A new San Diego-based real estate investment company, focused on medical-use cannabis facilities and led by former BioMed Realty CEO Alan Gold, has filed for a $175 million initial public offering of its common stock.
The real estate investment trust, called Innovative Industrial Properties Inc., lists a Rancho Bernardo address as its main office. According to a recent filing with the Securities and Exchange Commission, the company has filed to sell 8.75 million shares of Class A common stock at $20 per share, and has been approved to list shares on the New York Stock Exchange.
The company made its initial filing on Oct. 17 and revised the filing on Nov. 7. Its prospectus indicates that its real estate investments will consist of primarily industrial properties “suitable for cultivation and production of medical-use cannabis.”
The company describes itself as a newly-formed, self-advised Maryland corporation “focused on the acquisition, ownership and management of specialized industrial properties leased to experienced, state-licensed operators for their regulated medical-use cannabis facilities.”
The prospectus indicates the company does not currently own any properties, and has identified only one property to acquire, though it is not specified. The prospectus cautions that because medical-use cannabis remains illegal under federal law, federal enforcement would “likely result in our inability and the inability of our tenants to execute our respective business plans.”
The fledgling company may be unable to invest proceeds from the offering on acceptable terms, or at all, and the prospectus cautions that laws currently favorable in many states toward medical-use marijuana could be altered in the future, adversely impacting the business plan.
Innovative Industrial Properties is looking to focus its holdings in California, New York, Illinois, Maryland, Arizona, Washington, Nevada, Massachusetts and Oregon.
It was not immediately known how the new REIT’s plans might be impacted by the recent increase in states allowing the sale of marijuana for recreational use. With the passage of Prop. 64 on Nov. 8, California joined seven other states in legalizing recreational use; medical-use marijuana was already legal in California and other states under specific conditions.
According to its website, the new company is led by Executive Chairman Gold, a 30-year real estate industry veteran who previously co-founded two prominent firms focused on life science office and lab properties – San Diego’s BioMed Realty and Pasadena-based Alexandria Real Estate Equities Inc.
Most recently, Gold was chairman and CEO of Rancho Bernardo-headquartered BioMed Realty, leaving that company in mid-2016 after New York-based Blackstone Group closed on its $8 billion acquisition of BioMed.
Other listed executives at Innovative Industrial Properties include CEO and President Paul Smithers, Chief Financial Officer Robert Sistek, and Chief Accounting Officer and Treasurer Greg Fahey. Sistek was formerly with BioMed, and Fahey was formerly with San Diego’s Realty Income Corp.
CEO Smithers is an attorney who previously served as co-founder and chief legal officer of Iso Nano International LLC, a designer and manufacturer of advanced materials for use in industries including aerospace and electronics.
