8-K
INNOVATIVE INDUSTRIAL PROPERTIES INC (IIPR)
UNITED STATES
SECURITIES ANDEXCHANGE COMMISSION
WASHINGTON,D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant toSection 13 or 15(d)
of the SecuritiesExchange Act of 1934
Dateof Report (Date of earliest event reported): February 26, 2025
Innovative IndustrialProperties, Inc.
(Exact nameof registrant as specified in its charter)
| Maryland | 001-37949 | 81-2963381 |
|---|---|---|
| (State or Other Jurisdiction<br><br> <br>of Incorporation) | (Commission<br><br> <br>File No.) | (I.R.S. Employer<br><br> <br>Identification No.) |
1389 CenterDrive, Suite 200
Park City, Utah84098
(Address ofprincipal executive offices, including zip code)
Registrant’s
telephone number, including area code: (858) 997-3332
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| --- | --- |
| ¨ | Pre-commencement communications pursuant<br> to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| --- | --- |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under<br>the Exchange Act (17 CFR 240.13e-4(c)) |
| --- | --- |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Securities Registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on<br><br>which registered |
|---|---|---|
| Common Stock, par value $0.001 per share | IIPR | New York Stock Exchange |
| Series A Preferred Stock, par value $0.001 per share | IIPR-PA | New York Stock Exchange |
Item 8.01Other Events.
On February 21, 2025, Innovative Industrial Properties, Inc., a Maryland corporation (the “Company”), filed a Registration Statement on Form S-3ASR (No. 333-285148) (the “New Registration Statement”) with the Securities and Exchange Commission (the “SEC”) to replace the Company’s prior Registration Statement on Form S-3ASR (No. 333-262320) filed with the SEC on January 24, 2022 (the “Prior Registration Statement”). The Prior Registration Statement terminated on January 24, 2025. Following the filing of the New Registration Statement, the Company filed with the SEC a prospectus supplement, dated February 26, 2025 (the “ATM Prospectus Supplement”), that continues the at-the-market offering of shares of the Company’s common stock and Series A Preferred Stock having an aggregate offering price of up to $500,000,000. The Company refers to its common stock and Series A Preferred Stock, collectively, as the “Shares.” As of the date of this report, shares of the Company’s common stock and Series A Preferred Stock having an aggregate offering price of up to approximately $489.9 million remain available for offer and sale pursuant to the ATM Prospectus Supplement.
In addition, on February 26, 2025, the Company and its operating partnership, IIP Operating Partnership, LP, a Delaware limited partnership, entered into certain amendments (the “Amendments”) to the equity distribution agreements with each of BTIG, LLC, Jefferies LLC, Piper Sandler & Co. and Roth Capital Partners, LLC (or certain of their respective affiliates or agents), acting in their capacity as sales agents or as forward sellers and/or forward purchasers, to, among other things, reflect the filing of the New Registration Statement.
The Shares will be offered pursuant to the New Registration Statement and the ATM Prospectus Supplement. This Current Report on Form 8-K shall not constitute an offer to sell or the solicitation of an offer to buy the Shares nor shall there be any sale of the Shares in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.
The foregoing description of the Amendments does not purport to be complete and is qualified in its entirety by reference to Exhibit 1.1 filed with this Current Report on Form 8-K.
Item 9.01. Financial Statements andExhibits.
| (d) | Exhibits. |
|---|---|
| Exhibit | Description of Exhibit |
| --- | --- |
| 1.1 | Form of Amendment to Equity Distribution Agreement. |
| 5.1 | Opinion of Foley & Lardner LLP regarding legality of the Shares. |
| 8.1 | Opinion of Foley & Lardner LLP regarding certain tax matters. |
| 23.1 | Consent of Foley & Lardner LLP (included in Exhibit 5.1). |
| 23.2 | Consent of Foley & Lardner LLP (included in Exhibit 8.1). |
| 104 | Cover Page Interactive Data File (embedded within the XBRL document). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: February 26, 2025 | INNOVATIVE INDUSTRIAL PROPERTIES, INC. | |
|---|---|---|
| By: | /s/ David Smith | |
| Name: | David Smith | |
| Title: | Chief Financial Officer |
Exhibit 1.1
INNOVATIVE INDUSTRIAL PROPERTIES, INC.
