 

(iv)       a Participant employed
by an Affiliate will be considered to have terminated employment when such entity ceases to be an Affiliate.

 

Notwithstanding the foregoing, for purposes
of an Award that is subject to Code Section 409A, if a Participant’s termination of employment or service triggers the payment
of compensation under such Award, then the Participant will be deemed to have terminated employment or service upon his or her
“separation from service” within the meaning of Code Section 409A. Notwithstanding any other provision in this Plan
or an Award to the contrary, if any Participant is a “specified employee” within the meaning of Code Section 409A as
of the date of his or her “separation from service” within the meaning of Code Section 409A, then, to the extent required
by Code Section 409A, any payment made to the Participant on account of such separation from service shall not be made before a
date that is six months after the date of the separation from service.

 

(c)   No Fractional Shares. No fractional
Shares or other securities may be issued or delivered pursuant to this Plan, and the Administrator may determine whether cash,
other securities or other property will be paid or transferred in lieu of any fractional Shares or other securities, or whether
such fractional Shares or other securities or any rights to fractional Shares or other securities will be canceled, terminated
or otherwise eliminated.

 

(d)   Unfunded Plan; Awards Not Includable
for Benefits Purposes. This Plan is unfunded and does not create, and should not be construed to create, a trust or separate
fund with respect to this Plan’s benefits. This Plan does not establish any fiduciary relationship between the Company and
any Participant or other person. To the extent any person holds any rights by virtue of an Award granted under this Plan, such
rights are no greater than the rights of the Company’s general unsecured creditors. Income recognized by a Participant pursuant
to an Award shall not be included in the determination of benefits under any employee pension benefit plan (as such term is defined
in Section 3(2) of the Employee Retirement Income Security Act of 1974, as amended) or group insurance or other benefit plans applicable
to the Participant which are maintained by the Company or any Affiliate, except as may be provided under the terms of such plans
or determined by resolution of the Board.

 

    13

     

    

 

(e)   Requirements of Law and Securities
Exchange. The granting of Awards and the issuance of Shares in connection with an Award are subject to all applicable laws,
rules and regulations and to such approvals by any governmental agencies or national securities exchanges as may be required. Notwithstanding
any other provision of this Plan or any award agreement, the Company has no liability to deliver any Shares under this Plan or
make any payment unless such delivery or payment would comply with all applicable laws and the applicable requirements of any securities
exchange or similar entity, and unless and until the Participant has taken all actions required by the Company in connection therewith.
The Company may impose such restrictions on any Shares issued under the Plan as the Company determines necessary or desirable to
comply with all applicable laws, rules and regulations or the requirements of any national securities exchanges.

 

(f)   Governing Law; Venue. This
Plan, and all agreements under this Plan, will be construed in accordance with and governed by the laws of the State of Maryland,
without reference to any conflict of law principles. Any legal action or proceeding with respect to this Plan, any Award or any
award agreement, or for recognition and enforcement of any judgment in respect of this Plan, any Award or any award agreement,
may only be brought and determined in (i) a court sitting in the State of California, and (ii) a “bench” trial, and
any party to such action or proceeding shall agree to waive its right to a jury trial.

 

(g)   Limitations on Actions. Any
legal action or proceeding with respect to this Plan, any Award or any award agreement, must be brought within one year (365 days)
after the day the complaining party first knew or should have known of the events giving rise to the complaint.

 

(h)   Construction. Whenever any
words are used herein in the masculine, they shall be construed as though they were used in the feminine in all cases where they
would so apply; and wherever any words are used in the singular or plural, they shall be construed as though they were used in
the plural or singular, as the case may be, in all cases where they would so apply. Titles of sections are for general information
only, and this Plan is not to be construed with reference to such titles.

 

(i)   Severability. If any provision
of this Plan or any award agreement or any Award (a) is or becomes or is deemed to be invalid, illegal or unenforceable in
any jurisdiction, or as to any person or Award, or (b) would disqualify this Plan, any award agreement or any Award under
any law the Administrator deems applicable, then such provision should be construed or deemed amended to conform to applicable
laws, or if it cannot be so construed or deemed amended without, in the determination of the Administrator, materially altering
the intent of this Plan, award agreement or Award, then such provision should be stricken as to such jurisdiction, person or Award,
and the remainder of this Plan, such award agreement and such Award will remain in full force and effect.

 

18.   Definitions. Capitalized
terms used in this Plan or any Award agreement have the following meanings, unless the Award agreement otherwise provides: 

 

(a)   “Administrator” means
the Committee; provided that, to the extent the Board has retained authority and responsibility as an Administrator of the
Plan, the term “Administrator” shall also mean the Board or, to the extent the Committee has delegated authority and
responsibility as an Administrator of the Plan to one or more officers of the Company as permitted by Section 2(b), the term
“Administrator” shall also mean such officer or officers.

 

(b)   “Affiliate” shall have
the meaning given in Rule 12b-2 under the Exchange Act. Notwithstanding the foregoing, for purposes of determining those individuals
to whom an Option or Stock Appreciation Right may be granted, the term “Affiliate” means any entity that, directly
or through one or more intermediaries, is controlled by, controls, or is under common control with, the Company within the meaning
of Code Sections 414(b) or (c); provided that, in applying such provisions, the phrase “at least 20 percent”
shall be used in place of “at least 80 percent” each place it appears therein.

 

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(c)   “Award” means a grant
of Options, Stock Appreciation Rights, Performance Shares, Performance Units, Restricted Stock, Restricted Stock Units, Shares,
an Annual Incentive Award, a Long-Term Incentive Award, Dividend Equivalent Units or any other type of award permitted under the
Plan.

 

(d)   “Board” means the Board
of Directors of the Company.

 

(e)   “Cause” means any of
the following as determined by the Company: (i) with respect to Participants other than Non-Employee Directors, (A) the failure
of the Participant to perform or observe any of the material terms or provisions of any written employment agreement between the
Participant and the Company or its Affiliates or, if no written agreement exists, the gross dereliction of the Participant’s
duties (for reasons other than the Participant’s Disability) with respect to the Company or its Affiliates; (B) the failure
of the Participant to comply fully with the lawful directives of the Board or the board of directors of an Affiliate of the Company,
as applicable, or the officers or supervisory employees to whom the Participant reports; (C) the Participant’s dishonesty,
misconduct, misappropriation of funds, or disloyalty or disparagement of the Company, any of its Affiliates or its management or
employees; or (D) other proper cause determined in good faith by the Administrator; or (ii) with respect to Non-Employee Directors,
(A) fraud or intentional misrepresentation; (B) embezzlement, misappropriation or conversion of assets or opportunities of the
Company or any of its Affiliates; or (C) any other gross or willful misconduct as determined by the Committee, in its sole and
conclusive discretion.

