NewLake Capital Partners, Inc.

Note 1 -Organization

NewLake Capital Partners, Inc. (the “Company”), a Maryland corporation, was formed on April 9, 2019, originally as GreenAcreage Real Estate Corp. (“GARE”). The Company is an internally managed Real Estate Investment Trust (“REIT”) focused on providing long-term, single-tenant, triple-net sale-leaseback and build-to-suit transactions for the cannabis industry. The Company conducts its operations through its subsidiary, NLCP Operating Partnership LP, a Delaware limited partnership (the “Operating Partnership” or “OP”). The Company is the sole managing general partner of the Operating Partnership. The Company's common stock trades on the OTCQX® Best Market (the "OTCQX") operated by the OTC Markets Group, Inc., under the symbol “NLCP”.

Note 2 -Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited consolidated financial statements and related notes have been prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) for interim financial statements and with the instructions to Form 10-Q and Article 10 of Regulation S-X. They do not include all of the information and footnotes required by GAAP for complete financial statements. The consolidated financial statements include the accounts of the Company, the Operating Partnership, as well as any wholly owned subsidiaries of the Operating Partnership and variable interest entities (“VIEs”) in which the Company is considered the primary beneficiary. All significant intercompany balances and transactions have been eliminated in the consolidated financial statements. The results of operations for the three and six months ended June 30, 2025 are not necessarily indicative of the operating results for the full year or any future period. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, and filed with the Securities and Exchange Commission (“SEC”) on March 6, 2025. In management's opinion, all adjustments (which include normal recurring adjustments) necessary to present fairly the Company’s financial position, results of operations and cash flows have been made.

Variable Interest Entities

The Company consolidates a VIE in which it is considered the primary beneficiary. The primary beneficiary is the entity that has: (i) the power to direct the activities that most significantly impact the entity's economic performance and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could be significant to the VIE.

NLCP Operating Partnership LP

The Operating Partnership is a VIE because the holders of limited partnership interests do not have substantive kick-out rights or participating rights. Furthermore, the Company is the primary beneficiary of the Operating Partnership because it has the obligation to absorb losses and the right to receive benefits from the Operating Partnership and the exclusive power to direct the activities of the Operating Partnership. As of June 30, 2025 and December 31, 2024, the assets and liabilities of the Company and the Operating Partnership were substantially the same, as the Company does not have any significant assets other than its investment in the Operating Partnership.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Management will adjust such estimates when facts and circumstances dictate. Such

Note 2 - Basis of Presentation and Summary of Significant Accounting Policies (continued)

estimates include, but are not limited to, useful lives for depreciation of property and corporate assets, the fair value of acquired real estate and in-place lease intangibles acquired and the valuation of stock-based compensation. Actual results could differ from those estimates.

Significant Accounting Policies

There have been no changes to the Company's accounting policies included in Note 2 to the Consolidated Financial Statements of the Company's Annual Report on Form 10-K for the year ended December 31, 2024.

Recently Issued Accounting Pronouncements

Note 3 -Real Estate

As of June 30, 2025, the Company owned 34 properties, located in 12 states. The following table presents the Company's real estate portfolio as of June 30, 2025 (in thousands):

(1) Includes construction in progress in the amount of $2.0 million that had been funded as of June 30, 2025.

(2) A portion of this investment is currently under development or undergoing building or tenant improvements. Once the development or improvements are completed and placed-in service, the Company will begin depreciating the applicable part of the property.

(3) This property was formerly operated by Acreage.

(4) This property was formerly operated by Greenlight.

(5) This property was formerly operated by Organic Remedies.

(6) At times, numbers in this table may differ due to rounding.

Real Estate Acquisitions

2025 Acquisitions

During the six months ended June 30, 2025, the Company acquired three dispensaries and committed to fund $1,080 thousand in improvements (refer to the 2025 Improvement Allowances table below for details). These properties were simultaneously leased to a related entity of an existing tenant.

The following table presents the real estate acquisition for the six months ended June 30, 2025 (in thousands):

(1) This dispensary was acquired through a like-kind exchange and was recorded at its fair value. For further details, refer to the "2025 Disposition" section below.

2025 Disposition

On June 12, 2025, the Company completed a deed-for-deed like-kind exchange with Curaleaf, involving the transfer of its dispensary located in Mokena, IL for a dispensary located in Brookville, PA. The transaction was structured as a nonmonetary exchange with no cash consideration. Upon completion of the exchange, the Brookville property received by the Company was leased to an existing tenant under a new operating lease. The Brookville dispensary was recorded at its fair value of $950 thousand and the Company recognized a de minimis loss on the exchange. For additional details, refer to the acquisition summary in the table above.

