Innovative Industrial Properties (IIPR) announced on December 19, 2024, that PharmaCann Inc. defaulted on its rent obligations for December under six of its eleven leases. These eleven leases collectively represented 17% of IIP’s total rental revenues for the three and nine months ended September 30, 2024. The December rent, including base rent, property management fees, and estimated tax and insurance payments, for these six properties totaled $4.2 million.
IIP applied security deposits held under these leases to cover the defaulted rent, late penalties, and interest in full. Despite PharmaCann paying rent in full for the remaining five leases, totaling $90,000 for December, cross-default provisions in each lease triggered a default on all eleven leases.
The company stated it is continuing discussions with PharmaCann and expects to aggressively enforce its rights under the leases. This enforcement may include commencing eviction proceedings as deemed necessary by IIP. This widespread default by a significant tenant represents a material challenge to IIP's revenue stability.
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