NewLake Capital Partners, Inc.
For the period ended Dec 31, 2025. Filed Mar 6, 2026.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Mar 6, 2026
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What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-03-06.
0001854964-25-000004
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-03-06.
0001854964-26-000006
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 155 previous paragraphs and 159 current paragraphs.
81 unchanged; 32 reworded; 45 added; 41 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 5 previous and 5 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (45)
Current report
As of December 31, 2025, we owned 34 properties across 12 states, consisting of 19 dispensaries and 15 cultivation facilities. The 34 properties included 31 properties leased to 11 state-licensed operators and 3 properties which were vacant.
Current report
Additionally, our results are impacted by the financial condition of our tenants. While our portfolio is anchored by several large multi-state operators, the broader cannabis sector is navigating an environment with significant upcoming debt maturities. This industry-wide liquidity stress may impact the financial flexibility of certain of our tenants, potentially affecting their ability to meet lease obligations and leading to payment defaults or the necessity for lease restructurings. Refer to Item 1A. Risk Factors for risks associated with our tenants.
Current report
•Tenant operating history. Certain tenants have limited operating histories and may be more susceptible to payment or other lease defaults. Accordingly, our operating results may be influenced by the financial performance and creditworthiness of our tenants.
Current report
For the year ended December 31, 2025, all rental income was derived from triple‑net leases. Under these leases, tenants are generally responsible for real estate taxes, insurance, maintenance and utilities, and most leases include a parent or affiliate guaranty. During 2025, we had rental agreements with 13 tenants. Two tenants defaulted on their lease agreements, which resulted in three properties being vacated prior to year‑end. At December 31, 2025, we had 11 tenants. We are actively pursuing re‑lease of the three properties vacated by two tenants in default.
Current report
Tenant Defaults
Current report
Pottsville, PA and Sparks, NV Cultivation Facilities
Current report
On July 30, 2025, AYR Wellness, Inc. (“AYR”), which operated at two of our properties located in Pottsville, PA and Sparks, NV, announced that it had entered into a restructuring support agreement with its senior noteholders. Under the restructuring support agreement, certain AYR assets and operations will be acquired by the senior noteholders, while the remaining assets and operations, including those at our leased properties, are to be sold or wound down.
Current report
The cultivation properties leased to AYR accounted for approximately 5.3% of our rental income for the year ended December 31, 2025. AYR satisfied its rent obligations through July 2025; however, beginning in August 2025 through the end of the year, no rent was received for our Pottsville, PA and Sparks, NV cultivation properties, which AYR vacated during the third quarter of 2025. We applied AYR’s security deposits totaling approximately $913.5 thousand toward unpaid rent for the Pottsville and Sparks properties during the third and fourth quarters of 2025. As of December 31, 2025, the security deposits had been fully applied across both properties. We are actively working to re‑lease the properties.
Current report
Fitchburg, MA Cultivation Facility
Current report
Revolutionary Clinics, Inc. (“Revolutionary Clinics”) which leased the Company’s Fitchburg, MA cultivation property, experienced operational challenges that impaired its ability to meet contractual rent obligations. Beginning in June 2024 through December 2024, Revolutionary Clinics remitted approximately 50% of rent due. On December 13, 2024, Revolutionary Clinic entered into receivership. In the first quarter of 2025, we entered into a stipulation agreement with the court-appointed receiver to receive 50% of contractual monthly rent on a weekly basis, along with weekly reimbursements for certain delinquent real estate taxes and utilities previously paid by us until the property was vacated and operations ceased. In July 2025, Revolutionary Clinics vacated the property, and rental payments ceased. We have engaged a broker and are actively working to re-lease property.
Current report
Lease Modification
Current report
In October 2025, we amended our lease agreements with C3 Industries (“C3”). Under the amended Hartford, CT lease, we agreed to pursue a sale of the Hartford, CT property. In connection with that agreement, C3 is required to reimburse us for any shortfall if sale proceeds are less than our investment basis. Conversely, if sale proceeds exceed our basis, a portion of the excess will be paid to C3 as reimbursement for its investment in the property. C3 will continue to pay monthly base rent through the sale date. Upon completion of the sale, a portion of the rent previously allocated to the Hartford, CT property will be reallocated to the Missouri lease to compensate us for a portion of the income no longer received from Hartford, CT property. C3 will continue to pay incremental rent under the Missouri lease until we invest in new properties with C3 pursuant to our right‑of‑first‑refusal agreement.
Current report
During the year ended December 31, 2025, financial markets continued to experience volatility amid persistent macroeconomic uncertainty. Early-year optimism around potential monetary easing gave way to renewed concerns over inflation, trade policy instability, and geopolitical tensions. Equity indices delivered mixed performance, and credit markets remained contained.
Current report
Following a cumulative 100 basis point reduction in interest rates during the second half of 2024, recessionary concerns intensified during 2025, driven by declining consumer confidence, persistent inflationary pressures, and unpredictable trade and tariff developments. These headwinds prompted businesses and investors to adopt more conservative financial strategies, with increased emphasis on liquidity and risk management. In response to signs of labor market softening, moderating inflation, and tightening credit conditions, the Federal Reserve implemented a cumulative 75 basis point reduction during the second half of 2025. The prime lending rate remained elevated for most of 2025, which provided limited relief to borrowers. Capital availability remains tight particularly for emerging and specialized sectors such as cannabis. Many operators across the industry continue to face margin compression and debt strain, with billions in loans maturing by 2026 and limited access to refinancing options.
Current report
As a REIT focused on leasing properties to cannabis tenants, we remain vigilant in monitoring these evolving market dynamics. Prudent financial oversight and proactive tenant engagement remain central to our strategy as we navigate an operating environment shaped by elevated interest rates, cautious investor sentiment, and sector-specific risks. We believe broader financial challenges within the cannabis industry including debt strain and refinancing difficulties highlight the importance of disciplined tenant underwriting and portfolio management.