2024 Acquisition

In May 2024, the Company purchased a cultivation facility and committed to fund approximately $12.0 million in improvements (refer to the 2024 Improvement Allowances table below for details). The property was simultaneously leased to a related entity of an existing tenant.

The following table presents the real estate acquisition for the year ended December 31, 2024 (in thousands):

Real Estate Commitments

2025 Improvement Allowances

The following table presents the funded and remaining unfunded commitments as of June 30, 2025 (in thousands):

2024 Improvement Allowances

The following table presents the funded commitments and the remaining unfunded commitments for the year ended December 31, 2024 (in thousands):

Construction in Progress

As of June 30, 2025 and December 31, 2024, funded commitments totaling approximately $2.0 million were recorded in Construction in Progress ("CIP"). The Company classified CIP within "Buildings and Improvements" in the accompanying consolidated balance sheets.

2025 and 2024 Construction in Progress

There were no additions to CIP during the six months ended June 30, 2025. Accordingly, the following table presents the CIP balance for both June 30, 2025 and December 31, 2024 (in thousands):

(1) These properties were under development or undergoing building or tenant improvements as of June 30, 2025 and December 31, 2024. Once the development or the improvements are completed for its intended use, the assets will be placed-in-service and the Company will begin depreciation.

In-place Leases

The following table presents the future amortization of the Company’s acquired in-place leases as of June 30, 2025 (in thousands):

Depreciation and Amortization

For the three months ended June 30, 2025 and 2024, depreciation expense on the Company's real estate assets was approximately $3.4 million and $3.1 million, respectively. Depreciation expense on the Company's real estate assets for the six months ended June 30, 2025 and 2024, was approximately $6.8 million and $6.2 million, respectively.

Amortization of the Company’s acquired in-place lease intangible assets was approximately $0.5 million for both the three months ended June 30, 2025 and 2024. Amortization of the Company’s acquired in-place lease intangible assets was approximately $1.0 million for both the six months ended June 30, 2025 and 2024. The acquired in-place lease intangible assets have a weighted average remaining amortization period of approximately 8.77 years.

Real Estate Impairment

The Company did not identify any situations in its review of tenant activities and changes in the business condition for any of its properties that would require the recognition of a real estate impairment loss. Accordingly, the Company didnot record a real estate impairment loss for the three and six months ended June 30, 2025 and 2024, respectively.

Note 4 -Leases

As Lessor

The Company's properties are leased to single tenants on a long-term, triple-net basis, which obligates the tenant to be responsible for the ongoing expenses of a property, in addition to its rent obligations. Under certain circumstances the Company will pay for certain expenses on behalf of the tenant and the tenant is required to reimburse the Company. The presentation in the statements of operations for these expenses are gross where the Company records revenue and a corresponding reimbursable expense. Expenses paid directly by a tenant are not reimbursable and therefore are not reflected in the statements of operations. The expense and reimbursable amounts may differ due to timing, since the revenue is recorded on a cash basis. The revenues associated with the reimbursable expenses were classified in "Fees and Reimbursables" in the accompanying consolidated statements of operations. For the three months ended June 30, 2025 and 2024, the reimbursable revenues were $179.6 thousand and $18.4 thousand, respectively. For the six months ended June 30, 2025, and 2024 the reimbursable revenues were $623.1 thousand and $318.2 thousand, respectively. Reimbursable expenses are classified as "Reimbursable Property Expenses" in the accompanying consolidated statements of operations.

The Company's tenants operate in the cannabis industry. All of the Company's leases generally contain annual increases in rent (typically between 2% and 3%) over the expiring rental rate at the time of expiration. Certain leases of the Company also contain an improvement allowance, which is generally available to be funded between 12 and 18 months. In some leases, the tenant becomes liable to pay rent as if all the improvement allowance has been funded, even if there are still unfunded commitments. Improvement allowances also contain annual increases which generally increase at the same rate as base rent, per the lease agreement.

Certain of the Company's leases provide the lessee with a right of first refusal or right of first offer in the event the Company markets the leased property for sale. As of June 30, 2025, the Company hadtwo leases that granted the lessee an option to purchase the leased property at its fair market value at the end of the initial lease term in December 2029, subject to the satisfaction of certain conditions. As of June 30, 2025, the Company's gross investment in thesetwo properties was approximately $6.3 million.

