Cannabis real estate manager Innovative Industrial Properties (IIP) is claiming that multistate operator PharmaCann has defaulted on several of its leases across the country.
IIP, a San Diego-based-headquartered real estate investment trust (REIT), alleges in a news release that PharmaCann defaulted on December rent obligations totaling $4.2 million on six properties located in Illinois, Massachusetts, Michigan, New York, Ohio and Pennsylvania.
IIP said it applied security deposits it held pursuant to the leases for the payment of the defaulted rent, in addition to late penalties and interest.
Although Chicago-headquartered PharmaCann paid full December rent on its remaining five leases totaling $90,000, a cross-default provision requiring payment for all its leases led to defaults even for the fully paid leases, IIP alleges.
The companies are in negotiations regarding the leases.
IIP indicated it plans to enforce its lease obligations aggressively, including commencing eviction proceedings, if necessary.
Jeremy Unruh, a spokesperson PharmaCann, intimated a deal will be reached.
“We do not view this action as a material impediment to resolving outstanding issues with IIP,” Unruh told MJBizDaily on Monday via email.
“Throughout this period, PharmaCann remains committed to delivering the high-quality, patient- and consumer-focused products and services that have defined PharmaCann for the past decade.”
PharmaCann’s 11 leases with IIP subsidiaries represent 17% of total rental revenue in the September quarter and the first nine months of the year, the REIT alleges.
Chris Casacchia can be reached at chris.casacchia@mjbizdaily.com.
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