COMMON STOCK
(par value $0.001 per share)
9.00% SERIES A CUMULATIVE REDEEMABLE PREFERREDSTOCK
(par value $0.001 per share)
AMENDMENT NO. 1 TO THE
EQUITY DISTRIBUTION AGREEMENT
February [●], 2025
[●].
[●]
[●]
Ladies and Gentlemen:
Reference is made to the Equity Distribution Agreement, dated May 24, 2024 (the “Agreement”), by and among Innovative Industrial Properties, Inc., a Maryland corporation (the “Company”), IIP Operating Partnership, LP, a Delaware limited partnership (the “Operating Partnership”), [●] in its capacity as agent (“Agent”), and [●], in its capacity as forward purchaser (“ForwardPurchaser”) and in its capacity as Forward Seller (“Forward Seller”). Terms used herein but not otherwise defined are used herein as defined in the Agreement. The parties, intending to be legally bound, hereby amend the Agreement as follows (the “Amendment”):
1. The second paragraph of Section 1 of the Agreement is hereby amended and restated as follows:
“The Company and the Operating Partnership have prepared and filed, in accordance with the provisions of the Securities Act, with the Commission, not earlier than three years prior to the date hereof, an “automatic shelf registration statement” (as defined under Rule 405 under the Securities Act) on Form S-3 (File No. 333-285148), including a base prospectus, with respect to offerings of certain securities of the Company, including the Shares, and which incorporates by reference documents that the Company has filed or will file in accordance with the provisions of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (collectively, the “ExchangeAct”). The Company has prepared a prospectus supplement to the base prospectus included as part of such registration statement at the time it became effective specifically relating to the offering of the Shares pursuant to this Agreement (the “ProspectusSupplement”). The Company will furnish to Agent or the Forward Seller, as applicable, for use by Agent or the Forward Seller, as applicable, copies of the base prospectus included as part of such registration statement at the time it became effective, as supplemented by the Prospectus Supplement. Except where the context otherwise requires, such registration statement, when it became effective upon filing with the Commission, including the information, if any, deemed pursuant to Rule 430B or 430C under the Securities Act, as applicable, to be part of the registration statement at the time of its effectiveness and all documents filed as part thereof or incorporated by reference therein, and including any information contained in the Prospectus (as defined below) subsequently filed with the Commission pursuant to Rule 424(b) under the Securities Act, and any one or more additional effective registration statements on Form S-3 from time to time that will contain a base prospectus and related prospectus or prospectus supplement, if applicable (which shall be a Prospectus Supplement), collectively, are herein called the “Registration Statement,” and the base prospectus included in the registration statement at the time it became effective, including all documents incorporated therein by reference to the extent such information has not been superseded or modified in accordance with Rule 412 under the Securities Act (as qualified by Rule 430B(g) of the Securities Act), as it may be supplemented by the Prospectus Supplement, in the form filed by the Company with the Commission pursuant to Rule 424(b) under the Securities Act, together with any “issuer free writing prospectus”, as defined in Rule 433 under the Securities Act (“Rule433”), relating to the Shares that (i) is required to be filed with the Commission by the Company or (ii) is exempt from filing pursuant to Rule 433(d)(5)(i), in each case, in the form filed or required to be filed with the Commission or, if not required to be filed, in the form retained in the Company’s records pursuant to Rule 433(g), is herein called the “Prospectus.” If the Company has filed an abbreviated registration statement to register additional securities of the Company pursuant to Rule 462(b) under the Securities Act, then any reference to the Registration Statement in this Agreement shall also be deemed to include such abbreviated registration statement filed by the Company pursuant to Rule 462(b) under the Securities Act. Any reference herein to the Registration Statement, the Prospectus or any amendment or supplement thereto shall be deemed to refer to and include the documents incorporated by reference therein, and any reference herein to the terms “amend,” “amendment” or “supplement” with respect to the Registration Statement or the Prospectus shall be deemed to refer to and include the filing after the execution hereof of any document with the Commission deemed to be incorporated by reference therein (such documents incorporated or deemed to be incorporated by reference are herein called the “Incorporated Documents”). For purposes of this Agreement, all references to the Registration Statement, the Prospectus or to any amendment or supplement thereto shall be deemed to include any copy filed with the Commission pursuant to its Electronic Data Gathering Analysis and Retrieval system, or if applicable, the Interactive Data Electronic Applications system when used by the Commission (collectively, “EDGAR”).”