Lease Income

The following table presents the future contractual minimum rent under the Company’s operating leases as of June 30, 2025 (in thousands):

(1) The table does not include contractual rent from Revolutionary Clinics. Although the Company has preserved all its rights under the lease agreement, the tenant is currently in receivership, and a court-appointed receiver is overseeing the process of liquidation. The Company has entered into a stipulation agreement with the receiver. For more information about this tenant, refer to the section below titled "Condition of Our Tenants".

Credit Risk and Geographic Concentration

The ability of any of the Company’s tenants to honor the terms of its lease are dependent upon the economic, regulatory, competitive, natural and social factors affecting the community in which that tenant operates. As of June 30, 2025 and December 31, 2024, the Company owned 34 and 32 properties, respectively, leased to 13 tenants, across 12 states including Arizona, Arkansas, California, Connecticut, Florida, Illinois, Massachusetts, Missouri, Nevada, North Dakota, Ohio, and Pennsylvania.

The following table presents the tenants in the Company's portfolio that represented the largest percentage of the Company's total rental income and fees, excluding revenue reimbursables, for each of the periods presented:

The following table presents the states in the Company’s portfolio that represented the largest percentage of the Company’s total rental income and fees, excluding revenue reimbursable, for each of the periods presented:

(2) Include income from the acquisition ofone property through an exchange on June 12, 2025.

(3) Include income from the disposition ofone property through an exchange on June 12, 2025.

(2) Include income from the acquisition ofone property through an exchange on June 12, 2025.

(3) Include income from the disposition ofone property through an exchange on June 12, 2025.

Condition of Our Tenants

Revolutionary Clinics, Inc.

Revolutionary Clinics, Inc. ("Revolutionary Clinics") faced operational challenges that impaired their ability to meet contractual rent obligations. Beginning in June 2024, they remitted approximately 50% of rent due. On December 13, 2024, Revolutionary Clinics entered into receivership. In the first quarter of 2025, the Company entered into a stipulation agreement with the court appointed receiver to receive 50% of contractual rent on a weekly basis, along with weekly reimbursements for certain delinquent real estate taxes and utilities previously paid by the Company. For the three and six months ended June 30, 2025, the Company received the rent and expense payments in accordance with the stipulation agreement. During the period, the court-appointed receiver continued to oversee the liquidation of the tenant’s business operations.

As Lessee

Commencing on June 1, 2022, the Company entered into afour-year lease agreement to rent its office space, subject to annual escalations, which includes the option to extend the lease for a single three year period. The annual rent payments range from approximately $72.0 thousand in year one to approximately $85.0 thousand in year four. This one office lease qualifies under the right-of-use ("ROU") model. Upon entering into the lease in June 2022, the Company recorded a ROU asset of $273 thousand which is classified in “Other Assets” and a lease liability, which is classified in "Other Liabilities" in the accompanying consolidated balance sheets. The ROU balance as of June 30, 2025 and December 31, 2024, were approximately $76.1 thousand and $110.0 thousand, respectively. The ROU asset is amortized over the remaining lease term. The amortization is made up of the principal amortization under the lease liability plus or minus the straight-line adjustment of the operating lease rent.

The following table presents the future contractual rent obligations as lessee as of June 30, 2025 (in thousands):

(1) The lease is scheduled to expire on August 31, 2026. The lease allows forone renewal option of 3 years commencing immediately upon the expiration of the initial term.

As of June 30, 2025, the weighted-average discount rate used to calculate the lease liability was 5.65% and the remaining lease term was 1.17 years.

Note 5 –Loan Receivable, net

Loan Receivable

The Company funded a $5.0 million unsecured loan to C3 Industries on June 10, 2022. The loan initially bore interest at a rate of 10.25% and is structured to increase annually in April by the product of 1.0225 times the interest rate in effect immediately prior to the anniversary date. The loan is interest only for the first four years and can be prepaid at any time without penalty. If full principal payment on the loan is not made on June 30, 2026, the loan will begin amortizing principal and interest over the next five years, with a final maturity of June 30, 2031. The loan is cross defaulted with their lease agreement with the Company. As of June 30, 2025 and December 31, 2024, the loan earned interest at a rate of 10.96% and 10.72%, respectively, and the aggregate principal amount outstanding on the unsecured loan receivable as of June 30, 2025 and December 31, 2024, was $5.0 million.

CECL Reserve

The Company recorded a provision for current expected credit loss on the $5.0 million unsecured loan (discussed above). Estimating the CECL allowance for credit loss requires significant judgement. The Company used a discounted cash flow analysis to determine the expected credit loss.

The following table presents the CECL reserve for the six months ended June 30, 2025 (in thousands):

(1) Included in "Loan Receivable, net" on the accompanying consolidated balance sheets.