 

(f)   “Change of Control” means
the first to occur of the following with respect to the Company or any upstream holding company (which, for purposes of this definition,
shall be included in references to “the Company”):

 

(i)       Any “Person,”
as that term is defined in Sections 13(d) and 14(d) of the Exchange Act, but excluding the Company, any trustee or other fiduciary
holding securities under an employee benefit plan of the Company, or any corporation owned, directly or indirectly, by the stockholders
of the Company in substantially the same proportions as their ownership of stock of the Company, is or becomes the “Beneficial
Owner” (as that term is defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company
representing fifty percent (50%) or more of the combined voting power of the Company’s then outstanding securities;

 

(ii)       The Company is merged
or consolidated with any other corporation or other entity, other than: (A) a merger or consolidation which would result in the
voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding
or by being converted into voting securities of the surviving entity) more than fifty percent (50%) of the combined voting power
of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation; or
(B) the Company engages in a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction)
in which no “Person” (as defined above) acquires fifty percent (50%) or more of the combined voting power of the Company’s
then outstanding securities. Notwithstanding the foregoing, a merger or consolidation involving the Company shall not be considered
a “Change of Control” if the Company is the surviving corporation and shares of the Stock are not converted into or
exchanged for stock or securities of any other corporation, cash or any other thing of value, unless persons who beneficially owned
shares of the Stock outstanding immediately prior to such transaction own beneficially less than a majority of the outstanding
voting securities of the Company immediately following the merger or consolidation;

 

    15

     

    

 

(iii)        The Company or any Affiliate
sells, assigns or otherwise transfers assets in a transaction or series of related transactions, if the aggregate market value
of the assets so sold, assigned or otherwise transferred exceeds fifty percent (50%) of the Company’s consolidated book value,
determined by the Company in accordance with generally accepted accounting principles, measured at the time at which such transaction
occurs or the first of such series of related transactions occurs; provided that such a transfer effected pursuant to a
spin-off or split-up where stockholders of the Company retain ownership of the transferred assets proportionate to their pro rata
ownership interest in the Company shall not be deemed a “Change of Control”;

 

(iv)       The Company dissolves
and liquidates substantially all of its assets; or

 

(v)        At any time after the Effective
Date when the “Continuing Directors” cease to constitute a majority of the Board. For this purpose, a “Continuing
Director” shall mean: (A) the individuals who, at the Effective Date, constitute the Board; and (B) any new Directors (other
than Directors designated by a person who has entered into an agreement with the Company to effect a transaction described in clause
(i), (ii), or (iii) of this definition) whose appointment to the Board or nomination for election by Company stockholders was approved
by a vote of at least two-thirds of the then-serving Continuing Directors.

 

If an Award is considered deferred compensation
subject to the provisions of Code Section 409A, then the Administrator may include an amended definition of “Change of Control”
in the Award agreement issued with respect to such Award as necessary to comply with, or as necessary to permit a deferral under,
Code Section 409A.

 

(g)   “Change of Control Price”
means the highest of the following: (i) the Fair Market Value of the Shares, as determined on the date of the Change of Control;
(ii) the highest price per Share paid in the Change of Control transaction; or (iii) the Fair Market Value of the Shares, calculated
on the date of surrender of the relevant Award in accordance with Section 16(c), but this clause (iii) shall not apply if in the
Change of Control transaction, or pursuant to an agreement to which the Company is a party governing the Change of Control transaction,
all of the Shares are purchased for and/or converted into the right to receive a current payment of cash and no other securities
or other property.

 

(h)   “Code” means the Internal
Revenue Code of 1986, as amended. Any reference to a specific provision of the Code includes any successor provision and the regulations
promulgated under such provision.

 

(i)    “Committee” means the
Compensation Subcommittee of the Board, or such other committee of the Board that is designated by the Board with the same or similar
authority. The Committee shall consist only of Non-Employee Directors (not fewer than two (2)) who also qualify as Outside Directors
to the extent necessary for the Plan to comply with Rule 16b-3 promulgated under the Exchange Act or any successor rule and to
permit Awards that are otherwise eligible to qualify as “performance-based compensation” under Section 162(m) of the
Code to so qualify.

 

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(j)   “Company”
means Innovative Industrial Properties, Inc., a Maryland corporation, or any successor thereto.

 

(k)   “Director” means a member
of the Board; “Non-Employee Director” means a Director who is not also an employee of the Company or its Subsidiaries;
and “Outside Director” means a Director who qualifies as an outside director within the meaning of Code Section 162(m).

 

(l)   "Disability" means disability
as defined in the Company’s long-term disability plan covering exempt salaried employees, except as otherwise determined
by the Administrator and set forth in an Award agreement. The Administrator shall make the determination of Disability and may
request such evidence of disability as it reasonably determines.

 

(m)   “Dividend Equivalent Unit”
means the right to receive a payment, in cash or Shares, equal to the cash dividends or other distributions paid with respect to
a Share as described in Section 11.

 

(n)   “Exchange Act” means
the Securities Exchange Act of 1934, as amended. Any reference to a specific provision of the Exchange Act includes any successor
provision and the regulations and rules promulgated under such provision.

 

(o)   “Fair Market Value” means,
per Share on a particular date, the last sales price on such date on the national securities exchange on which the Stock is then
traded, as reported in The Wall Street Journal, or if no sales of Stock occur on the date in question, on the last preceding date
on which there was a sale on such exchange. If the Shares are not listed on a national securities exchange, but are traded in an
over-the-counter market, the last sales price (or, if there is no last sales price reported, the average of the closing bid and
asked prices) for the Shares on the particular date, or on the last preceding date on which there was a sale of Shares on that
market, will be used. If the Shares are neither listed on a national securities exchange nor traded in an over-the-counter market,
the price determined by the Administrator, in its discretion, will be used. If an actual sale of a Share occurs on the market,
then the Company may consider the sale price to be the Fair Market Value of such Share.