2. The fourth paragraph of Section 14 of the Agreement is hereby amended and restated as follows:
Paul Hastings LLP
71 S. Wacker Dr Suite 4500
Chicago, Illinois 60606
Attention: Kerry E. Johnson, Esq.
Facsimile: (312) 499-6118
3. Applicable Law; Submission to Jurisdiction. THIS AMENDMENT AND ALL THE RIGHTS AND OBLIGATIONS OF THE PARTIES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICTING PROVISION OR RULE (WHETHER OF THE STATE OF NEW YORK, OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF NEW YORK TO BE APPLIED. THE COMPANY, THE OPERATING PARTNERSHIP, THE AGENT, THE FORWARD SELLER AND THE FORWARD PURCHASER HEREBY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE U.S. FEDERAL AND NEW YORK STATE COURTS IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK IN ANY SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. THE COMPANY, THE OPERATING PARTNERSHIP, THE AGENT, THE FORWARD SELLER AND THE FORWARD PURCHASER WAIVE ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH SUIT OR PROCEEDING IN SUCH COURTS. THE COMPANY, THE OPERATING PARTNERSHIP, THE AGENT, THE FORWARD SELLER AND THE FORWARD PURCHASER AGREE THAT FINAL JUDGMENT IN ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH COURT SHALL BE CONCLUSIVE AND BINDING UPON THE COMPANY, THE OPERATING PARTNERSHIP, THE AGENT, THE FORWARD SELLER AND THE FORWARD PURCHASER AND MAY BE ENFORCED IN ANY COURT TO THE JURISDICTION OF WHICH COMPANY, THE OPERATING PARTNERSHIP, THE AGENT, THE FORWARD SELLER AND THE FORWARD PURCHASER ARE SUBJECT BY A SUIT UPON SUCH JUDGMENT.
4. Counterparts. This Amendment may be signed in two or more counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. Counterparts may be delivered via facsimile, electronic mail (including any electronic signature covered by the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions Act, the Electronic Signatures and Records Act or other applicable law, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
5. Agreement Remains in Effect. Except as provided herein, all provisions, terms and conditions of the Agreement shall remain in full force and effect. As amended hereby, the Agreement is ratified and confirmed in all respects.
[Signature Pages Follow]
IN WITNESS WHEREOF, the parties have executed this Amendment to be effective as of the date first written above.
| Innovative Industrial Properties,<br> Inc. |
|---|
| By: |
| Name: David Smith |
| Title: Chief Financial Officer and<br> Treasurer |
| IIP Operating Partnership, LP |
| By: |
| Name: David Smith |
| Title: Chief Financial Officer and<br> Treasurer |
[Signature Page to EquityDistribution Agreement Amendment No. 1.]
| ACCEPTED as of the date first-above<br> written: |
|---|
| [●], as Agent |
| By: |
| Name: [●] |
| Title: [●] |
| [●], as Forward Seller |
| By: |
| Name: [●] |
| Title: [●] |
| [●], as Forward Purchaser |
| By: |
| Name: [●] |
| Title: [●] |
[Signature Page to Equity Distribution Agreement Amendment No. 1]
EXHIBIT 5.1
| ATTORNEYS AT LAW<br><br> <br><br><br> <br>100 N Tampa St, suite 2700<br><br> <br>Tampa, Fl 33602<br><br> <br>813.229.2300 TEL<br><br> <br>813.221.4210 FAX<br><br> <br>www.foley.com |
|---|
February 26, 2025
Innovative Industrial Properties, Inc.
