NewLake Capital Partners, Inc.

NewLake Capital Partners, Inc. ("the Company," "we," "our," "us,") makes statements in this Quarterly Report on Form 10-Q (“Form 10-Q”) that are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In particular, statements pertaining to our capital resources, property performance, leasing rental rates, future dividends and results of operations contain forward-looking statements. Likewise, all of our statements regarding anticipated growth in our funds from operations, adjusted funds from operations, anticipated market conditions, demographics, and results of operations are forward-looking statements. You can identify forward-looking statements by the use of forward-looking terminology such as “believe,” “continue,” "remain," “could,” “expect,” “may,” “will,” “should,” “would,” “seek,” “approximately,” “intend,” “plan,” “pro forma,” “estimates,” “forecast,” “project,” or “anticipate” or the negative of these words and phrases or similar words or phrases which are predictions of or indicate future events or trends and which do not relate solely to historical matters. You can also identify forward-looking statements by discussions of strategy, plans or intentions.

•actions and initiatives of the U.S. or state governments and changes to government policies and the execution and impact of these actions, initiatives and policies, including the fact that cannabis remains illegal under federal law;

•reduced liquidity of our common stock resulting from limited availability of clearing firms that will settle our securities and settle our securities in secondary offerings;

•general economic conditions including changes in the financial condition of our tenants resulting from uncertainties or changes in fiscal, monetary and regulatory policies;

•increase in interest rates and operating costs;

•the impact of inflation;

•financial market fluctuations;

•the competitive environment in which we operate;

•the estimated growth in and evolving market dynamics of the regulated cannabis market;

•adverse economic effects on the cannabis market;

•the expected medical-use or adult-use cannabis legalization in certain states;

•shifts in public opinion regarding regulated cannabis;

•the additional risks that may be associated with certain of our tenants cultivating adult-use cannabis in our cultivation facilities;

•the risks associated with the development of cultivation centers and dispensaries;

•our ability to successfully identify opportunities in target markets;

•the lack of tenant security deposits will impact our ability to recover rents should our tenants default under their respective lease agreement;

•our status as an emerging growth company and a smaller reporting company;

•our lack of an extensive operating history;

•the concentration of our tenants in certain geographical areas;

•our failure to generate sufficient cash flows to service any outstanding indebtedness;

•rates of defaults on, early terminations of, or non-renewal of leases by tenants, including significant tenants;

•our failure to acquire the properties in our identified pipeline successfully, on the anticipated timeline or at the anticipated costs;

•our failure to properly assess employment growth or other trends in target markets and other markets in which we seek to invest;

•lack or insufficient amounts of insurance;

•bankruptcy or insolvency of a significant tenant or a substantial number of smaller tenants;

•our access to certain financial resources, including banks and other financial institutions;

•successfully integrate and manage acquired properties;

•our ability to operate successfully as a public company;

•our dependence on key personnel and ability to identify, hire and retain qualified personnel in the future;

•conflicts of interests with our officers and/or directors stemming from their fiduciary duties to other entities, including our operating partnership;

•our failure to obtain necessary outside financing on favorable terms or at all;

•general volatility of the market price of our common stock;

•changes in accounting principles generally accepted in the United States of America (“GAAP”), including new accounting standards or interpretations;

•our failure to maintain our qualification as a REIT for federal income tax purposes; and

•changes in governmental regulations or interpretations thereof, such as real estate and zoning laws and increases in real property tax rates and taxation of REITs.

While forward-looking statements reflect our good faith beliefs, they are not guarantees of future performance. We disclaim any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, new information, data or methods, future events or other circumstances after the date of this report, except as required by applicable law. You should not place undue reliance on forward-looking statements that are based on information currently available to us or to third parties making such forward-looking statements.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q as well as our audited consolidated financial statements and related notes and the discussion under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations" for the fiscal year ended

December 31, 2025 included in our most recent Annual Report on Form 10-K and our subsequent Quarterly Reports on Form 10-Q.

This discussion, particularly information with regarding our future results of operations or financial condition, business strategy and plans, and management's objectives for future operations, includes forward-looking statements that involve risks and uncertainties as described under the heading "Special Note Regarding Forward-Looking Information" in this Quarterly Report on Form 10-Q. You should review the disclosure under the heading "Risk Factors" in our most recent Annual Report on Form 10-K for a discussion of important factors that could cause our actual results to differ materially from those anticipated in these forward-looking statements.

Overview

NewLake Capital Partners, Inc., ("the “Company,” "we," "our," "us,") is an internally managed REIT and a leading provider of real estate capital to state-licensed cannabis operators primarily through sale-leaseback transactions, third-party purchases and funding for build-to-suit projects. Our properties are leased to single tenants on a long-term, triple-net basis, which obligates the tenant for the ongoing expenses of the leased property, in addition to its rent obligations.

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.

As of March 31, 2026, we owned 34 properties across 12 states, consisting of 19 dispensaries and 15 cultivation facilities which included 31 properties leased to state-licensed operators and 3 properties which were vacant.

