Trio of cannabis pubcos in default to Innovative Industrial over lease payments

March 31, 2025

A trio of high-profile publicly traded marijuana businesses are all in default to their lender over lease payments for a collective nine cannabis processing facilities, California-based landlord Innovative Industrial Properties (NYSE: IIPR) revealed on Monday. IIPR also announced that it’s searching for new tenants to replace those who haven’t been paying their bills.

Arizona-based 4Front Ventures Corp. (CSE: FFNT) (OTCQB: FFNTF) is in default over leases for four properties, California-based Gold Flora Corp. (Cboe Canada: GRAM) (OTCQB: GRAM) is in default for three properties, and Arizona-based Tilt Holdings (Cboe CA: TILT) (OTCQB: TLLTF) is in default for two properties, according to a press release from Innovative Industrial.

A fourth company – Medical Investor Holdings LLC – is also in default to Innovative Industrial for a $16.1 million loan that it took out from Innovative in order to support four of the properties in question. Medical Investor Holdings also missed mandatory payments of $800,000 in interest on the loan, and so Innovative Industrial called the entire loan due immediately.

As of March 28, 4Front’s unpaid bills to Innovative Industrial totaled $9 million, while Gold Flora owed $1.7 million and Tilt owed $2.4 million. Innovative Industrial warned that all three may be evicted from its facilities for the nonpayment of rent.

The three new defaults are just the latest with which Innovative Industrial has had to contend. Earlier this month, the company announced in a regulatory filing that PharmaCann had defaulted on nine properties after failing to pay $2.7 million in rent. PharmaCann is also facing possible eviction, Innovative Industrial said, despite that company having previously been put on a payment plan by the landlord.

The number of financially distressed marijuana businesses has begun hitting the real estate landlord business harder over the past year, which has also affected Innovative Industrial’s stock price. The company’s stock has plummeted from roughly $132 per share in November to about $53 per share at the end of March.

After the PharmaCann turmoil, Innovative Industrial specifically warned clients that it wouldn’t tolerate such delays going forward.

The string of defaults convinced Innovative Industrial that it needs to take action, and so it announced a new “tenant replacement and renewal initiative,” with the aim of “strengthening tenant credit profiles and optimizing occupancy of the company’s properties.” Innovative Industrial laid out in the release that the U.S. cannabis sector as a whole faces major headwinds and hinted at looking for tenants in more mainstream industries that don’t face the difficulties inherent in the marijuana trade.

“The company believes that it will be better served by proactively seeking to refresh a substantial portion of its tenant base with more financially viable long-term tenants,” Innovative Industrial said in the release, without providing specifics on what exactly it intends to change.