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Cresco Labs Closes Sale-and-leaseback Deal For Massachusetts Marijuana Facility

Cresco Labs Inc., a multi-state cannabis operator, said it has closed an agreement to sell and lease back its marijuana facility in Fall River, Massachusetts to Innovative Industrial Properties, Inc. or IIP.

This is Cresco's fifth sale-and-leaseback agreement with IIP, a real estate company focused on the regulated U.S. cannabis industry.

Cresco Labs noted that the sale was for about $29 million and includes $21 million in funding for tenant improvements.

The Fall River property represents about 118,000 square feet of industrial space and includes cultivation space, a processing facility, and dispensary that serves both adult use and medical marijuana patients in Fall River.

In June, Cresco entered into amendments to its leases with IIP for its Michigan and Ohio properties. According to the company, the lease amendments made available an additional $17 million in funding for further improvements of the cannabis cultivation and processing facilities at the properties.

Cresco Labs said in April that it completed the sale-and-leaseback transaction for its Marshall, Michigan property to IIP. The sale of the property was for $16 million and marked Cresco's fifth completed sale-and-leaseback transaction, its fourth with IIP.

"IIP has proven to be a reliable partner, and we are thrilled to work with them for a fifth lease. This transaction, along with our expanded real estate partnership with IIP is allowing us to continue building out Cresco's presence in three exciting markets: Massachusetts, Michigan, and Ohio," said Cresco Labs CEO and Co-founder Charlie Bachtell.

Along with the closing of the sale of the Fall River property, Cresco Labs said it will enter into a long-term, triple-net lease agreement with IIP and continue to operate the property as a licensed cannabis cultivation, processing and dispensing facility upon completion of redevelopment.

As of July 1, 2020, IIP owned 58 properties located in several U.S. states and totaling about 4.4 million rentable square feet, which were 99.2 percent leased.

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