IIPR reaches a deal with Harvest Health
Innovative Industrial Properties (IIPR) closed on the sale/leaseback of a Harvest Health & Recreation (HRVSF) property in Alachua, FL. The purchase price was $23.8M. The facility is a cultivation and processing facility. Harvest is expected to complete additional tenant improvements, which IIPR will reimburse up to $10.8M. The improvements would bring IIPR’s investment up to $34.6M. The Alachua property is the first transaction with Harvest, which has 12 cultivation processing locations. IIPR still has a small presence in Florida, one of the largest and fastest-growing medical-use cannabis markets poised for even more growth when it eventually legalizes adult-use.
State-level growth in 2020
There were several growth drivers in 2020 for cannabis, including government stimulus funds, higher unemployment checks, fewer spending occasions with lockdown restrictions, and increased working from home that will be difficult to disaggregate from the underlying demand growth. The pace of sales generally improving during the year in several states, as seen in the chart below, shows the sector's momentum. There were headwinds in some states like the drop in tourism in Colorado and Nevada that were still overcome by the sector's underlying strength.
Market share trends in Florida (TCNNF, LHSIF/AYRWF, CURLF, GTBIF, CCHWF)
The Florida Office of Medical Marijuana Use (OMMU) releases updated cannabis data every Friday.
For the week ending January 22nd, the number of qualified patients in Florida’s medical marijuana program grew 0.4% WoW to 467,405 qualified patients with active ID cards. THC in mgs sold decreased 0.9% WoW to 146.9 million mgs, CBD in mgs sold increased 4.0% WoW to 3.5 million mgs, and flower in oz. sold increased 7.8% WoW to 53,211 oz. sold.
Florida’s medical marijuana marketplace has strong potential – the state’s medical marijuana program still has a runway for population penetration, edibles were just introduced to the market in August, and there’s a broad range of qualifying medical conditions, notably ‘severe and chronic pain.’ The rising tide that is patient volume growth lifts all ships.
