Marijuana Business Magazine February 2020

Marijuana Business Magazine | February 2020 78 Perhaps a bigger question is whether a company is better off holding the real estate and banking on it appreciating in the coming years. “If you had a crystal ball, and you knew where your real estate was heading, you might hold on to it for another year or two so you don’t leave chips on the table,” Caltabiano said. “But you have to play the hand you are dealt.” GETTING OUT OF REAL ESTATE One reason for a company to sell its facility is to reinvest the money in the core cannabis business. The return can often surpass any future appreciation of the facility being sold. “Groups can generate higher returns by unlocking the stranded capital they have in their real estate and reinvesting that into their core operations,” Smithers said. “These companies are cannabis operators first and foremost, and that is the area (where) many prefer to focus their time and money. We find many of the sophisticated operators in the industry understand this.” The bottom line is that the companies want to be in the cannabis industry, not the real estate space. “If you are in business A, B, C or D, you want to focus on the business you know and believe in and not in your real estate. Ultimately, your returns will be much greater by taking the cash from your real estate and investing it back into your core business,” Allen of Tower Commercial said. Joe Caltabiano Courtesy Photo Seller Buyer Location of Property/ Properties Amount of Deal Cresco Labs, Illinois GreenAcreage Real Estate (REIT), New York Illinois $50 million Columbia Care, New York New Lake Capital Partners, Maryland Six properties in California, Illinois and Massachusetts $35 million Green Thumb Industries, Illinois Innovative Industrial Properties, California Pennsylvania $39.6 million Acreage Holdings, New York GreenAcreage Florida, Massachusetts and Pennsylvania $72 million Curaleaf Holdings, Massachusetts Freehold Properties (REIT), Nevada Florida, Massachusetts and New Jersey $28.3 million Cash Back Some sale-leaseback deals announced during the second half of 2019 include: Ca $ h Cow John Rebchook is the web editor at Marijuana Business Daily. You can reach him at johnr@ mjbizdaily.com.