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 changes to the federal and state regulation of cannabis and the continuing uncertainty regarding the treatment of cannabis under federal law;

•reduced liquidity of our common stock resulting from the limited availability of clearing firms, broker-dealers, investment banks and other financial institutions willing to support trading in our securities or participate in secondary offerings involving our securities;

•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 agreements;

•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 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 September 30, 2026, we owned 35 properties across 13 states, consisting of 20 dispensaries and 15 cultivation facilities which included 32 properties leased to state-licensed operators and 3 properties which were available for lease.

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.

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.

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 federal, 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 available properties and manage tenant issues: Our operating results may also be affected by our ability to re‑lease available 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 and nine months ended September 30, 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. As of September 30, 2026, we had 32 leased properties across 12 tenants and three properties available for lease, 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 leased four of our properties, commenced restructuring proceedings under the Companies Creditors Arrangement Act ("CCAA") in Canada. We continue to monitor developments related to this tenant and its restructuring proceedings.

In September 2026, we entered into agreements providing for the termination of Cannabist's lease at our Aurora, Illinois cultivation facility and the commencement of a new lease with the acquirer of Cannabist's cultivation operations at this site, each effective upon closing of the related transaction, which remained pending as of September 30, 2026. In connection with these agreements, Cannabist forfeited its security deposit of approximately $100.0 thousand, which the Company recognized as rental income during the three months ended September 30, 2026.

At our other three properties leased to Cannabist, we collected all contractual rent due through September 30, 2026. We hold aggregate security deposits totaling approximately $381.5 thousand related to these properties.

PharmaCann

In August 2026, we consented to a change in control of PharmaCann Penn LLC, the tenant at our Shamokin, Pennsylvania dispensary property, whereby an affiliate of Cresco Labs Inc. acquired the tenant. In connection with the transaction, Cresco Labs Inc. became a guarantor under the existing lease. The terms of the lease otherwise remained unchanged.

Available Properties

As of September 30, 2026, three of our cultivation facilities, located in Pottsville, Pennsylvania; Sparks, Nevada; and Fitchburg, Massachusetts, were available for lease following tenant departures in 2025. We continue to actively market these properties for lease.

Financial Markets Update

U.S. monetary policy remains restrictive relative to historical norms, and borrowing costs remain elevated. Capital availability remains selective, particularly for emerging and specialized sectors such as cannabis. While certain operators have successfully refinanced or extended debt maturities, many continue to experience margin pressure, elevated leverage and limited access to traditional financing sources. Significant debt maturities remain outstanding across the industry through 2027 and 2028, contributing to ongoing refinancing risk. Industry-wide credit stress has contributed 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 inflationary pressures, uncertainty regarding the future path of interest rates and cautious investor sentiment. These conditions have contributed to a disciplined 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 in light of selective capital availability and sector-specific regulatory and credit risks. We believe the ongoing financial pressures affecting portions of 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 September 30, 2026, the federal regulatory environment for cannabis continued to evolve. In April 2026, the U.S. Department of Justice ("DOJ") issued an order rescheduling medical cannabis sold under qualifying state-licensed medical marijuana programs from Schedule I to Schedule III of the Controlled Substances Act ("CSA"). The order permits qualifying state-licensed medical marijuana operators that obtain and maintain the required DEA registrations to operate under a federal Schedule III framework and eliminates the application of Internal Revenue Code Section 280E. As a result, medical cannabis operators will benefit from reduced federal tax burdens, improved operating cash flows and enhanced access to capital.

Legal challenges have been filed in the U.S. Court of Appeals for the D.C. Circuit challenging the April 2026 DOJ order and related DEA actions. These challenges include claims that the order exceeds DOJ's statutory authority, was procedurally deficient, and did not comply with applicable administrative requirements under the Administrative Procedure Act, the Controlled Substances Act and treaty-related obligations. Certain petitioners have sought to have the April 2026 order vacated, and, based on the information available as of the date of this filing, these legal challenges remain unresolved. If successful, these challenges could result in changes to, or the reversal of, the current federal classification framework applicable to qualifying state-licensed medical cannabis businesses.

The April 2026 order does not apply to adult-use cannabis, which remains Schedule I. Separately, the DEA restarted the administrative process to consider broader rescheduling of cannabis. The DEA administrative hearing regarding broader cannabis rescheduling commenced on June 29, 2026 and concluded on July 15, 2026. As of the date of this filing, no final determination has been issued in the broader rescheduling proceeding.

Inflation and Supply Chain Constraints

The Consumer Price Index ("CPI") rose by approximately 3.7% for the twelve months ended September 30, 2026. Inflation 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 energy costs, 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.

Investment Activity

In August 2026, we acquired one parcel of land in Kentucky for $550 thousand and committed to fund approximately $1.6 million for the construction of a dispensary. This property was simultaneously leased to a related entity of an existing tenant.

Third Quarter 2026 Highlights

Capital Market Activity

In August 2026, we entered into an amendment to our Revolving Credit Facility, amending the Loan and Security Agreement. The amendment (i) maintained the aggregate commitment under the Revolving Credit Facility at $90.0 million, subject to lender approval for borrowings in excess of $30.0 million; (ii) extended the maturity date by two years from May 6, 2027 to May 6, 2029; (iii) modified the interest rate provisions such that borrowings bear interest at a variable rate equal to the greater of (a) the Prime Rate quoted in The Wall Street Journal (Western Edition) or (b) 6.25%; and (iv) revised the unused line fee provisions such that a 0.25% per annum fee applies only if average daily revolver usage is less than 35% of approved availability for the applicable period.

During the three months ended September 30, 2026, we repaid the outstanding principal amount of $7.6 million on our Revolving Credit Facility. As of September 30, 2026, there were no outstanding borrowings under the Revolving Credit Facility.

On September 14, 2026, our Board of Directors declared a third 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 October 15, 2026, to stockholders of record at the close of business on September 30, 2026.

Recent Developments

On November 3, 2026, our Board of Directors authorized an extension of the expiration date of the stock repurchase program to December 31, 2028. Approximately $8.2 million remains available for future repurchases under the program.