Emerging Growth Company

We have elected to be an emerging growth company, as defined in the JOBS Act. An emerging growth company may take advantage of specified reduced reporting requirements and is relieved of certain other significant requirements that are otherwise generally applicable to public companies. As an emerging growth company, among other things:

•We are exempt from the requirement to obtain an attestation and report from our auditors on the assessment of our internal control over financial reporting pursuant to the Sarbanes-Oxley Act;

•We are permitted to provide less extensive disclosure about our executive compensation arrangements; and

•We are not required to give our stockholders non-binding advisory votes on executive compensation or golden parachute arrangements.

We have elected to use an extended transition period for complying with new or revised accounting standards.

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.

We will cease to qualify as an emerging growth company on December 31, 2026. While we will no longer be eligible for certain accommodations available to emerging growth companies, we currently qualify as a smaller reporting company and a non‑accelerated filer and, as such, are not subject to the auditor attestation requirements of Section 404(b) of the Sarbanes‑Oxley Act or the requirement to hold advisory votes on executive compensation.

Factors Impacting Our Operating Results

Our results of operations are affected by a number of factors and depend on the rental revenue we receive from the properties that we own, interest income we receive from the loans we originate, the timing of lease expirations, general market conditions, the regulatory environment in the cannabis industry, and the competitive environment for real estate assets that support the cannabis industry.

Rental Income

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:

Tenant performance and rent collection. Collections primarily relate to tenants' and guarantors' financial condition and ability to make rent payments on time.

Industry and regulatory conditions. Our tenants operate in the cannabis industry. Changes in state or local laws, or in their interpretation or enforcement, may adversely affect our tenants' ability to fulfill lease obligations, which could adversely affect our ability to maintain or increase rental rates.

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.

Ability to re‑lease vacant properties and manage tenant issues. Our operating results may also be affected by our ability to re‑lease vacant properties in a timely manner and to manage and resolve tenant‑related issues, including rent defaults, lease restructurings or other credit challenges.

For the three months ended March 31, 2026, 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, affiliate or other guaranty. During the three months ended March 31, 2026, we had rental agreements with 12 tenants and three properties remained vacant, which we are actively working to re-lease.

Financial Performance and Condition of Our Tenants

Condition of Our Tenants

The Cannabist Company

On March 24, 2026, The Cannabist Company ("Cannabist"), which operates at four of our properties, including two properties located in Illinois and two properties located in Massachusetts, publicly announced that it has entered into definitive agreements to sell certain assets and has commenced restructuring proceedings under the Cannabist's Creditors Arrangement Act in Canada, with the intention to seek recognition of such proceedings in the United States under Chapter 15 of the U.S. Bankruptcy Code. As disclosed by The Cannabist, they entered into a non-binding memorandum of understanding for the sale of certain of its production, manufacturing, distribution and sale operations (through the sale of equity or assets) in six states, including Illinois and Massachusetts, where we lease properties to The Cannabist. We continue to monitor developments related to this tenant and its restructuring proceedings.

During the three months ended March 31, 2026, we collected full rent for each of the 4 properties leased to Cannabist and the tenant remains current on its contractual lease obligations to us. We hold aggregate security deposits totaling approximately $481.6 thousand across these 4 properties.

Lease Modifications

San Diego, CA

On January 28, 2026, we entered into a First Amendment to the Lease Agreement (the “Amendment”) for our dispensary property located in San Diego, California. Pursuant to the Amendment, we consented to a change in control of the tenant, pursuant to which Wellgreens acquired the tenant entity formerly operated by Cannabist. In connection with the Amendment, the lease term was extended by five years, through December 31, 2034, and the three renewal options and annual contractual rent escalators. In addition, the existing purchase option under the lease remained with the tenant. All other material terms of the lease remain unchanged.

Sinking Springs, PA

As a result of a third‑party transaction involving Acreage Holdings, Inc.’s Pennsylvania cultivation operations (Prime Wellness) during March 2026, we added Holistic Industries as an additional guarantor under the lease for our Sinking Springs, Pennsylvania property. As part of this same transaction, we also added Canopy USA as an additional guarantor under the lease with Acreage Holdings’ Massachusetts subsidiary, The Botanist, for our Sterling, Massachusetts cultivation facility.

Other than the addition of these guarantors, there were no modifications to the economic or non‑economic terms of either lease, and the Company did not provide capital, financing, or other consideration in connection with these arrangements.

Re-leasing Activity

As of March 31, 2026, three of our cultivation facilities, located in Pottsville, PA, Sparks, NV, and Fitchburg, MA, remained vacant following tenant departures in 2025. During the three months ended March 31, 2026, we continued to actively market these properties for lease. There was no rental income recognized for these properties during the three months ended March 31, 2026.

