INNOVATIVE INDUSTRIAL PROPERTIES INC

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549​

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a)

of the Securities Exchange Act of 1934

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Filed by a Party other than the Registrant ☐

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Preliminary Proxy Statement

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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

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Definitive Proxy Statement

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Definitive Additional Materials

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Soliciting Material Pursuant to § 240.14a-12

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INNOVATIVE INDUSTRIAL PROPERTIES, INC.

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(Name of Registrant as Specified In Its Charter)

Not Applicable

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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check all boxes that apply):

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No fee required.

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Fee paid previously with preliminary materials.

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Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11.

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Innovative Industrial Properties, Inc.

11440 West Bernardo Court, Suite 100

San Diego, CA 92127

Dear Stockholder:

You are cordially invited to attend our 2024 Annual Meeting of Stockholders (the “Annual Meeting”) to be held at 8:00 a.m., Pacific Time on May 15, 2024 at our San Diego offices located at 11440 West Bernardo Court, Suite 100, San Diego, California 92127. The business that will be conducted at the Annual Meeting is described in the Notice of the 2024 Annual Meeting of Stockholders and Proxy Statement.

We would like to take this opportunity to highlight notable achievements during this past year, which was in the context of what we saw as a very challenging macroeconomic environment, including for the industry that we serve.

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Note: Dollars in thousands.

(1)

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(2)

Adjusted funds from operations (“AFFO”) is a supplemental non-GAAP financial measure used in the real estate industry to measure and compare the operating performance of real estate companies. A complete reconciliation containing adjustments from GAAP net income attributable to common stockholders to AFFO is included in Appendix A of the proxy statement.

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(1)

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(2)

Includes common stock dividends declared during the applicable year.

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(1)

Total stockholder return (“TSR”) from December 1, 2016 (the date that our common stock first began trading on the New York Stock Exchange) through December 31, 2023, calculated based on the stock price appreciation and dividends paid to show the total return to a stockholder over a period of time. TSR assumes dividends are reinvested in common stock on the day the dividend is paid.

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(2)

A real estate investment trust is a “REIT”. The MSCI US REIT Index includes all tax-qualified equity REITs listed in the United States.

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(1)

As of December 31, 2023, unless otherwise noted.

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(2)

Calculated in accordance with the indenture governing the Company’s 5.50% Unsecured Senior Notes due 2026.

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(3)

In February 2024, the remaining $4.4 million principal amount of the Company’s 3.75% Exchangeable Senior Notes due 2024 was exchanged or paid off in full.

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(4)

Consisting of cash and cash equivalents and short-term investments (each as reported on our consolidated balance sheet as of December 31, 2023) and availability under our revolving credit facility as of December 31, 2023.

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Environmental, Social and Governance Focus

In September 2023, we issued our third annual Sustainability Report, which provides detail on our environmental, social and governance (“ESG”) initiatives. Our report can be found in the Sustainability section of our corporate website, and we encourage you to read the Sustainability Report to understand the significant value we place on ESG initiatives in support of our employees, tenant partners and the communities we serve. Information that is presented or hyperlinked on our website is not incorporated by reference into this proxy statement.

Investing in Our Team

Our employees are our most valuable asset, and we believe we have an inclusive and engaging work environment, where each person is an integral member of the team who is critical to our continued success. Attracting, developing, engaging and retaining our gifted team members, who help create long-term value for our stockholders, is an absolute priority.

In March 2023, we announced the appointment of David Smith as our chief financial officer and treasurer, and the promotions of Catherine Hastings to chief operating officer and Ben Regin to chief investment officer. Mr. Smith brings decades of experience with public and private REITs, including companies focused on real estate for the regulated cannabis industry. Ms. Hastings and Mr. Regin have been instrumental in our success to date, both having joined the company shortly after our initial public offering, and we believe that their proven strength in leadership and execution will continue to be significant contributors in executing on our strategic objectives in the coming years.

To nurture an engaging work environment, invest in our employees and foster a sense of shared purpose, we offer a variety of programs aimed at bettering the lives of our team members, including:

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Highly competitive compensation (including salary, bonuses and equity), including a 401(k) plan with matching contributions;

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A best-in-class benefits package, with comprehensive health insurance for each employee and their immediate family at no cost to the employee, including but not limited to a high coverage, low-deductible PPO medical plan, PPO dental coverage, a generous vision plan, short and long-term disability benefits and life and accidental death and dismemberment coverage;

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Competitive paid time off consisting of initially four weeks each year, which are in addition to company paid holidays;

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A severance plan applicable to all non-executive employees that assists with each employee’s financial security in the event his or her employment is terminated without cause or he or she resigns for good reason;

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A wellness reimbursement benefit for fitness and mindfulness applications, classes and home exercise equipment that encourages our employees to stay mentally and physically fit;

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A physical work environment designed for health and well-being, including sit-stand desks, ergonomic chairs, healthy snack options (including fresh fruits and vegetables), maximized natural light at all workspaces, and weekly voluntary meditation classes;

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Paid time for volunteering at non-profit organizations;

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Assistance and support to employees who are working towards obtaining job-related licenses and relevant certifications as well as professional and technical continuing education; and

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Matching contributions from the company for employee donations to qualifying educational institutions.

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Our team of dedicated professionals brings together a collective set of backgrounds, experience and insight that we believe are critical to our continued success. We include selected demographics of our employees in the charts below:

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Note: Employee demographics as of December 31, 2023 and based on employee self-identification, other than age.