Current report
Regulatory Environment - Industry Impacts
Current report
As discussed in “Item 1 Business”, the federal rescheduling process remained pending at year‑end 2025. Within this environment, capital‑markets conditions for state‑regulated operators were mixed. Several large public MSOs completed significant refinancings or maturity extensions during 2025 and early 2026, including transactions extending maturities to 2029–2030, indicating selective access to credit despite elevated coupons. At the same time, industry coverage highlighted ongoing credit stress among certain operators and a wave of maturities through 2026 that has pressured parts of the sector. We continue to monitor tenant credit conditions and capital‑market dynamics for potential effects on our tenants and rent collections.
Current report
During the year ended December 31, 2025, inflation showed signs of easing but remained elevated, with the Consumer Price Index increasing approximately 2.68% for the year. While this reflects a slight decrease from the 2.89% increase recorded in 2024, inflation continued to exceed the Federal Reserve’s long‑term 2% target, contributing to higher costs across labor, materials and services.
Current report
Inflation has increased operating costs for state‑regulated cannabis operators, including higher wages and rising prices for cultivation inputs such as fertilizers, nutrients and specialized equipment. Development and redevelopment projects have remained capital‑intensive due to elevated material costs and evolving regulatory requirements. Although global supply chains have generally stabilized, operators continue to experience delays in accessing specialized equipment required for cultivation and processing facilities.
Current report
These pressures have been compounded by geopolitical tensions and shifting trade policies, which have contributed to uncertainty in input pricing and the timing of capital projects. As a result, many cannabis businesses continue to experience higher capital requirements and delays in project starts or completions. We continue to monitor inflationary and supply‑chain conditions and their potential effects on our tenants and investment commitments.
Current report
Investments in Real Estate
Current report
During the year ended December 31, 2025, we acquired three dispensaries for approximately $1.7 million and committed to fund approximately $1.1 million in improvements (refer to the 2025 Improvement Allowances table below for details).
Current report
(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.
Current report
During the year ended December 31, 2025, we funded approximately $0.7 million towards our committed improvement allowance at a dispensary in Ohio.
Current report
Disposal of Real Estate
Current report
On June 12, 2025 we 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 we received was leased to an existing tenant under a new operating lease. The Brookville dispensary was recorded at its fair value of $950 thousand and we recognized a de minimis loss on the exchange. For additional details, refer to the acquisition summary in the table above.
Current report
Real Estate Held for Sale
Current report
In November 2025, we entered into an agreement with a broker to market our Hartford, Connecticut property for sale which is leased to C3 Industries (“C3”). The property has a carrying amount of approximately $4.8 million and is available for immediate sale in its present condition. Management has committed to a plan to sell the asset and expects the sale to be completed within one year. Accordingly, the property meets the criteria for held-for-sale classification and is presented as “Real Estate Held for Sale” in the accompanying consolidated balance sheet.
Current report
In accordance with ASC 360, long-lived assets classified as held for sale are measured at the lower of their carrying amount or fair value less costs to sell. In connection with the planned sale, we are entitled to receive make-whole protection under the terms of the tenant’s lease arrangement. If the ultimate sale proceeds are less than our investment basis, the tenant is required to reimburse us for the shortfall. Any such reimbursement, if realized, will be recognized when the sale is completed and the amount becomes determinable. Based on the make-whole protection and management’s current estimate of fair value less costs to sell, we are reporting the property at its carrying amount, and therefore no impairment loss has been recognized.
Current report
•Approximately $0.1 million of rental income from the acquisition of two dispensaries in Ohio that we purchased during the year ended December 31, 2025.
Current report
•Annual rent escalations on our portfolio, which generated an increase of approximately $1.1 million in rental income during the year ended December 31, 2025.
Current report
•Revolutionary Clinics vacated the Fitchburg property in July 2025 after paying only 50% of its contractual rent from June 2024 through the date of vacancy. This resulted in an approximate decline of $1.1 million in rental revenue compared to 2024. Beginning in June 2024, the tenant experienced significant operational challenges that impaired its ability to meet its full rent obligations. These challenges escalated, and in December 2024 the tenant entered receivership, which ultimately led to its departure from the property in 2025. For further information refer to Note 4 - "Leases.”of the accompanying consolidated financial statements.
Current report
•Rental income from our two cultivation facilities leased to AYR declined by approximately $0.3 million compared to 2024. AYR remained current on its rent obligations through July 2025; however, beginning in August 2025 and continuing through year‑end, the Company did not receive rent for the Pottsville, PA or Sparks, NV properties. AYR vacated both properties during the third quarter of 2025. In accordance with the lease terms, the Company applied AYR’s security deposits of approximately $0.9 million, which covered rent for August through October 2025 and partially covered rent for November 2025.
Current report
Reimbursable Property Expenses
Current report
During the year ended December 31, 2025, reimbursable property expenses increased by approximately $0.6 million to approximately $0.8 million, compared to $0.2 million for the year ended December 31, 2024. Reimbursable property expenses is mainly attributable to real estate taxes, insurance and utility payments primarily made on behalf of three tenants. In certain circumstances we will pay for certain expenses on behalf of the tenant with the tenant being obligated to reimburse us. However, timing differences may cause the recognition of expenses and corresponding reimbursement income to vary between periods.
Current report
Property Carrying Costs
Current report
Property carrying costs represent expenses incurred to maintain vacant or partially vacant properties in a condition suitable for re‑leasing. These costs generally include real estate taxes, utilities, property management fees, security, and other operating expenses necessary to keep the properties functional and marketable. The Company did not incur any property carrying costs in 2024, as all properties were fully leased during that period. For the year ended December 31, 2025, the Company incurred approximately $0.4 million in property carrying costs across three properties that were vacated during 2025: (i) our Fitchburg, Massachusetts property, which was vacated by Revolutionary Clinics in July 2025; (ii) our Pottsville, Pennsylvania property, which was vacated by AYR in August 2025; and (iii) our Sparks, Nevada property, which was also vacated by AYR in August 2025.
