Marijuana Business Magazine

ANC¬LLARY BUS¬NESS STRATEG¬ES I nnovative Industrial Properties made history last December when it became the first marijuana- focused company to trade on the world’s largest equities market: the New York Stock Exchange. It was no small feat. The San Diego-based real estate investment trust (REIT) – which acquires industrial properties and leases the facilities to licensed medical marijuana cultivators under long-term contracts – discovered that the process of completing an initial public offering Eyeing an ¬PO The CEO of a marijuana company that made it to the NYSE shares insights on how to prepare for an initial public offering by Joseph Peña requires months of preparation and paperwork, top talent and money. "We explored several potential financing paths but settled on raising capital in an initial public offering and becoming a public company,” said Paul Smithers, CEO of Inno- vative Industrial Properties. “As a public company, we feel we can be more nimble in capital raising and more effectively fund the acquisition opportunities we are seeing, in addi- tion to the credibility and cache that accompanies a listing on the NYSE.” 140 • Marijuana Business Magazine • November / December 2017 EXECUTIVE SUMMARY Innovative Industrial Properties, a cannabis-focused real estate investment trust that trades on the New York Stock Exchange, has several pieces of advice for those interested in taking their ancillary company public on a major exchange: • "It requires a tremendous amount of preparation, an experienced management team and strong outside advisers, including lawyers, accountants and underwriters,” said Paul Smithers, the company's chief executive • The experience of your management team and underwriters is one of the key issues an exchange weighs when deciding on a listing. • You must be prepared to answer questions about your ancillary company’s ties to the cannabis industry. • Prepare for a successful road show where you meet with potential investors. • Have a large deal lined up before you conduct your road show as a way to reassure potential investors. An artist’s rendering of Maryland’s Holistic Industries’ 72,000-square-foot, medical-use cannabis facility. In May, Innovative Industrial Properties announced it planned to invest $15 million in the property. Photo courtesy of Innovative Industrial Properties