Note 6 –Financings

Revolving Credit Facility

On May 6, 2022, the Operating Partnership entered into a loan and security agreement (the “Loan and Security Agreement”) with a commercial federally regulated bank, as a lender and as agent for lenders that become party thereto from time to time. The Loan and Security Agreement matures on May 6, 2027. The Loan and Security Agreement provides, subject to the accordion feature described below, $30.0 million in aggregate commitments for secured revolving loans (“Revolving Credit Facility”), the availability of which is based on a borrowing base consisting of fee simple owned real properties that satisfy eligibility criteria specified in the Loan and Security Agreement and the lease income thereunder which are owned by certain subsidiaries of the Operating Partnership.

On July 29, 2022, the Operating Partnership, entered into an amendment to the Revolving Credit Facility, amending the Loan and Security Agreement, to increase the aggregate commitment under the Revolving Credit Facility from $30.0 million to $90.0 million and addedtwo additional lenders. The Loan and Security Agreement also allows the Company, subject to certain conditions, to request additional revolving incremental loan commitments such that the Revolving Credit Facility may be increased to a total aggregate principal amount of up to $100.0 million. Borrowings under the Revolving Credit Facility may be voluntarily prepaid and re-borrowed, subject to certain fees.

The Revolving Credit Facility accrued interest at a fixed rate of 5.65% through May 5, 2025. Commencing May 6, 2025, the Revolving Credit Facility bears interest at a variable rate based upon the greater of (a) the Prime Rate quoted in the Wall Street Journal (Western Edition) plus an applicable margin of 1.0% or (b)4.75%. As of June 30, 2025, the interest rate was at 8.50%.

As of June 30, 2025 and December 31, 2024, the Company had $7.6 million outstanding under the Revolving Credit Facility. As of June 30, 2025, there was $82.4 million in funds available to be drawn, subject to sufficient collateral in the borrowing base.

The facility is subject to certain financial covenants, which include liquidity and debt service coverage ratios. The facility also includes customary representations and warranties, affirmative and negative covenants, and events of default. As of June 30, 2025, the Company was in compliance with the financial covenants under the Loan and Security Agreement.

Note 7 -Related Party Transactions

Investor Rights Agreement

Pursuant to our Investor Rights Agreement (the "Investor Rights Agreement"), HG Vora Capital Management, LLC (“HG Vora”), West Investment Holdings, LLC, West CRT Heavy, LLC, Gary and Mary West Charitable Trust, Gary and Mary West 2012 Gift Trust and WFI Co-Investments, acting unanimously, collectively referred to as the “West Stockholders" and NL Ventures LLC ("Pangea") hold certain nomination rights with respect to members of our board of directors so long as they individually own in the aggregate certain percentages of the Company’s issued and outstanding common stock for 60 days consecutively.

Note 8 -Noncontrolling Interests

Overview

Noncontrolling interests represent the limited partnership interest ("LPI Units") in the Operating Partnership not held by the Company. Net income allocated to noncontrolling interest is based on LPI Unitholders' ownership percentage in the Operating Partnership. As of June 30, 2025 and December 31, 2024, noncontrolling interests

Note 8 - Noncontrolling Interests (continued)

represented approximately 357,442 and 372,640 LPI Units, respectively, or 1.7% and 1.8%, respectively, ownership interest in the Operating Partnership.

Allocation of Net Income

Net income allocated to the Operating Partnership noncontrolling interest for the three months ended June 30, 2025 and 2024 was $126 thousand and $122 thousand, respectively. Net income allocated to the Operating Partnership noncontrolling interest for the six months ended June 30, 2025 and 2024 was $234 thousand and $247 thousand, respectively.

Redemption and Conversion Activity

During the three months ended June 30, 2025 and 2024, no LPI Units were redeemed for cash by the Company andno LPI Units were converted to common stock. During the six months ended June 30, 2025,15,198 LPI Units were redeemed for cash by the Company for approximately $253 thousand. During the six months ended June 30, 2024, no LPI Units were redeemed for cash. During the six months ended June 30, 2025 and 2024, no LPI Units were converted to common stock.

Note 9 -Stock Based Compensation

The Company's board of directors adopted our 2021 Equity Incentive Plan (the “Plan”), to provide employees of the Company and its subsidiaries, certain consultants and advisors who perform services for the Company or its subsidiaries, and non-employee members of the board of directors of the Company with the opportunity to receive grants of incentive stock options, nonqualified stock options, stock appreciation rights, stock awards, stock units, other stock-based awards, and cash awards to enable the Company to motivate, attract and retain the services of directors, officers and employees considered essential to the long term success of the Company.