(1)

We define underrepresented community as “an individual who self-identifies as Black, African American, Hispanic, Latino, Asian (inclusive of individuals who self-identify as South Asian or Indian), Pacific Islander, Native American, Native Hawaiian, or Alaska Native, or who self-identifies as gay, lesbian, bisexual, or transgender.”

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Investing in Our Communities

We believe the most significant impact we and our tenant partners have is the positive economic benefit that we and our tenants bring to our own communities and the communities where our facilities are located. We recognize that our operations, and those of our tenants, have the potential to transform thousands of lives in the communities where our properties are located. Many of these communities have experienced significant hardships, most notably losses in jobs and commerce due to industry disruption and migration to other geographies. However, together with our tenant partners, we have demonstrated the ability to bring back good jobs, economic activity and much needed benefits to the people of these communities, in addition to key tax revenues that drive reinvigoration of local services, schools and healthcare.

We and our tenant partners, as well as our individual employees and board members, also continued to focus on donating time, expertise and financial resources across a wide spectrum of social initiatives throughout 2023, which we highlighted in our Sustainability Report.

Investing in Our Properties

Our properties are mission-critical for our tenant partners, with specialized buildouts designed for precision environmental controls that are an absolute priority for production of high-quality, consistent cannabis products at scale. The nature of our business model and the relationships we have with our tenants means that we are providing the capital resources necessary for them to make a variety of upgrades to the properties. Because cannabis cultivation requires significant amounts of energy, water and various other inputs to optimize yields and desired attributes of the particular product being manufactured, the capital we provide often is used for energy, water and other improvements that allow the tenants to operate their business more efficiently and with lower environmental impacts. As we highlighted through case studies in our Sustainability Report, many of our projects focus on the redevelopment of existing industrial buildings, revitalizing previously vacant or under-utilized buildings, which translates into dramatic reductions of demolition and landfill disposal, driving embodied carbon savings.

We also partner with our tenants in certain situations to significantly improve energy efficiency and environmental performance of our properties, including funding of improvements such as lighting upgrades, installation of building management systems, implementation of storm water management systems, heating, ventilation and air conditioning upgrades, tiered cultivation, advanced irrigation systems, health and safety systems and greenhouse construction.

Corporate Governance Highlights

Effective governance is central to our value proposition for all of our stakeholders, including our stockholders. We operate in a very young, highly regulated and rapidly evolving industry that necessitates strong management, and unwavering commitment to ethics and compliance and the ability to adapt quickly to new market conditions. We continue to maintain the following corporate governance practices to enhance the company’s reputation for integrity and serving our stockholders responsibly:

Especially in the context of the challenging macroeconomic conditions and headwinds experienced during the past two years by the regulated cannabis industry, I am so proud of what our dedicated team of professionals has been able to accomplish in the continued execution of our business strategy. As we consistently note, we believe the best years of this dynamic industry are yet to come, and we look forward to supporting our tenant partners as the go-to, long-term real estate partner for many years to come. We thank you as always for your tremendous support, and we are steadfast in our commitment as responsible stewards of your investment and to continue to create enduring, long-term value for our stockholders.

Executive Chairman of the Board

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

DATE & TIME

8:00 a.m., Pacific Time, on May 15, 2024

PLACE

Innovative Industrial Properties, Inc. 11440 West Bernardo Court, Suite 100 San Diego, CA 92127

ITEMS OF BUSINESS

To elect six directors, each to serve until the 2025 annual meeting of stockholders and until his or her successor is duly elected and qualified.

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To ratify the appointment of BDO USA, P.C. as our independent registered public accounting firm for the year ending December 31, 2024.

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To conduct an advisory vote on the compensation of our named executive officers as disclosed in this proxy statement.

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To transact such other business as may be properly presented at the Annual Meeting or any postponement or adjournment of the meeting.

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RECORD DATE

You are entitled to vote at the Annual Meeting if you were a stockholder of record as of the close of business on March 15, 2024.

PROXY MATERIALS

This notice of meeting, the proxy statement, the proxy card, and our 2023 annual report to stockholders, which is not part of the proxy solicitation materials, are available at https://www.cstproxy.com/innovativeindustrialproperties/2024.

PROXY VOTING

We first mailed the Notice of Availability of Proxy Materials to Stockholders on April 3, 2024. If you received a Notice of Internet Availability of Proxy Materials by mail, you will not receive a printed copy of the proxy materials in the mail. Instead, the Notice of Internet Availability of Proxy Materials instructs you on how to access and review this proxy statement and our 2023 annual report and how to authorize your proxy online or by telephone. If you received a Notice of Internet Availability of Proxy Materials by mail and would like to receive a printed copy of our proxy materials, you should follow the instructions for requesting such materials included in the Notice of Internet Availability of Proxy Materials. We are also sending a paper copy of the proxy materials to any stockholder who has elected to receive its proxy materials by mail. Your proxy is important. Whether or not you plan to attend the Annual Meeting, please authorize your proxy by Internet or telephone, or, if you received a paper copy of the materials by mail, please mark, sign, date and return your proxy card, so that your shares will be represented at the Annual Meeting. If you plan to attend the Annual Meeting and wish to vote your shares personally, you may withdraw your proxy and vote in person at any time before the proxy is voted.

By Order of the Board of Directors,

Executive Chairman of the Board