 

(p)   “Incentive Award” means
the right to receive a cash payment to the extent Performance Goals are achieved (or other requirements are met), and shall include
“Annual Incentive Awards” as described in Section 9 and “Long-Term Incentive Awards” as described in Section
10.

 

(q)   “Option” means the right
to purchase Shares at a stated price for a specified period of time.

 

(r)   “Participant” means an
individual selected by the Administrator to receive an Award.

 

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(s)   “Performance Goals” means
any goals the Administrator establishes that relate to one or more of the following with respect to the Company or any one or more
of its Subsidiaries, Affiliates or other business units: funds from operations; adjusted funds from operations, earnings before
any one or more of the following: interest, taxes, depreciation, amortization and/or stock compensation; operating (or gross) income
or profit; pretax income before allocation of corporate overhead and/or bonus; operating efficiencies; operating income as a percentage
of net revenue; return on equity, assets, capital, capital employed or investment; after tax operating income; net income; earnings
or book value per share; financial ratios; cash flow(s); total rental income or revenues; capital expenditures as a percentage
of rental income; total operating expenses, or some component or combination of components of total operating expenses, as a percentage
of rental income; stock price or total stockholder return, including any comparisons with stock market indices; appreciation in
or maintenance of the price of the Shares or any of the Company’s publicly-traded securities; dividends; debt or cost reduction;
comparisons with performance metrics of peer companies of the Company; comparisons of the Company’s stock price performance
to the stock price performance of peer companies; strategic business objectives, consisting of one or more objectives based on
meeting specified cost, acquisition or leasing targets, meeting or reducing budgeted expenditures, attaining division, group or
corporate financial goals, meeting business expansion goals and meeting goals relating to leasing, acquisitions, joint ventures
or collaborations or dispositions; economic value-added models; or any combination of any of the foregoing. As to each Performance
Goal, the relevant measurement of performance shall be computed in accordance with generally accepted accounting principles to
the extent applicable, but, unless otherwise determined by the Administrator, will exclude the effects of the following: (i) asset
impairments or write-downs; (ii) the effect of changes in tax laws, accounting principles, or other laws or provisions affecting
reported results; (iii) accruals for reorganization and restructuring programs; (iv) extraordinary, unusual and/or non-recurring
items of income, expense, gain or loss, that, in case of each of the foregoing, the Company identifies in its publicly filed periodic
or current reports, its audited financial statements, including notes to the financial statements, or the Management’s Discussion
and Analysis section of the Company’s annual report; (v) foreign exchange gains and losses, (vi) the effect of
adverse federal, governmental or regulatory action, or delays in federal, governmental or regulatory action; (vii) impacts
on interest expense, preferred dividends and share dilution as a result of debt and capital transactions; and (viii) any other
event either not directly related to operations or not within the reasonable control of management.
With respect to any Award intended to qualify as performance-based compensation under Code Section 162(m) and not subject
to the transition period under Treasury Reg. Section 1.162-27(f)(2), such exclusions shall be made only to the extent consistent
with Code Section 162(m). To the extent consistent with Code Section 162(m), the Administrator may also provide for other adjustments
to Performance Goals in the Award agreement or plan document evidencing any Award. In addition, the Administrator may appropriately
adjust any evaluation of performance under a Performance Goal to exclude any of the following events that occurs during a performance
period: (i) litigation, claims, judgments or settlements; (ii) the effects of changes in other laws or regulations affecting reported
results; and (iii) accruals of any amounts for payment under this Plan or any other compensation arrangements maintained by the
Company; provided that, with respect to any Award intended to qualify as performance-based compensation under Code Section
162(m), such adjustment may be made only to the extent consistent with Code Section 162(m). Where applicable, the Performance Goals
may be expressed, without limitation, in terms of attaining a specified level of the particular criterion or the attainment of
an increase or decrease (expressed as absolute numbers, averages and/or percentages) in the particular criterion or achievement
in relation to a peer group or other index. The Performance Goals may include a threshold level of performance below which no payment
will be made (or no vesting will occur), levels of performance at which specified payments will be paid (or specified vesting will
occur), and a maximum level of performance above which no additional payment will be made (or at which full vesting will occur).
In addition, in the case of Awards that the Administrator determines at the date of grant will not be considered “performance-based
compensation” under Code Section 162(m) or will be subject to the transition period under Treasury Reg. Section 1.162-27(f)(2),
the Administrator may establish other Performance Goals and provide for other exclusions or adjustments not listed in this Plan.

 

(t)   “Performance Shares”
means the right to receive Shares to the extent Performance Goals are achieved (or other requirements are met) as described in
Section 8.

 

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(u)   “Performance Unit” means
the right to receive a cash payment and/or Shares valued in relation to a unit that has a designated dollar value or the value
of which is equal to the Fair Market Value of one or more Shares, to the extent Performance Goals are achieved (or other requirements
are met) as described in Section 8.

 

(v)   “Person” has the meaning
given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, or any group of Persons
acting in concert that would be considered “persons acting as a group” within the meaning of Treas. Reg. § 1.409A-3(i)(5).

 

(w)   “Plan”
means this Innovative Industrial Properties, Inc. 2016 Omnibus Incentive Plan, as may be amended from time to time.

 

(x)   “Restricted Stock” means
a Share that is subject to a risk of forfeiture or restrictions on transfer, or both a risk of forfeiture and restrictions on transfer,
as described in Section 8.

 

(y)   “Restricted Stock Unit”
means the right to receive a cash payment and/or Shares equal to the Fair Market Value of one Share that is subject to a risk of
forfeiture or restrictions on transfer, or both a risk of forfeiture and restrictions on transfer, as described in Section 8.

 

(z)    “Retirement” means termination
of employment or service with the Company and its Affiliates on or after the date the Participant has both attained age sixty (60)
and completed ten (10) years of service with the Company and its Affiliates.

 

(aa)   “Section 16 Participants”
means Participants who are subject to the provisions of Section 16 of the Exchange Act.

 

(bb)   “Share” means a share
of Stock.

 

(cc)   “Stock” means the Class
A common stock of the Company.

 

(dd)   “Stock Appreciation Right”
or “SAR” means the right to receive cash, and/or Shares with a Fair Market Value, equal to the appreciation of the
Fair Market Value of a Share during a specified period of time.

 

(ee)   “Subsidiary” means any
corporation, limited liability company or other limited liability entity in an unbroken chain of entities beginning with the Company
if each of the entities (other than the last entities in the chain) owns the stock or equity interest possessing more than fifty
percent (50%) of the total combined voting power of all classes of stock or other equity interests in one of the other entities
in the chain.