Under the Plan, the total number of shares of awards will be no more than 2,275,727 shares of common stock. If and to the extent shares of awards granted under the Plan, expire or are canceled, forfeited, exchanged or surrendered without having been exercised, or if any stock awards, stock units or other stock-based awards are forfeited, terminated or otherwise not paid in full, the shares subject to such grants shall again be available for issuance or transfer under the Plan. The Plan has a term often years until August 12, 2031.

Additionally, the Plan provides for the issuance of unrestricted common stock to directors who elect to receive their compensation in common stock rather than cash. During the three months ended June 30, 2025 and 2024,701 and 0 shares of common stock were issued related to director compensation, respectively. During the six months ended June 30, 2025 and 2024,1,450 and 0 shares of common stock were issued related to director compensation, respectively. As of June 30, 2025, there were approximately 1,751,152 shares available for issuance under the Plan, which assumes maximum performance is achieved with respect to Performance Stock Units (“PSUs”) .

Restricted Stock Units

Restricted Stock Units ("RSUs") are granted to certain directors, officers and employees of the Company. Per the terms of the agreements, director RSUs that vest cannot be converted until the director separates from the Company. During the six months ended June 30, 2025,13,146 vested director RSUs were converted to common stock in connection with the separation of one board member. The total aggregate outstanding RSUs as of June 30, 2025 and 2024 were 145,266 and 139,499, respectively.

Unvested Restricted Stock Units

The following table sets forth the Company's unvested RSU activity for the six months ended June 30,:

(1) Vested shares are reported gross and include 8,588 shares withheld to satisfy tax and other compensation related withholdings associated with the vested RSUs issued under the Plan.

(2) Vested shares are reported gross and include 2,846 shares withheld to satisfy tax and other compensation related withholdings associated with the vested RSUs issued under the Plan.

Vested Restricted Stock Units

The following table sets forth the Company's vested RSU activity for the six months ended June 30,:

(1) Represents the gross number of RSUs vested and includes 8,588 shares withheld to satisfy tax and other compensation related withholdings associated with the vested RSUs issued under the Plan.

(2) Represents the gross number of RSUs vested and includes 2,846 shares withheld to satisfy tax and other compensation related withholdings associated with the vested RSUs issued under the Plan.

(3) Represents shares withheld to satisfy tax and other compensation related withholdings associated with the vested RSUs issued under the Plan.

Each RSU represents the right to receiveone share of common stock upon vesting. The vested RSUs are also entitled to receive an accumulated dividend payment equal to the dividend paid on each share of common stock during the vesting period. During the six months ended June 30, 2025 and 2024, the Company paid approximately $81.9 thousand and approximately $83.0 thousand, respectively, of accumulated dividends that became earned upon vesting of RSUs. As of June 30, 2025 and 2024, unearned dividends on unvested RSUs, which are only payable upon vesting, totaled approximately $91.8 thousand and $95.2 thousand, respectively.

The amortization of compensation costs associated with the RSU awards are included in "Compensation Expense" in the accompanying consolidated statements of operations and amounted to approximately $0.2 million, excluding forfeitures, for both the three months ended June 30, 2025 and 2024. The amortization of compensation costs for the RSU awards amounted to approximately $0.4 million, excluding forfeitures, for both the six months ended June 30, 2025 and 2024, respectively. The remaining unrecognized compensation cost of approximately $0.9 million for RSU awards is expected to be recognized over a weighted average amortization period of 1.3 years as of June 30, 2025.

Performance Stock Units

PSUs are granted to officers of the Company. Total outstanding PSUs as of June 30, 2025 and 2024 were 113,490 and 159,522, respectively.

The following table sets forth the Company's unvested PSU activity for the six months ended June 30,:

(1) The Company met certain performance hurdles, as defined in the PSU agreements, for thetwo-year performance period ended December 31, 2024, resulting in a partial issuance of the PSU awards. Represents the gross number of PSUs issued and includes 13,493 shares withheld to satisfy tax and other compensation related withholdings associated with the PSUs issued under the Plan.

The vesting of PSU awards is contingent upon meeting performance hurdles based on relative total shareholder return, as measured against a peer group of companies, and the absolute compounded annual growth in stock price at the end of each performance period. The actual number of PSUs earned will range from 0% to 200% depending on the performance levels achieved. PSUs are subject to restrictions on transfer and may be subject to a risk of forfeiture if the award recipient ceases to be an employee of the Company prior to vesting of the award.