Current report
Depreciation and amortization expense for the year ended December 31, 2025, increased by approximately $0.8 million to approximately $15.5 million, compared to $14.7 million for the year ended December 31, 2024. The increase in depreciation was primarily attributable to: (i) a full year of depreciation in 2025 on improvements placed into service during 2024 totaling approximately $37.3 million related to four cultivation facilities; (ii) approximately $2.7 million of improvements placed into service during 2025 related to two cultivation facilities and one dispensary; (iii) 2025 acquisitions of two dispensaries, contributing approximately $0.5 million in depreciable assets; and (iv) a full year of depreciation in 2025 on a 2024 acquisition of a cultivation facility, contributing approximately $3.7 million in depreciable assets. These depreciation increases were partially offset by a decrease of approximately $0.2 million in depreciable assets, which became fully depreciated during the year ended December 31, 2025.
Current report
Compensation expense includes salaries for directors, employees and officers, as well as stock-based compensation. For the year ended December 31, 2025, compensation expense decreased by approximately $0.9 million to approximately $3.8 million, compared to approximately $4.7 million for the year ended December 31, 2024. The decrease was primarily driven by an employee resignation, resulting in reduced salary, bonus accruals and stock-based compensation.
Current report
Total professional fees were relatively consistent year over year, decreasing slightly by approximately $0.1 million to $1.4 million for the year ended December 31, 2025, compared to $1.5 million for the prior year. The modest decline reflects ordinary period‑to‑period fluctuations in legal and audit fees.
Showing the first 40 of 45 passages. Open the source sections for the rest.
Removed paragraphs (41)
Previous report
As of December 31, 2024, we owned a geographically diversified portfolio consisting of 32 properties across 12 states with 13 tenants, comprised of 17 dispensaries and 15 cultivation facilities.
Previous report
We generate rental income from our real estate properties that we own. The amount of rental income depends upon a number of factors, including:
Previous report
We own 32 properties, leased to 13 tenants. As of December 31, 2024, all of our tenants are performing under their lease agreement with the exception of two tenants discussed below.
Previous report
During the fourth quarter of 2023, we amended our leases with: a) Revolutionary Clinics, Inc. (“Revolutionary Clinics”), as part of a restructuring of their business, their receipt of new third-party capital and new management; and b) Calypso Enterprises (“Calypso”) in connection with their sale to Canvas Acquisition Corporation. Both tenants experienced operating challenges during the latter half of 2024, impacting their ability to pay rent as described below.
Previous report
Revolutionary Clinics
Previous report
From June 2024 through December 2024, Revolutionary Clinics paid approximately 50% of its contractual rent. On December 13, 2024, Revolutionary Clinics entered into receivership. The Company is currently working with the receiver and the tenant and has reserved all rights under the lease agreement.
Previous report
Calypso Enterprises
Previous report
From September through December 2024, Calypso did not pay the contractual rent due under its lease agreement. We held an escrow deposit equivalent to approximately six months of rent and we applied approximately $1.2 million from the escrow deposit to cover the outstanding rent for this period. Additionally, as of September 2024, in accordance with the lease agreement, we suspended our obligation to fund the remaining improvement allowance of approximately $987 thousand until all outstanding rent is paid and the escrow deposit is replenished. The remaining balance of the escrow deposit as of December 31, 2024, was approximately $446 thousand. We are currently in discussion with the tenant and have reserved all our rights under the lease agreement.
Previous report
During the first half of the year ended December 31, 2024, financial markets generally showed stability, though lingering risks from the prior year remained. In September 2024, the U.S. Federal Reserve cut interest rates by 50 basis points, followed by additional cuts of 25 basis points in November and December, totaling a full percentage point decrease for the second half of the year. This decision reflects the central bank's commitment to balancing its dual mandate of price stability and maximum full employment.
Previous report
Before these rate cuts, the central bank was focused on combating inflation, with interest rates at their highest levels in over twenty years. For U.S. corporations, this high-interest rate environment increased the cost of capital. Despite the rate cuts in the latter part of 2024, interest rates remain relatively high compared to historical standards.
Previous report
However, as of January 2025, the prime lending rate has come down to 7.5%, providing some relief to businesses by lowering the cost of borrowing. This reduction offers some support, but businesses still face challenges due to the overall high-interest rate environment. Access to capital remains somewhat constrained, and financial management strategies are still crucial. Consequently, the availability and cost of capital for our tenants remain high, necessitating the adoption of prudent financial management strategies.
Previous report
Regulatory Update
Previous report
On May 21, 2024, the Justice Department published a Notice of Proposed Rulemaking in the Federal Register for the Drug Enforcement Administration (“DEA”) to reschedule cannabis from Schedule I of the Controlled Substances Act (“CSA”), a list of completely prohibited drugs, to Schedule III, which includes prescription medications such as ketamine, Tylenol with codeine, and anabolic steroids. The proposed rule is based on an August 2023 recommendation by the Department of Health and Human Services (“HHS”). The comment period concluded on July 22, 2024. After reviewing over 43,000 comments to the proposed rule, including numerous requests for a hearing, the DEA Administrator granted a hearing and appointed an Administrative Law Judge (“ALJ”) to preside over the proceedings.
Previous report
The ALJ held a procedural hearing in December 2024 and scheduled oral arguments to commence in January 2025. However, the hearing was delayed by at least 90 days due to a motion filed by parties in the proceedings to remove the DEA from hearings. This motion was granted by DEA Administrative Law Judge John Mulrooney, who cited compelling evidence suggesting that the DEA may have violated certain rules within the Administrative Procedures Act. A new hearing date has not been scheduled and is pending resolution of the request for the DEA’s removal.