 

    19Exhibit 10.2

INDEMNIFICATION AGREEMENT

 

THIS INDEMNIFICATION AGREEMENT (“Agreement”)
is made and entered into as of the                day of                 ,
                        ,
by and between Innovative Industrial Properties, Inc., a Maryland corporation (the “Company”), and                                   
(“Indemnitee”).

 

WHEREAS, at the request of the Company, Indemnitee
currently serves as a director and officer of the Company and may, therefore, be subjected to claims, suits or proceedings
arising as a result of Indemnitee’s service; and

 

WHEREAS, as an inducement to Indemnitee to continue
to serve as a director and officer, the Company has agreed to indemnify and to advance expenses and costs incurred by Indemnitee
in connection with any such claims, suits or proceedings, to the maximum extent permitted by law; and

 

WHEREAS, the parties by this Agreement desire
to set forth their agreement regarding indemnification and advance of expenses.

 

NOW, THEREFORE, in consideration of the premises
and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:

 

Section 1.          Definitions.
For purposes of this Agreement:

 

(a)          “Change
in Control” means a change in control of the Company occurring after the Effective Date of a nature that would be required
to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or in response to any similar item on any similar
schedule or form) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), whether
or not the Company is then subject to such reporting requirement; provided, however, that, without limitation, such a Change in
Control shall be deemed to have occurred if, after the Effective Date (i) any “person” (as such term is used in Sections
13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Company representing 15% or more of the combined voting power of all of the
Company’s then-outstanding securities entitled to vote generally in the election of directors without the prior approval
of at least two-thirds of the members of the Board of Directors in office immediately prior to such person’s attaining such
percentage interest; (ii) the Company is a party to a merger, consolidation, sale of assets, plan of liquidation or other reorganization
not approved by at least two-thirds of the members of the Board of Directors then in office, as a consequence of which members
of the Board of Directors in office immediately prior to such transaction or event constitute less than a majority of the Board
of Directors thereafter; or (iii) at any time, a majority of the members of the Board of Directors are not individuals (A) who
were directors as of the Effective Date or (B) whose election by the Board of Directors or nomination for election by the Company’s
stockholders was approved by the affirmative vote of at least two-thirds of the directors then in office who were directors as
of the Effective Date or whose election for nomination for election was previously so approved.

 

     

     

    

 

(b)          “Corporate
Status” means the status of a person as a present or former director, officer, employee or agent of the Company or as a director,
trustee, officer, partner, manager, managing member, fiduciary, employee or agent of any other foreign or domestic corporation,
partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise that such person is or
was serving in such capacity at the request of the Company. As a clarification and without limiting the circumstances in which
Indemnitee may be serving at the request of the Company, service by Indemnitee shall be deemed to be at the request of the Company
if Indemnitee serves or served as a director, trustee, officer, partner, manager, managing member, fiduciary, employee or agent
of any corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise (i)
of which a majority of the voting power or equity interest is owned directly or indirectly by the Company or (ii) the management
of which is controlled directly or indirectly by the Company.

 

(c)          “Disinterested
Director” means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification
and/or advance of Expenses is sought by Indemnitee.

 

(d)          “Effective
Date” means the date set forth in the first paragraph of this Agreement.

 

(e)          “Expenses”
means any and all reasonable and out-of-pocket attorneys’ fees and costs, retainers, court costs, transcript costs, fees
of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery
service fees, federal, state, local or foreign taxes imposed on Indemnitee as a result of the actual or deemed receipt of any payments
under this Agreement, ERISA excise taxes and penalties and any other disbursements or expenses incurred in connection with prosecuting,
defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in or otherwise participating in
a Proceeding. Expenses shall also include Expenses incurred in connection with any appeal resulting from any Proceeding including,
without limitation, the premium, security for and other costs relating to any cost bond, supersedeas bond or other appeal bond
or its equivalent.

 

(f)          “Independent
Counsel” means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither is, nor
in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such
party (other than with respect to matters concerning Indemnitee under this Agreement or of other indemnitees under similar indemnification
agreements), or (ii) any other party to or participant or witness in the Proceeding giving rise to a claim for indemnification
or advance of Expenses hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any
person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing
either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement.

 

(g)          “Proceeding”
means any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry,
administrative hearing, or any other proceeding, whether brought by or in the right of the Company or otherwise and whether of
a civil (including intentional or unintentional tort claims), criminal, administrative or investigative (formal or informal) nature,
including any appeal therefrom, except one pending or completed on or before the Effective Date, unless otherwise specifically
agreed in writing by the Company and Indemnitee. If Indemnitee reasonably believes that a given situation may lead to or culminate
in the institution of a Proceeding, such situation shall also be considered a Proceeding.

 

    	 	2

     

    

 

Section 2.          Services
by Indemnitee. Indemnitee serves as a director and officer of the Company. However, this Agreement shall not impose
any independent obligation on Indemnitee or the Company to continue Indemnitee’s service to the Company. This Agreement shall
not be deemed an employment contract between the Company (or any other entity) and Indemnitee.

 

Section 3.          General.
The Company shall indemnify, and advance Expenses to, Indemnitee (a) as provided in this Agreement and (b) otherwise
to the maximum extent permitted by Maryland law in effect on the Effective Date and as amended from time to time; provided, however,
that no change in Maryland law shall have the effect of reducing the benefits available to Indemnitee hereunder based on Maryland
law as in effect on the Effective Date. The rights of Indemnitee provided in this Section 3 shall include, without limitation,
the rights set forth in the other sections of this Agreement, including any additional indemnification permitted by Section 2-418(g)
of the Maryland General Corporation Law (the “MGCL”).

 

Section 4.          Standard
for Indemnification. If, by reason of Indemnitee’s Corporate Status, Indemnitee is, or is threatened to be, made a party
to any Proceeding, the Company shall indemnify Indemnitee against all judgments, penalties, fines and amounts paid in settlement
and all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with any such Proceeding
unless it is established that (a) the act or omission of Indemnitee was material to the matter giving rise to the Proceeding
and (i) was committed in bad faith or (ii) was the result of active and deliberate dishonesty, (b) Indemnitee actually
received an improper personal benefit in money, property or services or (c) in the case of any criminal Proceeding, Indemnitee
had reasonable cause to believe that Indemnitee’s conduct was unlawful.