1389 Center Drive, Suite 200
Park City, Utah 84098
Ladies and Gentlemen:
We have acted as counsel to Innovative Industrial Properties, Inc., a Maryland corporation (the “Company”), and IIP Operating Partnership, LP, a Delaware limited partnership (the “Operating Partnership”), in connection with (i) the sale, from time to time, of shares of common stock, par value $0.001 per share, of the Company (“Common Stock”) and shares of 9.00% Series A Cumulative Redeemable Preferred Stock, par value $0.001 per share (“Series A Preferred Stock”), with an aggregate offering price of up to $500,000,000 (the “Shares”) pursuant to the terms of those certain Equity Distribution Agreements, each dated as of May 24, 2024, as amended on February 26, 2025 (collectively, the “Distribution Agreements”), by and among the Company and the Operating Partnership, and each of BTIG, LLC, Jefferies LLC, Piper Sandler & Co., and Roth Capital Partners, LLC, as sales agents for the Company (in such capacity, the “Agents”), and each of Jefferies LLC and Piper Sandler Financial Products II Inc., as forward sellers or forward purchasers (in such capacities, the “Forward Sellers” and the “Forward Purchasers,”, respectively) and (ii) those certain Master Confirmations for Issuer Share Forward Sale Transactions, each dated as of May 24, 2024 (collectively, the “Master Forward Confirmations”), by and among the Company, the Operating Partnership, and each Forward Purchaser. The Shares are included in a registration statement on Form S-3 filed under the Securities Act of 1933, as amended (the “1933 Act”), filed with the Securities and Exchange Commission (the “Commission”) on February 21, 2025 (Registration No. 333-285148) (the “Registration Statement”), and are being offered pursuant to a prospectus dated February 21, 2025 (the “Base Prospectus”) and a prospectus supplement filed with the Commission pursuant to Rule 424(b) under the 1933 Act on February 26, 2025 (the “Prospectus Supplement” and together with the Base Prospectus, the “Prospectus”).
In connection with our representation of the Company, and as a basis for the opinion hereinafter set forth, we have examined originals, or copies certified or otherwise identified to our satisfaction, of the following documents (collectively, the “Documents”):
| A. | 1. The Second Articles of Amendment and Restatement of the Company, as amended on June 3, 2020 (the<br> “Charter”), which include the Articles Supplementary setting forth the authorized shares of Series A Preferred Stock<br>filed with the Department of Assessments and Taxation of the State of Maryland on May 23, 2024 (the “Articles Supplementary”); |
|---|
February 26, 2025
Page 2
2. The Third Amended and Restated Bylaws of the Company, certified as of the date hereof by the Secretary of the Company;
3. Resolutions adopted by the Board of Directors of the Company (the “Board”) or a duly authorized committee thereof relating to the registration, sale and issuance of the Shares, certified as of the date hereof by the Secretary of the Company (the “Resolutions”);
4. The Prospectus and the Registration Statement;
5. A certificate of the State Department of Assessments and Taxation of Maryland as to the good standing of the Company, dated as of a recent date;
6. Executed copies of the Distribution Agreements and Forward Master Confirmations;
7. A certificate executed by an officer of the Company, dated as of the date hereof; and
8. Such other documents and matters as we have deemed necessary or appropriate to express the opinion set forth below, subject to the assumptions, limitations and qualifications stated herein.