Previous report
The rescheduling of cannabis would mark a significant milestone, as we believe this reclassification would lift certain restrictions under IRS Section 280E, which currently prevents cannabis operators from taking certain tax deductions, resulting in onerous effective tax rates on state legal cannabis operators. Additionally, rescheduling should facilitate medical research and provide much-needed medical trials to document the efficacy of cannabis in treating multiple medical conditions.
Previous report
While inflation has begun to subside, it continues to trend higher than in prior years, which may be negatively impacting some of our tenants. Based on the Bureau of Labor Statistics, the annual inflation rate for the United States was 2.9% for the twelve month period ended December 2024. This inflation has impacted costs for labor and production inputs for regulated cannabis operators, in addition to increasing costs of construction for development and redevelopment projects.
Previous report
Ongoing labor shortages with global supply chain issues, and geopolitical issues, also continue to adversely impact costs and timing for the completion of these development and redevelopment projects. These factors may result in cost overruns and delays in commencing operations on certain of our tenants' projects.
Previous report
Investment in Real Estate
Previous report
In May 2024, we purchased a cultivation facility in Connecticut for approximately $4.0 million and committed to fund approximately $12.0 million in improvements.
Previous report
(1) Funded commitments related to the Missouri cultivation facility expansion project.
Previous report
(2) Effective June 6, 2024, the lease agreement was amended to include an additional commitment of approximately $800 thousand which was funded during the year ended December 31, 2024.
Previous report
Financing Activity
Previous report
Loan Payable
Previous report
On January 3, 2024, we made our final annual principal and interest payment of approximately $1.0 million on our loan payable to the seller of a cultivation facility in Chaffee, Missouri.
Previous report
As of December 31, 2024, we had outstanding borrowings of $7.6 million under our Revolving Credit Facility and $82.4 million in funds available to be drawn, subject to sufficient collateral in the borrowing base. For further discussion of our Revolving Credit Facility, refer to Note 6 “Financings” to our consolidated financial statements included in this Form 10-K.
Previous report
At the Market Program
Previous report
On June 10, 2024, we entered into an Equity Distribution Agreement (the "EDA"), relating to shares of our common stock, $0.01 par value per share, pursuant to an “At The Market” (“ATM”) offering program. On November 20, 2024, we entered into another Equity Distribution Agreement (collectively the “EDAs”) related to our ATM program to add an additional sales agent. In accordance with the terms of the EDAs, we may offer and sell shares of our common stock having an aggregate offering amount of up to $50.0 million from time to time through a sales agent.
Previous report
•Generated a full year of rental income in 2024 from the acquisition and development of our Missouri cultivation facility's expansion project, which was acquired in the first quarter of 2023. This resulted in an additional $0.2 million in rental income for the year ended December 31, 2024.
Previous report
•Annual escalations within our portfolio generated an increase of approximately $1.8 million in rental income during the year ended December 31, 2024.
Previous report
•In 2023, Revolutionary Clinics defaulted under their lease agreement, leading us to amend the lease in the fourth quarter as part of their business restructuring, which included receiving new third-party capital and appointing new management. As part of the amendment, we collected a portion of the back rent and received warrants in Revolutionary Clinics. However, in the second half of 2024, the tenant faced new operating challenges that impacted their ability to pay their full contractual rent, resulting in partial rent payments. Consequently, our rental income decreased year over year by $1.1 million due to these rent shortfalls in 2024 and the one-time rental revenue recorded in 2023 from the warrants received in lease restructuring.
Previous report
•A decrease in rental income of approximately $0.2 million related to the sale of a cultivation facility in Massachusetts in October 2023.
Previous report
Property Expenses
Previous report
Property expenses for the year ended December 31, 2024 decreased by approximately $0.4 million to approximately $0.2 million, compared to $0.7 million for the year ended December 31, 2023. The decrease was primarily attributable to the timing of insurance costs incurred in 2023, which were reimbursed to us during 2024.
Previous report
Depreciation and amortization expense for the year ended December 31, 2024, increased by approximately $0.4 million to approximately $14.7 million, compared to $14.3 million for the year ended December 31, 2023. The increase in depreciation was attributable to; (i) the acquisition of one cultivation facility acquired in May 2024 for approximately $4.0 million, which generated an increase of approximately $67 thousand; and (ii) an increase of approximately $0.4 million from approximately $37.3 million of improvements from our Arizona, Missouri and two Pennsylvania cultivation facilities that were placed into service during 2024.
Previous report
Compensation Expense
Previous report
Compensation expense for the year ended December 31, 2024, increased by approximately $0.2 million to approximately $4.7 million, compared to approximately $4.5 million for the year ended December 31, 2023. The increase was primarily due the annual grant of restricted stock units (“RSUs”) and performance stock units (“PSUs”) to certain officers, employees and directors in 2024.
Previous report
Professional fees for the year ended December 31, 2024, increased by approximately $0.1 million to approximately $1.5 million, compared to approximately $1.4 million for the year ended December 31, 2023. The increase was mainly attributable to an increase of approximately $0.2 million of legal fees and approximately $0.1 million related to costs incurred for potential restructuring. These increases were partially offset by a reduction of approximately $0.1 million in audit and tax fees due to timing of these services.
Previous report
On January 1, 2023, we adopted ASC 326, Financial Instruments - Credit Losses. In connection with this adoption, we used a discounted cash flow model to determine an expected credit loss on our loan receivable and recorded a provision for current expected credit loss of $167 thousand during the year ended December 31, 2023. During the year ended December 31, 2024, we recorded a reduction in the provision for current expected credit loss of approximately $51 thousand, which reduced the allowance for credit loss to approximately $116 thousand as of December 31, 2024.
Previous report
Our cash requirements include the payment of dividends to our shareholders, distributions to our OP Units holders (“OP Unitholders”), general and administrative expenses, debt service, other expenses related to managing our existing portfolio, as well as acquisitions and unfunded improvement commitments on our properties. The sources of liquidity to fund these cash requirements include rental income from the leasing of our properties, which is our primary source of cash flow, borrowings under our Revolving Credit Facility and equity and debt issuances, including issuance of common stock under our ATM Program, if markets permit. Where possible, we also may issue OP Units to acquire properties from existing owners seeking a tax-deferred transaction.