 

Section 5.          Certain
Limits on Indemnification. Notwithstanding any other provision of this Agreement (other than Section 6), Indemnitee shall not
be entitled to:

 

(a)          indemnification
hereunder if the Proceeding was one by or in the right of the Company and Indemnitee is adjudged to be liable to the Company;

 

(b)          indemnification
hereunder if Indemnitee is adjudged to be liable on the basis that personal benefit was improperly received in any Proceeding charging
improper personal benefit to Indemnitee, whether or not involving action in the Indemnitee’s Corporate Status; or

 

(c)          indemnification
or advance of Expenses hereunder if the Proceeding was brought by Indemnitee, unless: (i) the Proceeding was brought to enforce
indemnification under this Agreement, and then only to the extent in accordance with and as authorized by Section 12 of this Agreement,
or (ii) the Company’s charter or Bylaws, a resolution of the stockholders entitled to vote generally in the election
of directors or of the Board of Directors or an agreement approved by the Board of Directors to which the Company is a party expressly
provide otherwise.

 

    	 	3

     

    

 

Section 6.          Court-Ordered
Indemnification. Notwithstanding any other provision of this Agreement, a court of appropriate jurisdiction, upon application
of Indemnitee and such notice as the court shall require, may order indemnification of Indemnitee by the Company in the following
circumstances:

 

(a)          if
such court determines that Indemnitee is entitled to reimbursement under Section 2-418(d)(1) of the MGCL, the court shall order
indemnification, in which case Indemnitee shall be entitled to recover the Expenses of securing such reimbursement; or

 

(b)          if
such court determines that Indemnitee is fairly and reasonably entitled to indemnification in view of all the relevant circumstances,
whether or not Indemnitee (i) has met the standards of conduct set forth in Section 2-418(b) of the MGCL or (ii) has
been adjudged liable for receipt of an improper personal benefit under Section 2-418(c) of the MGCL, the court may order such indemnification
as the court shall deem proper. However, indemnification with respect to any Proceeding by or in the right of the Company or in
which liability shall have been adjudged in the circumstances described in Section 2-418(c) of the MGCL shall be limited to
Expenses.

 

Section 7.          Indemnification
for Expenses of an Indemnitee Who is Wholly or Partially Successful. Notwithstanding any other provision of this Agreement,
and without limiting any such provision, to the extent that Indemnitee was or is, by reason of Indemnitee’s Corporate Status,
made a party to (or otherwise becomes a participant in) any Proceeding and is successful, on the merits or otherwise, in the defense
of such Proceeding, Indemnitee shall be indemnified for all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s
behalf in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise,
as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee under
this Section 7 for all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with
each such claim, issue or matter, allocated on a reasonable and proportionate basis. For purposes of this Section 7 and, without
limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be
deemed to be a successful result as to such claim, issue or matter.

 

Section 8.          Advance
of Expenses for Indemnitee. If, by reason of Indemnitee’s Corporate Status, Indemnitee is, or is threatened to be, made
a party to any Proceeding, the Company shall, without requiring a preliminary determination of Indemnitee’s ultimate entitlement
to indemnification hereunder, advance all reasonable Expenses incurred by or on behalf of Indemnitee in connection with such Proceeding
within ten days after the receipt by the Company of a statement or statements requesting such advance or advances from time to
time, whether prior to or after final disposition of such Proceeding. Such statement or statements shall reasonably evidence the
Expenses incurred by Indemnitee and shall include or be preceded or accompanied by a written affirmation by Indemnitee of Indemnitee’s
good faith belief that the standard of conduct necessary for indemnification by the Company as authorized by law and by this Agreement
has been met and a written undertaking by or on behalf of Indemnitee, in substantially the form attached hereto as Exhibit A
or in such form as may be required under applicable law as in effect at the time of the execution thereof, to reimburse the portion
of any Expenses advanced to Indemnitee relating to claims, issues or matters in the Proceeding as to which it shall ultimately
be established that the standard of conduct has not been met by Indemnitee and which have not been successfully resolved as described
in Section 7 of this Agreement. To the extent that Expenses advanced to Indemnitee do not relate to a specific claim, issue or
matter in the Proceeding, such Expenses shall be allocated on a reasonable and proportionate basis. The undertaking required by
this Section 8 shall be an unlimited general obligation by or on behalf of Indemnitee and shall be accepted without reference to
Indemnitee’s financial ability to repay such advanced Expenses and without any requirement to post security therefor.

 

    	 	4

     

    

 

Section 9.          Indemnification
and Advance of Expenses as a Witness or Proceeding Participant. Notwithstanding any other provision of this Agreement, to the
extent that Indemnitee is or may be, by reason of Indemnitee’s Corporate Status, made a witness or otherwise asked to participate
in any Proceeding, whether instituted by the Company or any other party, and to which Indemnitee is not a party, Indemnitee shall
be advanced all reasonable Expenses and indemnified against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s
behalf in connection therewith within ten days after the receipt by the Company of a statement or statements requesting such advance
or advances from time to time, whether prior to or after final disposition of such Proceeding. Such statement or statements shall
reasonably evidence the Expenses incurred by Indemnitee.

 

Section 10.         Procedure
for Determination of Entitlement to Indemnification.

 

(a)          To
obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith
such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and
to what extent Indemnitee is entitled to indemnification. Indemnitee may submit one or more such requests from time to time and
at such time(s) as Indemnitee deems appropriate in Indemnitee’s sole discretion. The officer of the Company receiving any
such request from Indemnitee shall, promptly upon receipt of such a request for indemnification, advise the Board of Directors
in writing that Indemnitee has requested indemnification.