In expressing the opinion set forth below, we have assumed the following:
1. Each individual executing any of the Documents, whether on behalf of such individual or another person, was legally competent to do so, and that each of the parties executing any of the Documents have duly and validly done so.
2. Each individual executing any of the Documents on behalf of a party (other than the Company) was duly authorized to do so.
3. All Documents submitted to us as originals are authentic. The form and content of all Documents submitted to us as unexecuted drafts do not differ in any respect relevant to this opinion from the form and content of such Documents as executed and delivered. All Documents submitted to us as certified or photostatic copies conform to the original documents. All signatures on all such Documents are genuine. All public records reviewed or relied upon by us or on our behalf are true and complete. All statements and information contained in the Documents are true and complete. There has been no oral or written modification or amendment to the Documents, or waiver of any provision of the Documents, by action or omission of the parties or otherwise.
4. The Shares will not be issued or transferred in violation of any restriction or limitation on transfer or ownership of shares of stock of the Company contained in Section 5.7 of the Charter.
5. The Company will issue the Shares in accordance with the Resolutions and, prior to the issuance of any Shares, the Company will have available for issuance, under the Charter, the requisite number of authorized but unissued shares of Common Stock or Series A Preferred Stock, as applicable. As of the date hereof, the Company has available for issuance, under the Charter, the requisite number of authorized but unissued shares of Common Stock and Series A Preferred Stock for the issuance of the Shares.
February 26, 2025
Page 3
6. The aggregate gross sales price for the Shares issued pursuant to the Equity Distribution Agreements will not exceed $500,000,000.
Based upon the foregoing examination and in reliance thereon, and subject to the assumptions, limitations and qualifications stated herein, and in reliance on the statements of fact contained in the documents that we have examined, we are of the opinion that the issuance of the Shares has been duly authorized and when the Shares shall have been duly registered on the books of the transfer agent and registrar therefor in the name or on behalf of the purchasers, or certificates representing the Shares have been manually signed by an authorized officer of the transfer agent and registrar therefor, upon issuance, delivery and payment therefor (not less than par value) in the circumstances contemplated by the Distribution Agreements, the issue and sale of the Shares will have been duly authorized by all necessary corporate action of the Company and the Shares will be validly issued, fully paid and nonassessable.
The foregoing opinion is limited solely to the Maryland General Corporation Law, as amended, and we do not express any opinion herein concerning any other laws, statutes, ordinances, rules, or regulations. We express no opinion as to compliance with the securities (or “blue sky”) laws of the State of Maryland. The opinion expressed herein is subject to the effect of judicial decisions which may permit the introduction of parol evidence to modify the terms or the interpretation of agreements.
This opinion is issued as of the date hereof, and we assume no obligation to supplement this opinion if any applicable law changes after the date hereof or if we become aware of any fact that might change the opinion expressed herein after the date hereof. This opinion is limited to the matters set forth herein, and no other opinion should be inferred beyond the matters expressly stated.
We hereby consent to the filing of this opinion letter in accordance with the requirements of Item 601(b)(5) of Regulation S-K under the Securities Act as Exhibit 5.1 to the Company’s Current Report on Form 8-K to be filed with the Commission on the date hereof (and its incorporation by reference into the Registration Statement) and to the reference to our firm under the caption “Legal Matters” in the Prospectus Supplement. In giving such consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the SEC thereunder.
| Very truly yours, |
|---|
| /s/ Foley & Lardner LLP |
| FOLEY & LARDNER LLP |
Exhibit 8.1
| ATTORNEYS AT LAW<br><br> <br><br><br> <br>100 N TAMPA ST, SUITE 2700<br><br> <br>TAMPA, FL 33602<br><br> <br>813.229.2300 TEL<br><br> <br>813.221.4210 FAX<br><br> <br>www.foley.com |
|---|
February 26, 2025
Via E-Mail and U.S. Mail
Innovative Industrial Properties, Inc.