Previous report
During the second half of 2024, the Federal Reserve eased its monetary policy by reducing the target range for the federal funds rate by one percentage point. Despite this cut, interest rates have remained relatively stable. As of December 2024, the annual inflation rate in the U.S. is 2.9% for 2024. However, challenges persist due to higher interest rates and inflation, which may adversely impact our cash flow from ongoing operations.
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Reworded paragraphs (32)
Previous wording
We were incorporated in Maryland on April 19, 2019. We conduct our business through a traditional umbrella partnership REIT structure, in which properties are owned by an operating partnership, directly or through subsidiaries. We are the sole general partner of our operating partnership and currently own approximately 98% of the OP Units. We have elected to be taxed as a REIT for U.S. federal income tax purposes beginning with our short taxable year ended December 31, 2019 and intend to operate our business so as to continue to qualify as a REIT.
Current wording
We were incorporated in Maryland on April 9, 2019. We conduct our business through a traditional umbrella partnership REIT structure, in which properties are owned by an operating partnership, directly or through subsidiaries. We are the sole general partner of our operating partnership and currently own approximately 98% of the Limited Partnership Interest (“LPI Units”). We have elected to be taxed as a REIT for U.S. federal income tax purposes beginning with our short taxable year ended December 31, 2019 and intend to operate our business so as to continue to qualify as a REIT.
Previous wording
We may take advantage of the other provisions for up to five years or such earlier time that we are no longer an emerging growth company. We will cease to be an emerging growth company upon the earliest to occur of: (i) the last day of the first fiscal year in which our annual gross revenues exceed $1.2 billion (subject to adjustment for inflation), (ii) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter, (iii) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three-year period or (iv) the last day of the fiscal year following the fifth anniversary of our initial public offering.
Current wording
We may take advantage of the other provisions for up to five years or such earlier time that we are no longer an emerging growth company. We will cease to be an emerging growth company upon the earliest to occur of: (i) the last day of the first fiscal year in which our annual gross revenues exceed $1.2 billion (subject to adjustment for inflation), (ii) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter, (iii) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three-year period or (iv) the last day of the fiscal year ending December 31, 2026, following the fifth anniversary of our initial public offering.
Previous wording
•Our ability to enter into new leases at market value rents inclusive of annual rent increases; and
Current wording
We generate rental income from real estate properties we own and from properties we may acquire in the future. The level and stability of rental income are influenced by a number of factors, including:Leasing activity and terms. Our ability to enter into new leases at market rents, including annual rent increases, and to renew or re‑lease properties at expiration.
Previous wording
•Rent collection, which primarily relates to each of our current and future tenant’s or guarantor’s financial condition and ability to make rent payments to us on time.
Current wording
•Tenant performance and rent collection. Collections primarily relate to tenants’ and guarantors’ financial condition and their ability to make rent payments on time.
Previous wording
For the year ended December 31, 2024, all of our rental income was derived from triple-net leases to 13 tenants. Our leases include a parent or other affiliate guarantee and obligate the tenant for all the ongoing expenses of a property, including real estate taxes, insurance, maintenance and utilities. Our rental income is, therefore, dependent on our tenants (and related guarantors) ability to meet their respective obligations to us. Our tenants operate in the cannabis industry. Changes in current state or local laws in the cannabis industry may impair our ability to renew or re-lease properties and the ability of our tenants to fulfill their lease obligations and could materially and adversely affect our ability to maintain or increase rental rates for our properties. Further, some of our existing tenants have limited operating histories and may be more susceptible to payment and other lease defaults. Thus, our operating results will be significantly impacted by the ability of our tenants to achieve and sustain positive financial results.
Current wording
•Industry and regulatory conditions. Our tenants operate in the cannabis industry. Changes in state or local laws, or in their interpretation or enforcement, may impair our ability to renew or re‑lease properties and tenants’ ability to fulfill lease obligations, which could adversely affect our ability to maintain or increase rental rates.
Previous wording
Lease classification for leases under which we are the lessor are evaluated at lease commencement and leases not classified as sales-type leases or direct financing leases are classified as operating leases. Leases qualify as sales-type leases if the contract includes transfer of ownership clauses, certain purchase options, a lease term representing a major part of the economic life of the asset, or the present value of the lease payments and residual guarantees provided by the lessee exceeds substantially all of the fair value of the asset. Additionally, leasing an asset so specialized that it is not deemed to have any value to us at the end of the lease term may also result in classification as a sales-type lease. Leases qualify as direct financing leases when the present value of the lease payments and residual value guarantees provided by the lessee and unrelated third parties exceeds substantially all of the fair value of the asset and collection of the payments is probable. The determination of lease classification requires the calculation of the rate implicit in the lease or the use of an appropriate capitalization rate which requires significant judgement.
Current wording
Lease classification for leases under which we are the lessor are evaluated at lease commencement and leases not classified as sales-type leases or direct financing leases are classified as operating leases. Leases qualify as sales-type leases if the contract includes transfer of ownership clauses, certain purchase options, a lease term representing a major part of the economic life of the asset, or the present value of the lease payments and residual guarantees provided by the lessee exceeds substantially all of the fair value of the asset. Additionally, leasing an asset so specialized that it is not deemed to have any value to us at the end of the lease term may also result in classification as a sales-type lease. Leases qualify as direct financing leases when the present value of the lease payments and residual value guarantees provided by the lessee and unrelated third parties exceeds substantially all of the fair value of the asset and collection of the payments is probable. The determination of lease classification requires the calculation of the rate implicit in the lease or the use of an appropriate capitalization rate which requires significant judgment.