 

(b)          Upon
written request by Indemnitee for indemnification pursuant to Section 10(a) above, a determination, if required by applicable law,
with respect to Indemnitee’s entitlement thereto shall promptly be made in the specific case: (i) if a Change in Control
shall have occurred, by Independent Counsel, in a written opinion to the Board of Directors, a copy of which shall be delivered
to Indemnitee, which Independent Counsel shall be selected by the Indemnitee and approved by the Board of Directors in accordance
with Section 2-418(e)(2)(ii) of the MGCL, which approval shall not be unreasonably withheld; or (ii) if a Change in Control
shall not have occurred, (A) by the Board of Directors by a majority vote of a quorum consisting of Disinterested Directors or,
if such a quorum cannot be obtained, then by a majority vote of a duly authorized committee of the Board of Directors consisting
solely of one or more Disinterested Directors, (B) if Independent Counsel has been selected by the Board of Directors in accordance
with Section 2-418(e)(2)(ii) of the MGCL and approved by the Indemnitee, which approval shall not be unreasonably withheld, by
Independent Counsel, in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee or (C) if
so directed by a majority of the members of the Board of Directors, by the stockholders of the Company. If it is so determined
that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten days after such determination. Indemnitee
shall cooperate with the person, persons or entity making such determination with respect to Indemnitee’s entitlement to
indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information
which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary
to such determination in the discretion of the Board of Directors or Independent Counsel if retained pursuant to clause (ii)(B)
of this Section 10(b). Any Expenses incurred by Indemnitee in so cooperating with the person, persons or entity making such determination
shall be borne by the Company (irrespective of the determination as to Indemnitee’s entitlement to indemnification) and the
Company shall indemnify and hold Indemnitee harmless therefrom.

 

    	 	5

     

    

 

(c)          The
Company shall pay the reasonable fees and expenses of Independent Counsel, if one is appointed.

 

Section 11.         Presumptions
and Effect of Certain Proceedings.

 

(a)          In
making any determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such
determination shall presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request
for indemnification in accordance with Section 10(a) of this Agreement, and the Company shall have the burden of proof to
overcome that presumption in connection with the making of any determination contrary to that presumption.

 

(b)          The
termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, upon a plea
of nolo contendere or its equivalent, or entry of an order of probation prior to judgment, does not create a presumption
that Indemnitee did not meet the requisite standard of conduct described herein for indemnification.

 

(c)          The
knowledge and/or actions, or failure to act, of any other director, officer, employee or agent of the Company or any other director,
trustee, officer, partner, manager, managing member, fiduciary, employee or agent of any other foreign or domestic corporation,
partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise shall not be imputed to
Indemnitee for purposes of determining any other right to indemnification under this Agreement.

 

Section 12.         Remedies
of Indemnitee.

 

(a)          If
(i) a determination is made pursuant to Section 10(b) of this Agreement that Indemnitee is not entitled to indemnification
under this Agreement, (ii) advance of Expenses is not timely made pursuant to Section 8 of this Agreement, (iii) no determination
of entitlement to indemnification shall have been made pursuant to Section 10(b) of this Agreement within 60 days after receipt
by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to Section 7 of this
Agreement within ten days after receipt by the Company of a written request therefor, or (v) payment of indemnification pursuant
to any other section of this Agreement or the charter or Bylaws of the Company is not made within ten days after a determination
has been made that Indemnitee is entitled to indemnification, Indemnitee shall be entitled to an adjudication in an appropriate
court located in the State of Maryland, or in any other court of competent jurisdiction, of Indemnitee’s entitlement to such
indemnification or advance of Expenses. Alternatively, Indemnitee, at Indemnitee’s option, may seek an award in arbitration
to be conducted by a single arbitrator pursuant to the Commercial Arbitration Rules of the American Arbitration Association. Indemnitee
shall commence a proceeding seeking an adjudication or an award in arbitration within 180 days following the date on which Indemnitee
first has the right to commence such proceeding pursuant to this Section 12(a); provided, however, that the foregoing clause
shall not apply to a proceeding brought by Indemnitee to enforce Indemnitee’s rights under Section 7 of this Agreement. Except
as set forth herein, the provisions of Maryland law (without regard to its conflicts of laws rules) shall apply to any such arbitration.
The Company shall not oppose Indemnitee’s right to seek any such adjudication or award in arbitration.

 

    	 	6

     

    

 

(b)          In
any judicial proceeding or arbitration commenced pursuant to this Section 12, Indemnitee shall be presumed to be entitled
to indemnification or advance of Expenses, as the case may be, under this Agreement and the Company shall have the burden of proving
that Indemnitee is not entitled to indemnification or advance of Expenses, as the case may be. If Indemnitee commences a judicial
proceeding or arbitration pursuant to this Section 12, Indemnitee shall not be required to reimburse the Company for any advances
pursuant to Section 8 of this Agreement until a final determination is made with respect to Indemnitee’s entitlement to indemnification
(as to which all rights of appeal have been exhausted or lapsed). The Company shall, to the fullest extent not prohibited by law,
be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 12 that the procedures
and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such
arbitrator that the Company is bound by all of the provisions of this Agreement.

 

(c)          If
a determination shall have been made pursuant to Section 10(b) of this Agreement that Indemnitee is entitled to indemnification,
the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 12,
absent a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s
statement not materially misleading, in connection with the request for indemnification.

 

(d)          In
the event that Indemnitee, pursuant to this Section 12, seeks a judicial adjudication of or an award in arbitration to enforce
Indemnitee’s rights under, or to recover damages for breach of, this Agreement, Indemnitee shall be entitled to recover from
the Company, and shall be indemnified by the Company for, any and all Expenses actually and reasonably incurred by Indemnitee in
such judicial adjudication or arbitration. If it shall be determined in such judicial adjudication or arbitration that Indemnitee
is entitled to receive part but not all of the indemnification or advance of Expenses sought, the Expenses incurred by Indemnitee
in connection with such judicial adjudication or arbitration shall be appropriately prorated.

 

(e)          Interest
shall be paid by the Company to Indemnitee at the maximum rate allowed to be charged for judgments under the Courts and Judicial
Proceedings Article of the Annotated Code of Maryland for amounts which the Company pays or is obligated to pay for the period
(i) commencing with either the tenth day after the date on which the Company was requested to advance Expenses in accordance with
Section 8 of this Agreement or the 60th day after the date on which the Company was requested to make the determination of entitlement
to indemnification under Section 12(a) above and (ii) ending on the date such payment is made to Indemnitee by the Company.

 

    	 	7

     

    

 

Section 13.         Defense
of the Underlying Proceeding.

 

(a)          Indemnitee
shall notify the Company promptly in writing upon being served with any summons, citation, subpoena, complaint, indictment, request
or other document relating to any Proceeding which may result in the right to indemnification or the advance of Expenses hereunder
and shall include with such notice a description of the nature of the Proceeding and a summary of the facts underlying the Proceeding.
The failure to give any such notice shall not disqualify Indemnitee from the right, or otherwise affect in any manner any right
of Indemnitee, to indemnification or the advance of Expenses under this Agreement unless the Company’s ability to defend
in such Proceeding or to obtain proceeds under any insurance policy is materially and adversely prejudiced thereby, and then only
to the extent the Company is thereby actually so prejudiced.