Financial Markets Update

U.S. monetary policy remains restrictive relative to historical norms, and interest rates continue to be elevated compared to prior years, providing only limited relief to borrowers. Capital availability remains constrained, particularly for emerging and specialized sectors such as cannabis. Many operators across the industry continue to experience margin pressure, elevated leverage, and limited access to traditional financing sources as significant amounts of debt mature during 2026 and 2027, creating heightened refinancing risk. Industry‑wide credit stress has led to several notable restructurings and insolvency proceedings across the sector, including at the parent‑company level of certain private and public multi‑state operators.

Broader macroeconomic uncertainty persists, including sensitivity to inflation trends, mixed signals regarding economic growth, and cautious investor sentiment. These conditions have contributed to a more conservative approach to capital deployment across equity and credit markets, with increased emphasis on liquidity, balance‑sheet strength, and risk management.

As a REIT focused on leasing properties to cannabis tenants, we continue to closely monitor these evolving market dynamics. Disciplined underwriting, proactive tenant engagement, and active portfolio management remain central to our strategy as we operate in an environment characterized by elevated borrowing costs, selective capital availability, and sector‑specific regulatory and credit risks. We believe the ongoing financial pressures within the cannabis industry, including refinancing challenges associated with upcoming debt maturities, underscore the importance of prudent tenant evaluation and thoughtful portfolio construction.

Regulatory Environment - Industry Impacts

As of March 31, 2026, the federal rescheduling process remained subject to further administrative action. During this period, capital‑markets conditions for state‑regulated cannabis operators were mixed. Several large publicly traded multi‑state operators (“MSOs”) completed refinancing or maturity extensions during 2025 and early 2026, including transactions extending maturities to 2029 and 2030, indicating selective access to credit despite elevated borrowing costs. At the same time, industry reporting highlighted continued credit stress among certain operators and a concentration of maturities through 2026 and 2027 that has pressured portions of the sector. We continue to monitor tenant credit conditions and capital‑market dynamics for potential effects on our tenants and rent collections.

In April 2026, the U.S. Department of Justice (“DOJ”) issued an order rescheduling medical cannabis sold under a state-legal medical Marijuana program from a Schedule I to Schedule III of the Controlled Substances Act (“CSA”). The order reflects federal recognition of acceptable medical use and lower abuse potential for these products. While this action does not constitute federal legalization of cannabis and does not apply to recreational marijuana, it reduces regulatory restrictions and eliminates the application of Internal Revenue Code Section 280E for qualifying state‑licensed medical marijuana businesses. In addition, the Drug Enforcement Administration (“DEA”) initiated an expedited administrative process to consider broader rescheduling of cannabis, with an administrative hearing scheduled to begin on June 29, 2026.

We believe these regulatory developments represent a meaningful milestone for the cannabis industry and may improve operating cash flows, credit profiles, and access to capital for certain operators over time. Reduced tax burdens associated with the elimination of Section 280E could enhance liquidity and potentially expand participation by lenders and investors that have historically limited exposure to the cannabis sector.

Inflation and Supply Chain Constraints

The Consumer Price Index ("CPI") rose by approximately 3.3% for the twelve months ended March 31, 2026. While inflation remains well below the peaks experienced during 2022, recent data indicates renewed upward pressure, particularly related to energy costs. It remains above the Federal Reserve’s long-term 2% target, contributing to higher costs across labor, materials, and services.

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 stabilized, cannabis operators continue to experience delays in accessing specialized equipment required for cultivation and processing facilities.

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.

Competitive Environment

We face competition from a diverse mix of market participants, including but not limited to, other companies with similar business models, independent investors, hedge funds and other real estate investors, mortgage REITs, hard money lenders, as well as would-be tenants and cannabis operators themselves, all of whom may compete with us in our efforts to acquire real estate zoned for cannabis cultivation, production or dispensary operations. Competition from others may diminish our opportunities to acquire a desired property on favorable terms or at all. In addition, this competition may put pressure on us to reduce the rental rates below those that we expect to charge for the properties that we own and expect to acquire, which would adversely affect our financial results.

Critical Accounting Estimates

In accordance with GAAP, our consolidated financial statements require the use of estimates and assumptions that involve the exercise of judgment and use of assumptions. Our most critical accounting estimates will involve decisions and assessments that could affect our reported assets and liabilities, as well as our reported revenues and expenses. Actual results could differ materially from those estimates and assumptions.

We believe that all of the decisions and assessments upon which our consolidated financial statements have been based were reasonable at the time made and based upon information available to us at that time. There have been no changes to our critical accounting estimates included in Management’s Discussion and Analysis of Financial Condition and Results of Operations section of our Annual Report on Form 10-K for the year ended December 31, 2025.

First Quarter 2026 Highlights

Capital Market Activity

On March 4, 2026, our Board of Directors declared a first quarter 2026 cash dividend of $0.43 per share of common stock, equivalent to an annualized dividend of $1.72 per share of common stock. The dividend was paid on April 15, 2026, to stockholders of record at the close of business on March 31, 2026.