The fair value of PSUs is determined using a Monte Carlo simulation for our future stock price and the future stock price of a corresponding peer group. The grant date fair value is an equally weighted value comprised of (i) total shareholder return of the Company and a peer group of companies (“rTSR”); and (ii) the Company’s absolute compound annual growth rate (“CAGR”). To derive the value of rTSR, the Company uses a stochastic stock price simulation model using Geometric Brownian Motion (“GBM”) to model the future stock prices of the Company and the peer group companies. The key inputs to the GBM model include the standard deviation of the movement of the share price, also expressed as stock price volatility. Historical volatility is analyzed for the Company and peer group companies based on publicly traded shares of common stock. The model also assists in deriving a value of the Company’s CAGR which is then subjected to the vesting percentages according to the terms of the PSU agreements. The key inputs to calculate CAGR are the ending stock price, initial stock price and vesting period. The GBM simulates the ending stock price that is used in the CAGR model to determine the grant date fair value.

Using the above methodology, the following table outlines the grant date fair values and performance periods of the Company's outstanding PSU awards as of June 30, 2025:

If the performance hurdles are met, each PSU issued represents the right to receiveone share of common stock. Upon issuance, each PSU is also entitled to receive an accumulated dividend payment equal to the dividend paid on each share of common stock during the performance period. If PSUs do not meet the performance hurdles and are canceled, no dividends are paid on the canceled units. During the six months ended June 30, 2025, the Company paid approximately $213.6 thousand in accrued dividends on the 42,548 PSUs that were issued. No accrued dividends were paid for the six months ended June 30, 2024, as the performance hurdles were not met, and the PSUs were canceled. Unearned dividends on unvested PSUs as of June 30, 2025 and 2024, were approximately $283.5 thousand and $379.7 thousand, respectively.

The amortization of compensation costs associated with the PSU awards are included in "Compensation Expense" in the accompanying consolidated statements of operations and amounted to approximately $0.1 million and $0.2 million, excluding forfeitures, for the three months ended June 30, 2025 and 2024, respectively. The amortization of compensation costs for the PSU awards amounted to approximately $0.3 million and $0.4 million, excluding forfeitures, for the six months ended June 30, 2025 and 2024, respectively. The remaining unrecognized compensation cost of approximately $0.9 million for PSU awards is expected to be recognized over a weighted average amortization period of 1.9 years as of June 30, 2025.

Stock Options

Prior to the completion of the initial public offering ("IPO"), the Company issued 791,790 nonqualified stock options (the “Options”) to purchase shares of the Company’s common stock, subject to the terms and conditions of the applicable option grant agreements, with an exercise price per share of common stock equal to $24.00 and in such amounts as set forth in the option grant agreements. The Options vested on August 31, 2020. As of June 30, 2025 and 2024, the Options were fully exercisable and expire on July 15, 2027.

Note 10 -Warrants

Warrants Issued

On March 17, 2021, the Company entered into a warrant agreement which granted the holder the right to purchase 602,392 shares of common stock of the Company at a purchase price of $24.00 per share. Warrants were immediately exercisable and expire on July 15, 2027. As of June 30, 2025 and 2024,602,392 warrants were fully exercisable.

Note 11 -Stockholders' Equity

Preferred Stock

As of June 30, 2025 and December 31, 2024, the Company had 100,000,000 shares of preferred stock authorized and 0 shares of preferred stock outstanding.

Note 11 - Stockholders' Equity (continued)

Common Stock

As of June 30, 2025 and December 31, 2024, the Company had 400,000,000 shares of common stock authorized and 20,552,632 and 20,514,583 shares, respectively, of common stock issued and outstanding. Common stock is issued at a par value of $0.01 per share.

Stock Repurchase Program

On November 7, 2022, the board of directors of the Company authorized a stock repurchase program of its common stock up to $10.0 million through December 31, 2023. Purchases made pursuant to the stock repurchase program will be made in the open market, in privately negotiated transactions, or pursuant to any trading plan that may be adopted in accordance with Rule 10b-18 of the Securities and Exchange Act of 1934, as amended. The authorization of the stock repurchase program does not obligate the Company to acquire any particular amount of common stock. The timing, manner, price and amount of any repurchases will be determined by the Company in its discretion and will be subject to economic and market conditions, stock price, applicable legal requirements and other factors. On September 15, 2023, the board of directors of the Company authorized an amendment to the stock repurchase program for the repurchase of up to an additional $10.0 million of outstanding common stock and extended the stock repurchase program through December 31, 2024. On November 19, 2024, our board of directors authorized an amendment to the stock repurchase program extending the duration of our existing share repurchase plan to conclude on December 31, 2026. The stock repurchase program may be suspended or discontinued by us at any time and without prior notice.

