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  "documentTitle": "Innovative Industrial Properties, Inc. (IIPR)",
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  "sourceTypeSlug": "short_seller",
  "sourceTypeLabel": "Short seller",
  "presentationDate": "2020-04-09 00:00:00",
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      "text": "Is this a sign that the company is about to throw in the towel and declare bankruptcy?",
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      "text": "The aggregate represents a total investment of $89,109,000 (excluding the remaining tenant improvements available but not used totaling $42,400,000) and a total annual rental income of approximately $18,794,000.",
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      "text": "PharmaCann acquired by MedMen for US$680M in October 2018 but the transaction was terminated a year later by MedMen in October 2019. The latest available financials for PharmaCann, filed as exhibits to publicly traded MedMen’s financials, paint a devastating picture. As of June 30, 2019, PharmaCann’s balance sheet looked horrendous, having accumulated $101,882,753 in liabilities, and the majority of the $13,870,311 in other assets consists of goodwill. PharmaCann was running at a quarterly burn from operations of $6.5M and was in urgent need of continuous financing to survive. With cash of $13,441,003 in the bank as of June 30, 2019 PharmaCann had about two quarters left (excluding investing activities) before it ran dry without outside financing. With the MedMen deal falling apart, PharmaCann might be in serious solvency issues, and we found more strong signs for that during our due diligence.",
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      "text": "PharmaCann represents IIPR first and most important tenant in terms of income, representing more than one quarter of its total rental revenue with 26.2% in 2019 and 17% of the expected rental revenue in 2020.",
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      "text": "PharmaCann’s Co-founder and Chief Executive Officer, Teddy Scott, who was involved in the company since its inception in 2014, resigned from his position in August 2019.",
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      "text": "We spoke with several industry experts who confirmed PharmaCann is in a dire financial situation. We were also told that due to funding challenges and HSR provisions (antitrust) restricting integration efforts, PharmaCann operations were set back by over a year.",
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      "text": "PharmaCann is a private cannabis operator and under a lease agreement with IIPR for 5 properties. Those properties are located in different states: New York, Massachusetts, Pennsylvania, Ohio and Illinois. Again, all individual leases are listed in the Appendix.",
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      "text": "All of PharmaCann’s cultivation properties are now encumbered so it doesn’t have further sale-leaseback alternatives and with private capital in cannabis heavily challenged, the company’s financial position can only become more dire. PharmaCann canceled in February 2020 the $4.0M construction funding commitment for its Pennsylvania facility. Is this a sign that the company is about to throw in the towel and declare bankruptcy?",
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      "text": "The MedMen deal failing apart had additional immediate negative consequences for PharmaCann. As part of the termination agreement, PharmaCann paid a termination fee to MedMen through a transfer of the membership interests in three entities (including a cultivation facility and two retail location in Illinois, as well as a license for vertically integrated facility in Virginia), which further deteriorated its credit quality. MedMen had advanced PharmaCann $3.4 million in the period between December 23, 2018 and June 30, 2019.",
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      "text": "2.1 PharmaCann – IIPR’s By Far Biggest Client",
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