Innovative Industrial Properties, Inc. (NYSE:IIPR) is under investigation by Pomerantz LLP for potential securities fraud.
PharmaCann, a major tenant, defaulted on December rent for six properties, significantly impacting IIPR’s rental revenues.
The stock price of IIPR experienced a sharp decline of 22.73%, reflecting investor concerns over financial stability and future performance.
Innovative Industrial Properties, Inc. (NYSE:IIPR) is a real estate investment trust (REIT) that focuses on the acquisition, ownership, and management of specialized properties leased to experienced, state-licensed operators for their regulated cannabis facilities. The company has been under scrutiny due to a recent investigation by Pomerantz LLP, which is examining potential securities fraud or other unlawful business practices by the company and its officers.
The investigation was triggered by a significant event involving PharmaCann, a major tenant of IIPR. PharmaCann defaulted on its December rent obligations for six out of eleven properties, which are spread across Illinois, Massachusetts, Michigan, New York, Ohio, and Pennsylvania. This default amounted to $4.2 million, significantly impacting IIPR’s rental revenues, as PharmaCann accounts for 17% of them. Despite PharmaCann paying $90,000 for the remaining five leases, cross-default provisions led to a default on these leases as well.
Following the news of PharmaCann’s default, IIPR’s stock price experienced a sharp decline of 22.73%, closing at $73.66 per share on December 20, 2024. This decline reflects investor concerns about the company’s financial stability and the potential impact of the investigation. As highlighted by Compass Point, the stock was downgraded from “Buy” to “Neutral” on December 24, 2024, when the stock price was $70.35, indicating a cautious outlook on the company’s future performance.
Currently, IIPR’s stock is priced at $68.11, showing a decrease of 3.677% with a change of $2.60. The stock has fluctuated between a low of $67.66 and a high of $70.43 today. Over the past year, IIPR’s stock reached a high of $138.35 and a low of $67.66, reflecting significant volatility. The company’s market capitalization is approximately $1.93 billion, with a trading volume of 579,799 shares, indicating active investor interest amidst the ongoing investigation.