The Company didnot acquire any shares of common stock pursuant to the stock repurchase plan during the three or six months ended June 30, 2025 and 2024. The remaining availability under the stock repurchase program as of June 30, 2025, was approximately $8.2 million.

At the Market Equity Program

On June 10, 2024, the Company entered into an Equity Distribution Agreement ("EDA"), relating to shares of its common stock, $0.01 par value per share, pursuant to an “At The Market” ("ATM") offering program. On November 19, 2024, the Company entered into another Equity Distribution Agreement (collectively the "EDAs") related to its ATM program to add an additional sales agent. In accordance with the terms of the EDAs, the Company may offer and sell shares of its common stock having an aggregate offering amount of up to $50.0 million from time to time through a sales agent.

Sales of the shares of the Company's common stock, if any, may be made in negotiated transactions or by means of ordinary brokers’ transactions on the OTCQX at market prices prevailing at the time of sale, at prices related to such prevailing market prices or at negotiated prices or through a market maker other than on an exchange, directly on or through any other existing trading market or by any other method permitted by law, including but not limited to in privately negotiated transactions and in block trades.

Total compensation payable to the sales agent for its services acting as an agent, principal and/or advisor, as applicable, will not exceed 2.0% of the gross sales price per share for any shares of common stock sold from time

Note 11 - Stockholders' Equity (continued)

to time under the EDAs. Under the terms of the EDAs, the Company may also sell its common stock to the sales agent as principal for its own account at a price agreed upon at the time of sale.

The following tables describe the cash dividends declared on the Company's common stock and vested RSUs and in the Company's capacity as general partner of the operating partnership, authorized distributions on our LPI Units declared by the Company during the six months ended June 30, 2025 and 2024:

Note 12 -Earnings Per Share

The following table presents the computation of basic and diluted earnings per share (in thousands, except share and per share data):

Note 12 - Earnings Per Share (continued)

During the three and six months ended June 30, 2025, the Company included the effect of LPI Units and unvested RSUs in the calculation of weighted average shares of common stock outstanding - diluted. However, the effect of 791,790 and 602,392 outstanding stock options and warrants, respectively, were excluded in the Company's calculation of weighted average shares of common stock outstanding – diluted, as their inclusion would have been anti-dilutive. The effect of 113,490 outstanding PSUs were not included in the calculation of diluted earnings per share because it was uncertain whether the market condition for the PSUs would have been met as of June 30, 2025.

During the three and six months ended June 30, 2024, the Company included the effect of LPI Units and unvested RSUs in the calculation of weighted average shares of common stock outstanding - diluted. However, the effect of 791,790 and 602,392 outstanding stock options and warrants, respectively, were excluded in the Company's calculation of weighted average shares of common stock outstanding – diluted, as their inclusion would have been anti-dilutive. The effect of 159,522 outstanding PSUs were not included in the calculation of diluted earnings per share because it was uncertain whether the market condition for the PSUs would have been met as of June 30, 2024.

Note 13 –Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. Accounting guidance also establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standards describe three levels of inputs that may be used to measure fair value:

Level 1 – Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 – Includes other inputs that are directly or indirectly observable in the marketplace.

Level 3 – Unobservable inputs that are supported by little or no market activities, therefore requiring an entity to develop its own assumptions.

The following table presents the carrying value and estimated fair value of financial instruments at June 30, 2025 and December 31, 2024 (in thousands):

(1) The fair value measurement of the $5.0 million Loan Receivable is based on unobservable inputs, and as such, is classified as Level 3. The carrying value as of June 30, 2025 and December 31, 2024, reflects the provision for current expected credit loss of $92.8 thousand and $115.9 thousand, respectively.

(2) The fair value of the Company's Revolving Credit Facility is based on observable inputs, and as such, is classified as Level 2.

As of June 30, 2025 and December 31, 2024, the carrying amounts of financial instruments such as cash and cash equivalents, other assets, accounts payable and accrued expenses and other liabilities approximate their fair values due to the generally short-term nature and the market rates of interest of these instruments. As such, these financial instruments are classified as Level 1.

Note 14 -Income Taxes

As a REIT, the Company is not subject to federal income tax to the extent that it makes qualifying distributions to its stockholders, and provided it satisfies on a continuing basis, through actual investment and operating results, the REIT requirements including certain asset, income, distribution, and stock ownership tests. The state and local tax jurisdictions for which the Company is subject to tax-filing obligations recognize the Company’s status as a REIT, and therefore, the Company generally does not pay income tax in such jurisdictions. The Company may, however, be subject to certain minimum state and local tax filing fees as well as certain excise, franchise, or business taxes.