 

(b)          Subject
to the provisions of the last sentence of this Section 13(b) and of Section 13(c) below, the Company shall have the right
to defend Indemnitee in any Proceeding which may give rise to indemnification hereunder; provided, however, that the Company shall
notify Indemnitee of any such decision to defend within 15 calendar days following receipt of notice of any such Proceeding under
Section 13(a) above. The Company shall not, without the prior written consent of Indemnitee, which shall not be unreasonably
withheld or delayed, consent to the entry of any judgment against Indemnitee or enter into any settlement or compromise which (i) includes
an admission of fault of Indemnitee, (ii) does not include, as an unconditional term thereof, the full release of Indemnitee
from all liability in respect of such Proceeding, which release shall be in form and substance reasonably satisfactory to Indemnitee
or (iii) would impose any Expense, judgment, fine, penalty or limitation on Indemnitee. This Section 13(b) shall not
apply to a Proceeding brought by Indemnitee under Section 12 of this Agreement.

 

(c)          Notwithstanding
the provisions of Section 13(b) above, if in a Proceeding to which Indemnitee is a party by reason of Indemnitee’s Corporate
Status, (i) Indemnitee reasonably concludes, based upon an opinion of counsel approved by the Company, which approval shall
not be unreasonably withheld, that Indemnitee may have separate defenses or counterclaims to assert with respect to any issue which
may not be consistent with other defendants in such Proceeding, (ii) Indemnitee reasonably concludes, based upon an opinion
of counsel approved by the Company, which approval shall not be unreasonably withheld, that an actual or apparent conflict of interest
or potential conflict of interest exists between Indemnitee and the Company, or (iii) if the Company fails to assume the defense
of such Proceeding in a timely manner, Indemnitee shall be entitled to be represented by separate legal counsel of Indemnitee’s
choice, subject to the prior approval of the Company, which approval shall not be unreasonably withheld, at the expense of the
Company. In addition, if the Company fails to comply with any of its obligations under this Agreement or in the event that the
Company or any other person takes any action to declare this Agreement void or unenforceable, or institutes any Proceeding to deny
or to recover from Indemnitee the benefits intended to be provided to Indemnitee hereunder, Indemnitee shall have the right to
retain counsel of Indemnitee’s choice, subject to the prior approval of the Company, which approval shall not be unreasonably
withheld, at the expense of the Company (subject to Section 12(d) of this Agreement), to represent Indemnitee in connection
with any such matter.

 

    	 	8

     

    

 

Section 14.        Non-Exclusivity;
Survival of Rights; Subrogation.

 

(a)          The
rights of indemnification and advance of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights
to which Indemnitee may at any time be entitled under applicable law, the charter or Bylaws of the Company, any agreement or a
resolution of the stockholders entitled to vote generally in the election of directors or of the Board of Directors, or otherwise.
Unless consented to in writing by Indemnitee, no amendment, alteration or repeal of this Agreement or of any provision hereof shall
limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in
Indemnitee’s Corporate Status prior to such amendment, alteration or repeal, regardless of whether a claim with respect to
such action or inaction is raised prior or subsequent to such amendment, alteration or repeal. No right or remedy herein conferred
is intended to be exclusive of any other right or remedy, and every other right or remedy shall be cumulative and in addition to
every other right or remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion of any
right or remedy hereunder, or otherwise, shall not prohibit the concurrent assertion or employment of any other right or remedy.

 

(b)          In
the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights
of recovery of Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including
execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.

 

Section 15.        Insurance.
The Company will use its reasonable best efforts to acquire directors and officers liability insurance, on terms and conditions
deemed appropriate by the Board of Directors, with the advice of counsel, covering Indemnitee or any claim made against Indemnitee
by reason of Indemnitee’s Corporate Status and covering the Company for any indemnification or advance of Expenses made by
the Company to Indemnitee for any claims made against Indemnitee by reason of Indemnitee’s Corporate Status; provided that
such insurance may, but shall not be required to, include employed lawyers professional liability coverage. Without in any way
limiting any other obligation under this Agreement, the Company shall indemnify Indemnitee for any payment by Indemnitee arising
out of the amount of any deductible or retention and the amount of any excess of the aggregate of all judgments, penalties, fines,
settlements and Expenses incurred by Indemnitee in connection with a Proceeding over the coverage of any insurance referred to
in the previous sentence. The purchase, establishment and maintenance of any such insurance shall not in any way limit or affect
the rights or obligations of the Company or Indemnitee under this Agreement except as expressly provided herein, and the execution
and delivery of this Agreement by the Company and the Indemnitee shall not in any way limit or affect the rights or obligations
of the Company under any such insurance policies. If, at the time the Company receives notice from any source of a Proceeding to
which Indemnitee is a party or a participant (as a witness or otherwise) the Company has director and officer liability insurance
in effect, the Company shall give prompt notice of such Proceeding to the insurers in accordance with the procedures set forth
in the respective policies.

 

    	 	9

     

    

 

Section 16.         Coordination
of Payments. The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable or
payable or reimbursable as Expenses hereunder if and to the extent that Indemnitee has otherwise actually received such payment
under any insurance policy, contract, agreement or otherwise.

 

Section 17.         Reports
to Stockholders. To the extent required by the MGCL, the Company shall report in writing to its stockholders the payment of
any amounts for indemnification of, or advance of Expenses to, Indemnitee under this Agreement arising out of a Proceeding by or
in the right of the Company with the notice of the meeting of stockholders of the Company next following the date of the payment
of any such indemnification or advance of Expenses or prior to such meeting.

 

Section 18.         Duration
of Agreement; Binding Effect.

 

(a)          This
Agreement shall continue until and terminate on the later of (i) the date that Indemnitee shall have ceased to serve as a
director, officer, employee or agent of the Company or as a director, trustee, officer, partner, manager, managing member,
fiduciary, employee or agent of any other foreign or domestic corporation, real estate investment trust, partnership, limited
liability company, joint venture, trust, employee benefit plan or other enterprise that such person is or was serving in such capacity
at the request of the Company and (ii) the date that Indemnitee is no longer subject to any actual or possible Proceeding (including
any rights of appeal thereto and any Proceeding commenced by Indemnitee pursuant to Section 12 of this Agreement).

