According to a filing with the U.S. Securities and Exchange Commission (SEC), Kings Garden has defaulted on its base rent and property management fees for July. It’s also defaulting on certain insurance premiums for those properties.
Kings Garden rents its properties from a subsidiary of Innovative Industrial Properties. With today’s news, it won’t be paying $1.8 million in base rent and property management fees, as well as $382,000 of insurance premiums. This has Innovative Industrial Properties losing out on roughly $2.2 million.
As noted in the SEC filing, Innovative Industrial Properties is still in discussions with Kings Garden concerning its leases. The company also notes its in talks with other operators for the potential re-leasing of certain properties.
Innovative Industrial Properties is a company that manages properties leased out to marijuana companies. It’s based out of San Diego, Calif, but has properties available across the U.S.
The bad news for IIPR stock comes alongside a positive catalyst for the marijuana industry. Senate Democrats are planning to introduce a marijuana legalization bill as early as next week. The only problem will be getting aid from Republicans to pass the bill. Reports claim there’s already pushback on that matter.
IIPR stock is down 13.4% as of Friday morning.
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On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.