Taxable REIT Subsidiaries

The Company may conduct some of its operations through a domestic subsidiary that is treated as a Taxable REIT Subsidiary ("TRS"). The TRS is subject to U.S. federal, state and local corporate income taxes at the current federal statutory rate of 21%. The Company’s effective tax rate differs from its combined U.S. federal, state and local corporate statutory tax rate primarily due to income earned at the REIT, which is not subject to tax, due to the deduction for qualifying distributions made by the Company. For the six months ended June 30, 2025 and 2024, the TRS had limited activity and did not generate taxable income.

Note 15 -Commitments and Contingencies

As of June 30, 2025, the Company had aggregate unfunded commitments to invest approximately $12.1 million to develop and improve our existing cultivation facility in Connecticut and our existing dispensaries in Ohio. Refer to Note 3 - "Real Estate" for further details on the Company's commitments.

As of June 30, 2025, the Company is the lessee underone office lease. Refer to Note 4 - "Leases" for further information.

The Company owns a portfolio of properties that it leases to entities which cultivate, harvest, process and distribute cannabis. Cannabis is an illegal substance under the Controlled Substances Act. Although the operations of the Company’s tenants are legalized in the states and local jurisdictions in which they operate, the Company and its tenants are subject to certain risks and uncertainties associated with conducting operations subject to conflicting federal, state and local laws in an industry with a complex regulatory environment, which is continuously evolving. These risks and uncertainties include the risk that the strict enforcement of federal laws regarding cannabis would likely result in the Company’s inability, and the inability of its tenants, to execute their respective business plans.

The Company may from time to time, be a party to legal proceedings, which arise in the ordinary course of our business. Though the results of any such proceedings, claims, inquiries, and investigations may not be predicted with certainty, the Company does not believe that the final outcome of any such current matters are reasonably likely to have a material adverse effect on our business, financial condition, or results of operations.

Note 16 -Segments

The Company specializes in long-term, single-tenant, triple-net sale leaseback and build-to-suit projects located in the United States within the regulated cannabis industry. The Company’s properties are aggregated intoone reportable segment due to their similarities: they are leased to state-licensed operators on a long-term triple-net basis, and consist of improvements that are reusable and share similar economic characteristics. The Chief Operating Decision Maker ("CODM") is the Company’s President and Chief Executive Officer. The CODM regularly reviews consolidated financial information and performance used to make decisions about the Company as a whole and without distinguishing or grouping of operations based on asset type, revenue, geographic location, tenant or other factors. Accordingly, for disclosure purposes, the Company has a single reportable segment, which

Note 16 - Segments (continued)

is reported on the Company’s consolidated financial statements, which includes all significant segment expenses and assets.

The CODM evaluates performance and allocates resources based on revenue, income from operations and net income as reported in the consolidated statements of operations. The Company’s revenues are primarily derived from the long-term, triple-net leases that the Company executes with tenants. These revenues are derived from operating leases which are classified in “Rental Income” and “Fees and Reimbursables” on our consolidated statements of operations. Since these leases are triple-net, property-level expenses are generally either the responsibility of the tenant or reimbursed to the Company. As such, the CODM does not regularly assess property-specific revenue or expense metrics in the evaluation of performance.

Total expenditures for long-lived assets are reported on the consolidated statements of cash flows. The CODM does not regularly review measures of assets to evaluate performance. The CODM reviews consolidated net income to evaluate income generated from assets (return on assets) in deciding whether to reinvest profits to grow the property portfolio or deploy income into other aspects of the Company, such as to repay debt, buy back common stock under the share repurchase program or pay dividends.

Note 17 -Subsequent Events

On July 30, 2025, AYR Wellness Inc. (“AYR”), which operates attwo of the Company’s owned properties, announced that it had entered into a restructuring support agreement with its senior noteholders. Under the proposed plan, certain AYR assets and operations will be acquired by the senior noteholders, while the remaining assets and operations are expected to be sold or wound down. AYR properties represented approximately 5.9% of the Company’s rental revenue for the six months ended June 30, 2025. AYR has paid its rent payments through July 2025; however, as of August 6, 2025, the Company has not received rent payments for August. Based on currently available information, the Company does not expect the operations associated with thetwo leased properties to be included in the transaction with AYR’s senior noteholders. The Company holds security deposits equal to approximately 3.5 months of rent for each of thetwo properties. The Company intends to enforce all its rights under the lease agreements.