1389 Center Drive, Suite 200
Park City, Utah 84098
| Re: | Opinion of Foley & Lardner LLP as to Tax Matters |
|---|
Ladies and Gentlemen:
We have acted as counsel to Innovative Industrial Properties, Inc., a Maryland corporation (the “Company”) with respect to certain United States federal income tax matters in connection with (i) the sale, from time to time, of shares of common stock, par value $0.001 per share, of the Company (“Common Stock”) and shares of 9.00% Series A Cumulative Redeemable Preferred Stock, par value $0.001 per share (“Series A Preferred Stock”), with an aggregate offering price of up to $500,000,000 (the “Shares”) pursuant to the terms of those certain Equity Distribution Agreements, each dated as of May 24, 2024, as amended on February 26, 2025, (collectively, the “Distribution Agreements”), by and among the Company and IIP Operating Partnership, LP, a Delaware limited partnership (the “Operating Partnership”), and each of BTIG, LLC, Jefferies LLC, Piper Sandler & Co., and Roth Capital Partners, LLC, as sales agents for the Company (in such capacity, the “Agents”), and each of Jefferies LLC and Piper Sandler Financial Products II Inc., as forward sellers or forward purchasers, respectively) and (ii) those certain Master Confirmations for Issuer Share Forward Sale Transactions, each dated as of May 24, 2024 (collectively, the “Master Forward Confirmations”), by and among the Company, the Operating Partnership, and each forward purchaser. The Shares are included in a registration statement on Form S-3 filed under the Securities Act of 1933, as amended (the “1933 Act”), filed with the Securities and Exchange Commission (the “Commission”) on January 24, 2022 (Registration No. 333-285148) (the “Registration Statement”), and are being offered pursuant to a prospectus dated February 21, 2025 (the “Base Prospectus”) and a prospectus supplement filed with the Commission pursuant to Rule 424(b) under the 1933 Act on February 26, 2025 (the “Prospectus Supplement” and together with the Base Prospectus, the “Prospectus”).
We have been asked to provide an opinion regarding (i) the classification of the Company as a real estate investment trust (“REIT”) under the Internal Revenue Code of 1986, as amended (the “Code”)^1^; and (ii) the accuracy and fairness of the discussion in the Prospectus under the caption “Material U.S. Federal Income Tax Considerations.” Capitalized terms not defined herein shall have the meanings ascribed to them in the Registration Statement.
^1^ Unless otherwise stated, all section references herein are to the Code.
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|---|
Innovative Industrial Properties, Inc.
February 26, 2025
Page 2
In rendering our opinions, we have made such factual and legal examinations, including an examination of such statutes, regulations, records, certificates and other documents as we have considered necessary or appropriate, including, but not limited to, the following: (1) the Prospectus Supplement, Prospectus and Registration Statement (including exhibits thereto); (2) the Second Articles of Amendment and Restatement of the Company, as amended through the date hereof; and (3) the Agreement of Limited Partnership of IIP Operating Partnership, LP (the “Operating Partnership”), dated October 4, 2016, and any amendments thereto through the date hereof. The opinions set forth in this letter also are based on certain written factual representations and covenants made by an officer of the Company, in the Company’s own capacity and in its capacity as the general partner of the Operating Partnership, in a letter to us of even date herewith (the “Officer’s Certificate”) (collectively, the Officer’s Certificate, and the documents described in the immediately preceding sentence are referred to herein as the “Transaction Documents”).