Previous wording
Operating leases where the minimum lease payments are not reasonably predictable are recognized on a cash basis. The collectability criteria for our operating leases is assessed quarterly on an individual basis, incorporating several financial metrics, which include but are not limited to, free cash flow, profitability, debt profile and federal tax liability. In our assessment, we also consider the impact of federal regulatory uncertainty and state regulatory challenges in the cannabis industry, including the fact that cannabis remains illegal under federal law. These environmental factors are significant in our assessment of collectability of lease payments given the pervasive impacts on our tenants' financial performance and ability to continue as a going concern. Based on this assessment, we determined collectibility of rent for each of our tenants is uncertain and rental income was recorded on a cash basis. We will continue to assess quarterly the collectability of lease payments for each tenant as required by ASC 842.
Current wording
Operating leases where the minimum lease payments are not reasonably predictable are recognized on a cash basis. The collectability criteria for our operating leases is assessed quarterly on an individual basis, incorporating several financial metrics, which include but are not limited to, free cash flow, profitability, debt profile and federal tax liability. In our assessment, we also consider the impact of federal regulatory uncertainty and state regulatory challenges in the cannabis industry, including the fact that cannabis remains illegal under federal law. These environmental factors are significant in our assessment of collectability of lease payments given the pervasive impacts on our tenants' financial performance and ability to continue as a going concern. Based on this assessment, we determined collectability of rent for each of our tenants is uncertain and rental income was recorded on a cash basis. We will continue to assess quarterly the collectability of lease payments for each tenant as required by ASC 842.
Previous wording
We adopted ASC 326, Financial Instruments - Credit Losses ("CECL") on January 1, 2023. The CECL expected loss model requires an allowance for all expected credit losses for the life of a loan be recognized when the loan is either originated or acquired. The allowance for credit losses is a valuation account that is deducted from, or added to, the amortized cost basis of the financial asset(s) to present the net amount expected to be collected on the financial asset(s). At each reporting period, we will update the estimate and adjust the allowance for credit losses accordingly. Increases in the allowance are recorded through net income as credit loss expense. Decreases in the allowance are recorded through net income as a reversal of credit loss expense. This standard does not specify a specific measurement technique for estimating expected credit losses and the approach used to estimate credit losses requires judgement. We generally use a discounted cash flow model approach to determine the credit loss. Determining the appropriate discount rate that reflects the risk inherent in future cash flow requires significant judgement. If the discount rates differ significantly from our estimates, the provision for current credit loss could be materially affected.
Current wording
We adopted ASC 326, Financial Instruments - Credit Losses ("CECL") on January 1, 2023. The CECL expected loss model requires an allowance for all expected credit losses for the life of a loan be recognized when the loan is either originated or acquired. The allowance for credit losses is a valuation account that is deducted from, or added to, the amortized cost basis of the financial asset(s) to present the net amount expected to be collected on the financial asset(s). At each reporting period, we will update the estimate and adjust the allowance for credit losses accordingly. Increases in the allowance are recorded through net income as credit loss expense. Decreases in the allowance are recorded through net income as a reversal of credit loss expense. This standard does not specify a specific measurement technique for estimating expected credit losses and the approach used to estimate credit losses requires judgment. We generally use a discounted cash flow model approach to determine the credit loss. Determining the appropriate discount rate that reflects the risk inherent in future cash flow requires significant judgment. If the discount rates differ significantly from our estimates, the provision for current credit loss could be materially affected.
Previous wording
During the year ended December 31, 2024, the Company’s board of directors declared cash dividends totaling $1.70 per share of common stock.
Current wording
During the year ended December 31, 2025, the Company’s board of directors declared cash dividends totaling $1.72 per share of common stock.
Previous wording
We derive substantially all our revenue from rents received from single tenants at each of our 32 properties, all of which are under triple-net leases. As of December 31, 2024, our portfolio remains conservatively leveraged, with only $7.6 million outstanding under our Revolving Credit Facility. Additionally, we maintain low general and administrative expenses with an annualized ratio of 1.4% of total assets.
Current wording
During the year ended December 31, 2025, we derived substantially all our revenue from rents received from single tenants at each of our 34 properties, all of which are under triple-net leases. As of December 31, 2025, our portfolio remains conservatively leveraged, with only $7.6 million outstanding under our Revolving Credit Facility. Additionally, we maintained low general and administrative expenses with an annual expense ratio of 1.4% of total assets.
Previous wording
Rental income for the year ended December 31, 2024 increased by approximately $2.6 million, to approximately $48.9 million, compared to approximately $46.3 million for the year ended December 31, 2023. The increase in rental income was primarily attributable to:
Current wording
Rental income for the year ended December 31, 2025 increased by approximately $0.6 million, to approximately $49.5 million, compared to approximately $48.9 million for the year ended December 31, 2024. The increase in rental income was primarily attributable to:
Previous wording
•Generated approximately $0.4 million in rental income from the purchase of a cultivation facility in Connecticut in May 2024, reflecting approximately eight months of rental income for the year ended December 31, 2024.
Current wording
•A full year of rental income in 2025 from the purchase of a cultivation facility in Connecticut in May 2024, which generated an increase of approximately $0.2 million of rental income during the year ended December 31, 2025.
Previous wording
•The funding of $15.1 million of improvements at our cultivation facilities in Arizona, Connecticut, Missouri and Pennsylvania generated approximately $1.4 million in rental income during the year ended December 31, 2024.
Current wording
•Funding of improvement allowances at our Arizona, Connecticut, Missouri and Pennsylvania cultivation facilities, which generated approximately $0.6 million of additional rental income during the year ended December 31, 2025.
Previous wording
The increases in rental income during 2024 described above were offset by decreases in rental income primarily attributable to:
Current wording
The increases in rental income during 2025 described above were offset by a decline in rental income primarily attributable to:
Previous wording
Interest income from loans increased slightly due to the annual rate adjustment on our one loan receivable.
Current wording
Interest income from loans increased slightly due to the annual rate adjustment on our one $5.0 million loan receivable.
