Power REIT (NYSE: PW) has acquired a 37,000 square foot greenhouse cannabis cultivation facility in California. The acquisition was conducted as part of its latest transaction, which saw the company purchase the property for $7.7 million, with the property then being leased to Canndescent.
Canndescent reportedly owns the best selling flower brand within the luxury cannabis category in California. The arrangement will see the company charge annual rent of just under $1.2 million, providing the company with a reported cash flow of over 26% on the transaction.
The purchase transaction is being funded through the use of $2.7 million in cash on hand, as well as the issuance of 192,308 shares of preferred stock, based on a closing price of $26.00 per share. It is not believed that any additional funds were provided for improvements to the property under the arrangement.
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The property was reportedly acquired below current market rates in the region, including at a discount to replacement cost. Additional opportunities are reportedly being explored by the two parties as well.
Power REIT last traded at $37.77 on the NYSE.
Information for this briefing was found via Sedar and Power REIT. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