In our review, we have assumed, with the consent of the Company and the Operating Partnership, that (i) all of the factual representations, covenants and statements set forth in the Transaction Documents are true, complete and correct, (ii) all of the obligations imposed by any such documents on the parties thereto have been and will be performed or satisfied in accordance with their terms; (iii) the Company and the Operating Partnership each will be operated in the manner described in the relevant Transaction Documents; and (iv) the Company and the Operating Partnership have valid legal existences under the laws of the states in which they were formed and have operated in accordance with the laws of such states. We have, consequently, assumed and relied on your representations that the information presented in the Transaction Documents (including, without limitation, the Officer’s Certificate and the exhibits thereto) accurately and completely describe all material facts relevant to our opinion and that any representation of fact made “to the knowledge of” or similarly qualified is correct without such qualification. To the extent the representations and covenants speak to the intended ownership or operations of the Company or the Operating Partnership, we have assumed that the Company or Operating Partnership, as the case may be, will in fact be owned and operated in accordance with such stated intent. We have not undertaken any independent inquiry into, or verification of, these facts for the purpose of rendering this opinion. While we have reviewed all representations made to us to determine their reasonableness, we have no assurance that they are or will ultimately prove to be accurate. No facts have come to our attention, however, that would cause us to question the accuracy or completeness of such facts or representations in a material way. Our opinion is conditioned on the continuing accuracy and completeness of such representations, covenants and statements. Any material change or inaccuracy in the facts referred to, set forth, or assumed herein or in the Transaction Documents may affect our conclusions set forth herein.
Innovative Industrial Properties, Inc.
February 26, 2025
Page 3
We also have assumed the legal capacity of all natural persons, the genuineness of all electronic and manual signatures, the proper execution of all documents, the legal capacity of signatories, the authenticity of all documents submitted to us as originals, the conformity to originals of documents submitted to us as copies, and the authenticity of the originals from which any copies were made. For documents that have been provided to us in draft form, we have assumed that the final executed versions of such documents will not differ materially from such drafts.
In addition to the foregoing, in rendering the opinions set forth below, we note that the Company and the Operating Partnership will be engaged in the business of acquiring, owning, and managing specialized industrial properties that will be leased to state-licensed businesses that grow and cultivate cannabis on such properties. We further note that, as described in more detail in the Company’s most recently filed Annual Report on Form 10-K for the fiscal year ended December 31, 2024 (“SEC Form 10-K”), cannabis continues to be a Schedule I controlled substance under the U.S. Controlled Substances Act, and therefore, the possession, cultivation, and production of cannabis products continues to be illegal under federal law notwithstanding state laws that may permit such activities. As described in more detail in the SEC Form 10-K, the cannabis industry occupies a unique and uncertain legal status in the United States. The basic federal prohibition under the U.S. Controlled Substances Act remains in place, and former U.S. Attorney General Jeff Sessions rescinded the U.S. Department of Justice’s previously issued memoranda (the so-called “Cole Memo”) instructing federal prosecutors not to take actions against individuals complying with state medical cannabis laws. The impact of this rescission remains unclear. We are not aware of any specific provisions of the Code or the rules or regulations thereunder, any U.S. tax court decisions, or any private letter rulings that cause us to believe that the nature of the Company’s business will negatively impact how the IRS or the courts would apply to the Company the provisions of the Code and the rules and regulations thereunder relative to the Company’s REIT status, but we cannot be certain that the IRS or the courts will not take a position that negatively affects REIT status by reason of the Company’s business. Accordingly, with your permission, we have assumed for purposes of our opinions herein that the IRS and the courts will not apply or interpret the provisions of the Code and the rules and regulations thereunder relative to an entity’s status as a REIT any differently to the Company and its business than they would be applied to any lawful business.
We have also assumed for purposes of this opinion that neither the IRS nor the courts will consider the Company’s current or contemplated business activities, as described in the Prospectus Supplement, Prospectus and Registration Statement, to include a trade or business that consists of “trafficking in controlled substances” within the meaning of Section 280E of the Code.
Based upon, and subject to, the foregoing assumptions and qualifications and the discussion below, we are of the opinion that:
1. Commencing with the Company’s taxable year ended on December 31, 2017, the Company has been organized and operated in conformity with requirements for qualification and taxation as a REIT under the Code, and the Company’s current and proposed method of operation will enable it to continue to meet the requirements for qualification and taxation as a REIT under the Code, assuming the Company’s election to be treated as a REIT is not either revoked or intentionally terminated under the Code; and
Innovative Industrial Properties, Inc.