Previous wording
Fees and reimbursables for the year ended December 31, 2024 increased by approximately $0.2 million, to approximately $0.7 million, compared to approximately $0.4 million for the year ended December 31, 2023. The increase is primarily due to timing of revenue reimbursements year over year.
Current wording
Fees and reimbursables for the year ended December 31, 2025 increased by approximately $0.3 million, to approximately $1.0 million, compared to approximately $0.7 million for the year ended December 31, 2024, due to timing of revenue reimbursements year over year.
Previous wording
Total general and administrative expenses for the year ended December 31, 2024 increased by approximately $0.4 million, to approximately $7.9 million, compared to approximately $7.6 million for the year ended December 31, 2023. The increase in general and administrative expense is described below by category.
Current wording
Total general and administrative expenses for the year ended December 31, 2025 decreased by approximately $0.8 million, to approximately $7.1 million, compared to approximately $7.9 million for the year ended December 31, 2024. The decrease in general and administrative expense is described below by category.
Previous wording
Other general and administrative expenses are primarily comprised of director and officer insurance, information technology fees, public relations fees, filing and regulatory fees, public reporting fees, corporate rent and various other expenses. Other general and administrative expenses were relatively flat year over year.
Current wording
Other general and administrative expenses remained relatively flat year over year. These expenses are primarily comprised of director and officer insurance, information technology fees, public relations fees, filing and regulatory fees, public reporting fees, corporate rent and various other expenses.
Previous wording
During the fourth quarter of 2024, Revolutionary Clinics entered into receivership. Based on our impairment assessments, we determined that the investment in warrants was impaired due to the significant concerns about Revolutionary Clinics' ability to continue as a going concern raised by the receivership (See “Note 10 - Warrants” for further information). As a result, we recorded an impairment loss on warrants of $522 thousand.
Current wording
On December 13, 2024, Revolutionary Clinics entered into receivership. Based on our impairment assessments, we determined that the investment in warrants was impaired due to the significant concerns about Revolutionary Clinics' ability to continue as a going concern raised by the receivership (See “Note 10 - Warrants” for further information). As a result, we recorded an impairment loss on warrants of $522 thousand for the year ended December 31, 2024.
Previous wording
Other income, which is mainly comprised of interest income decreased during the year ended December 31, 2024, by approximately $0.3 million, to $0.4 million, compared to $0.7 million for the year ended December 31, 2023, due to lower cash balances in our money market accounts. We primarily used cash liquidity to pay dividends and fund improvement allowances. Refer to the “Summary of Cash Flows” for further information.
Current wording
Other income, which is primarily comprised of interest income remained relatively flat year over year.
Previous wording
Interest expense for the year ended December 31, 2024, increased by approximately $0.2 million to approximately $0.6 million compared to approximately $0.4 million for the year ended December 31, 2023. The increase was due to a higher outstanding balance on our Revolving Credit Facility.
Current wording
Interest expense for the year ended December 31, 2025, increased by approximately $0.2 million, to approximately $0.8 million compared to approximately $0.6 million for the year ended December 31, 2024. This increase primarily reflects higher borrowing costs under our Revolving Credit Facility which transitioned from a fixed rate of 5.65% to a variable interest rate of Prime plus 1% effective May 6, 2025. The interest rate on the Revolving Credit Facility as of December 31, 2025 was 7.75%.
Previous wording
As of December 31, 2024, we had $102.6 million of liquidity comprised of $20.2 million of cash and cash equivalents and $82.4 million available on our $90.0 million Revolving Credit Facility, subject to sufficient collateral in the borrowing base. Additionally, the ATM Program allows us to raise capital up to $50.0 million. We cannot however, be certain that these sources of funds will be available at a time and upon terms acceptable to us in sufficient amounts in the future.
Current wording
As of December 31, 2025, our liquidity totaled $23.9 million of cash and cash equivalents and $82.4 million available on our Revolving Credit Facility, subject to sufficient collateral in the borrowing base. Additionally, the ATM Program allows us to raise capital up to $50.0 million. While we believe these sources of liquidity are adequate to support our near‑term needs, there can be no assurance that such sources will remain available to us on terms acceptable or in amounts sufficient to meet our future requirements.
Previous wording
Acquisitions and unfunded improvement allowance costs may require funding from borrowings, equity issuance and/or issuance of OP Units.
Current wording
Based on our current projections, we believe that cash flows from continuing operations over the next twelve months, together with existing cash on hand and available borrowing capacity, will be sufficient to fund our operating activities, pay dividends to shareholders, make required distributions to LPI Unitholders, and service our debt obligations. Acquisitions and unfunded improvement allowance costs may require funding from borrowings, equity issuance and/or issuances of LPI Units. We may utilize a combination of these sources depending on market conditions and capital availability.
Previous wording
Net cash provided by operating activities for the years ended December 31, 2024 and 2023 were approximately $43.3 million and approximately $40.1 million, respectively. Net cash flows provided by operating activities primarily related to contractual rent received from our properties, partially offset by our general and administrative expenses.
Current wording
Net cash provided by operating activities for the years ended December 31, 2025 and 2024 were approximately $42.5 million and approximately $43.3 million, respectively. Net cash flows provided by operating activities for the years ended December 31, 2025 and 2024 were primarily related to contractual rent received from our properties, partially offset by our general and administrative expenses and property carrying costs.
Previous wording
Net Cash Used in Investing Activities:
Current wording
Cash Used in Investing Activities:
Previous wording
Net cash used in investing activities for the years ended December 31, 2024 and 2023 were approximately $19.1 million and approximately $12.8 million, respectively. Net cash used in investing activities for the year ended December 31, 2024 related to approximately $4.0 million used to purchase a cultivation facility in Connecticut and approximately $15.1 million used to fund improvements at four cultivation facilities. Net cash used in investing activities for the year ended December 31, 2023 related to approximately $0.4 million used to purchase an adjacent parcel of land by an existing cultivation facility in Missouri and approximately $14.4 million used to fund improvement at four cultivation facilities, partially offset by approximately $1.9 million of proceeds received from the sale of our Palmer, Massachusetts property.