 

(b)          The
indemnification and advance of Expenses provided by, or granted pursuant to, this Agreement shall be binding upon and be enforceable
by the parties hereto and their respective successors and assigns (including any direct or indirect successor by purchase, merger,
consolidation or otherwise to all or substantially all of the business or assets of the Company), shall continue as to an Indemnitee
who has ceased to be a director, officer, employee or agent of the Company or a director, trustee, officer, partner, manager, managing
member, fiduciary, employee or agent of any other foreign or domestic corporation, partnership, limited liability company, joint
venture, trust, employee benefit plan or other enterprise that such person is or was serving in such capacity at the request of
the Company, and shall inure to the benefit of Indemnitee and Indemnitee’s spouse, assigns, heirs, devisees, executors and
administrators and other legal representatives.

 

(c)          The
Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all,
substantially all or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance
satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that
the Company would be required to perform if no such succession had taken place.

 

    	 	10

     

    

 

(d)          The
Company and Indemnitee agree hereby that a monetary remedy for breach of this Agreement, at some later date, may be inadequate,
impracticable and difficult of proof, and further agree that such breach may cause Indemnitee irreparable harm. Accordingly, the
parties hereto agree that Indemnitee may enforce this Agreement by seeking injunctive relief and/or specific performance hereof,
without any necessity of showing actual damage or irreparable harm and that by seeking injunctive relief and/or specific performance,
Indemnitee shall not be precluded from seeking or obtaining any other relief to which Indemnitee may be entitled. Indemnitee shall
further be entitled to such specific performance and injunctive relief, including temporary restraining orders, preliminary injunctions
and permanent injunctions, without the necessity of posting bonds or other undertakings in connection therewith. The Company acknowledges
that, in the absence of a waiver, a bond or undertaking may be required of Indemnitee by a court, and the Company hereby waives
any such requirement of such a bond or undertaking.

 

Section 19.         Severability.
If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever:
(a) the validity, legality and enforceability of the remaining provisions of this Agreement (including, without limitation,
each portion of any Section, paragraph or sentence of this Agreement containing any such provision held to be invalid, illegal
or unenforceable that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and
shall remain enforceable to the fullest extent permitted by law; (b) such provision or provisions shall be deemed reformed
to the extent necessary to conform to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to
the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any Section, paragraph
or sentence of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid,
illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.

 

Section 20.         Identical
Counterparts. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to
be an original but all of which together shall constitute one and the same Agreement. One such counterpart signed by the party
against whom enforceability is sought shall be sufficient to evidence the existence of this Agreement.

 

Section 21.         Headings.
The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of
this Agreement or to affect the construction thereof.

 

Section 22.         Modification
and Waiver. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both
of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any
other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.

 

Section 23.         Notices.
All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given
if (i) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed,
on the day of such delivery, or (ii) mailed by certified or registered mail with postage prepaid, on the third business day
after the date on which it is so mailed:

 

    	 	11

     

    

 

(a)          If
to Indemnitee, to the address set forth on the signature page hereto.

 

(b)          If
to the Company, to:

 

	 	Innovative Industrial Properties, Inc.	 
	 	17190 Bernardo Center Drive	 
	 	San Diego, CA 92128	 
	 	Attn: General Counsel	 

 

or to such other address as may have been furnished in writing to
Indemnitee by the Company or to the Company by Indemnitee, as the case may be.

 

Section 24.         Governing
Law. The parties agree that this Agreement shall be governed by, and construed and enforced in accordance with, the laws of
the State of Maryland, without regard to its conflicts of laws rules.

 

Section 25.         Miscellaneous.
Use of the masculine pronoun shall be deemed to include usage of the feminine pronoun where appropriate.

 

[SIGNATURE PAGE FOLLOWS]

 

    	 	12

     

    

 

IN WITNESS WHEREOF, the parties hereto have
executed this Agreement as of the day and year first above written.

 

	 	 	INNOVATIVE INDUSTRIAL
	 	 	PROPERTIES, INC.
	 	 	 
	 	By:  	 
	 	 	Name:
	 	 	Title:
	 	 	 
	 	INDEMNITEE
	 	 	 
	 	 
	 	Name:	 
	 	Address:	 

 

    	 	13

     

    

 

EXHIBIT A

 

FORM OF AFFIRMATION
AND UNDERTAKING TO REPAY EXPENSES ADVANCED

 

To: The Board of Directors of Innovative Industrial Properties,
Inc.

 

Re: Undertaking to Repay Expenses Advanced

 

Ladies and Gentlemen:

 

This affirmation and undertaking is being provided
pursuant to that certain Indemnification Agreement dated the _____ day of ______________, 20____, by and between Innovative Industrial
Properties, Inc., a Maryland corporation (the “Company”), and the undersigned Indemnitee (the “Indemnification
Agreement”), pursuant to which I am entitled to advance of Expenses in connection with [Description of Proceeding]
(the “Proceeding”).

 

Terms used herein and not otherwise defined
shall have the meanings specified in the Indemnification Agreement.

 

I am subject to the Proceeding by reason of
my Corporate Status or by reason of alleged actions or omissions by me in such capacity. I hereby affirm my good faith belief that
at all times, insofar as I was involved as a director and/or officer of the Company, in any of the facts or events giving
rise to the Proceeding, I (1) did not act with bad faith or active or deliberate dishonesty, (2) did not receive any
improper personal benefit in money, property or services and (3) in the case of any criminal proceeding, had no reasonable
cause to believe that any act or omission by me was unlawful.

 

In consideration of the advance of Expenses
by the Company for reasonable attorneys’ fees and related Expenses incurred by me in connection with the Proceeding (the
“Advanced Expenses”), I hereby agree that if, in connection with the Proceeding, it is established that (1) an
act or omission by me was material to the matter giving rise to the Proceeding and (a) was committed in bad faith or (b) was
the result of active and deliberate dishonesty or (2) I actually received an improper personal benefit in money, property
or services or (3) in the case of any criminal proceeding, I had reasonable cause to believe that the act or omission was
unlawful, then I shall promptly reimburse the portion of the Advanced Expenses relating to the claims, issues or matters in the
Proceeding as to which the foregoing findings have been established.

 

IN WITNESS WHEREOF, I have executed this Affirmation
and Undertaking on this ___ day of ____________________, 20____.

 

	 	Name:	 

 

    	 	14

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