Current wording
Net cash used in investing activities for the years ended December 31, 2025 and 2024 were approximately $1.5 million and approximately $19.1 million, respectively. Net cash used in investing activities for the year ended December 31, 2025 related to approximately $0.8 million used to purchase two dispensaries in Ohio and approximately $0.7 million used to fund improvements at a dispensary in Ohio. Net cash used in investing activities for the year ended December 31, 2024 related to approximately $4.0 million used to purchase a cultivation facility in Connecticut and approximately $15.1 million used to fund improvement at our cultivation facilities in Arizona, Connecticut, Missouri and Pennsylvania.
Previous wording
Net cash used in financing activities for the years ended December 31, 2024 and 2023 was approximately $29.8 million and approximately $46.6 million, respectively. Cash used in financing activities for the year ended December 31, 2024, related to approximately $35.0 million in dividend payments to holders of our common stock, as well as distributions on our OP Units, $1.0 million to pay down our loan payable, approximately $0.3 million of deferred offering costs incurred in connection with our ATM Program and approximately $84 thousand of cash paid for taxes in lieu of issuance of common stock. These cash outflows were offset by a cash inflow of $6.6 million from draws on our Revolving Credit Facility. Net cash used in financing activities for the year ended December 31, 2023, mainly related to approximately $33.7 million in dividend payments to holders of our common stock, as well as distributions on our OP Units, $1.0 million to pay down our loan payable, approximately $11.8 million to buy back stock under the stock repurchase program and approximately $43 thousand of cash paid for taxes in lieu of issuance of common stock.
Current wording
Cash used in financing activities for the years ended December 31, 2025 and 2024 was approximately $37.2 million and approximately $29.8 million, respectively. Cash used in financing activities for the year ended December 31, 2025, related to approximately $35.8 million in dividend payments to holders of our common stock and vested RSUs and PSUs, approximately $0.6 million in distributions on our LPI Units, approximately $0.4 million of cash paid for taxes in lieu of issuance of common stock on vested RSUs and PSUs, approximately $0.3 million paid to redeem 15,198 LPI Units in cash, and approximately $0.3 million to issue PSUs in cash. Net cash used in financing activities for the year ended December 31, 2024, was mainly related to approximately $34.4 million in dividend payments to holders of our common stock and vested RSUs, approximately $0.6 million in distributions on our LPI Units, $1.0 million to pay down our loan payable, approximately $0.3 million of deferred offering costs incurred in connection with our ATM Program and approximately $84 thousand of cash paid for taxes in lieu of issuance of common stock on vested RSUs. These cash flows were offset by $6.6 million drawn on our Revolving Credit Facility.
Previous wording
As a result of this distribution requirement, our Operating Partnership cannot rely on retained earnings to fund its ongoing operations to the same extent that other companies whose parent companies are not REITs can. During the year ended December 31, 2024, we declared and our board of directors approved, cash dividends on our common stock and restricted stock units and in our capacity as general partner of the Operating Partnership, we authorized distributions on our OP Units totaling $1.70 per share.
Current wording
As a result of this distribution requirement, our Operating Partnership cannot rely on retained earnings to fund its ongoing operations to the same extent that other companies whose parent companies are not REITs can. During the year ended December 31, 2025, we declared and our board of directors approved, cash dividends on our common stock and restricted stock units and in our capacity as general partner of the Operating Partnership, we authorized distributions on our LPI Units totaling $1.72 per share.
Previous wording
During the year ended December 31, 2023, we declared and our board of directors approved, cash dividends on our common stock and restricted stock units and in our capacity as general partner of the Operating Partnership, authorized distributions on our OP Units totaling $1.57 per share.
Current wording
During the year ended December 31, 2024, we declared and our board of directors approved, cash dividends on our common stock and restricted stock units and in our capacity as general partner of the Operating Partnership, authorized distributions on our LPI Units totaling $1.70 per share.
Previous wording
As of December 31, 2024, we had aggregate unfunded commitments to invest approximately $11.0 million to develop and improve our existing cultivation facility in Connecticut.
Current wording
As of December 31, 2025, we had aggregate unfunded commitments to invest approximately $0.4 million to develop and improve our dispensary in Ohio.
Previous wording
As of December 31, 2024, we are the lessee under one office lease for a term of four years, subject to annual escalations. The annual rent payments range from approximately $72 thousand in year one to $85 thousand in year four. The office lease has a remaining average lease term of approximately 1.67 years.
Current wording
As of December 31, 2025, we are the lessee under one office lease for an initial term of four years, subject to annual escalations. The lease agreement was amended on November 20, 2025 to extend the initial term for one year, ending August 31, 2027. The annual rent payments range from approximately $72 thousand in year one to $85 thousand in year five. The office lease has a weighted average remaining lease term of approximately 1.67 years.
Previous wording
As of December 31, 2024, the interest rate on our revolving credit facility was 5.65% and we had $7.6 million outstanding under the facility. See Note 6 - Financings for more details.
Current wording
The Revolving credit facility accrued interested at a fixed rate of 5.65% through May 5, 2025. Effective May 6, 2025, the Revolving Credit Facility transitioned to a variable interest rate structure, bearing interest at a variable rate based upon the greater of (a) the Prime Rate quoted in the Wall Street Journal (Western Edition) (“Base Rate”) plus an applicable margin of 1.0% or (b) 4.75%. As of December 31, 2025, the interest rate was 7.75% and we had $7.6 million outstanding under the facility. See Note 6 - “Financings” for more details.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Provision for current expected credit loss remained relatively flat year over year.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
During the year ended December 31, 2024, we funded approximately $15.1 million of improvements to our cultivation facilities in Arizona, Connecticut, Missouri and Pennsylvania.