February 26, 2025
Page 4
2. The discussion in the Prospectus under the caption “Material U.S. Federal Income Tax Considerations” to the extent it constitutes matters of law, summaries of legal matters or legal conclusions, is correct in all material respects and fairly summarizes the U.S. federal income tax considerations that are likely to be material to a holder of the Company’s Shares, subject to the qualifications set forth therein.
We express no opinion on any issue relating to the Company, the Operating Partnership or the discussions in the Prospectus under the caption “Material U.S. Federal Income Tax Considerations” other than as expressly stated above.
We undertake no obligation to update this opinion, or to ascertain after the date hereof whether circumstances occurring after such date may affect the conclusions set forth herein. We express no opinion as to matters governed by any laws other than the Code, the Treasury Regulations, published administrative announcements and rulings of the Internal Revenue Service (“IRS”), and court decisions.
The Company’s qualification and taxation as a REIT will depend upon the Company’s ability to meet on a continuing basis, through actual annual operating and other results, the various requirements under the Code as described in the Prospectus Supplement, Prospectus and Registration Statement with regard to, among other things, the sources of its gross income, the composition of its assets, the level of its distributions to stockholders, the diversity of its stock ownership and the Company’s utilization of any and all appropriate “savings provisions” (including, without limitation, the provisions of Sections 856(c)(6), 856(c)(7), and 856(g) and the provision included in Section 856(c)(4) (flush language) allowing for the disposal of assets within 30 days after the close of a calendar quarter, and all available deficiency dividend procedures) available to the Company under the Code to correct violations of specified REIT qualification requirements of Sections 856 and 857. Our opinions set forth above do not foreclose the possibility that the Company may have to utilize one or more of these “savings provisions” in the future, which could require amending prior year tax returns and/or the payment of an excise tax and/or penalty tax (either of which could be significant in amount) in order to maintain its REIT qualification. Foley & Lardner LLP will not review the Company’s compliance with these requirements on a continuing basis. Accordingly, no assurance can be given that the actual results of the operations of the Company and the Operating Partnership, the sources of their income, the nature of their assets, the level of the Company’s distributions to stockholders and the diversity of its stock ownership for any given taxable year will satisfy the requirements under the Code for the Company’s qualification and taxation as a REIT. To the extent that the facts differ from those represented to or assumed by us herein, our opinion should not be relied upon.
Innovative Industrial Properties, Inc.
February 26, 2025
Page 5
The foregoing opinions are based on relevant provisions of the Code, Treasury Regulations issued thereunder (including Proposed and Temporary Regulations), and interpretations of the foregoing as expressed in court decisions, administrative determinations, and the legislative history as of the date hereof. These provisions and interpretations are subject to differing interpretations or change at any time, which may or may not be retroactive in effect, and which might result in modifications of our opinions. In this regard, an opinion of counsel with respect to an issue represents counsel’s best judgment as to the outcome on the merits with respect to such issue, is not binding on the IRS or the courts, and is not a guarantee that the IRS will not assert a contrary position with respect to an issue, or that a court will not sustain such a position if asserted by the IRS. The IRS has not issued Regulations or administrative interpretations with respect to various provisions of the Code relating to REIT qualification. No assurance can be given that the law will not change in a way that will prevent the Company from qualifying as a REIT or that may change the other legal conclusions stated herein. As described in the Prospectus Supplement, Prospectus and Registration Statement, the Company’s qualification and taxation as a REIT depend upon the Company’s ability to meet the various qualification tests imposed under the Code, including through actual annual operating results, asset composition, distribution levels and diversity of stock ownership, the results of which have not been and will not be reviewed by Foley & Lardner LLP. Accordingly, no assurance can be given that the actual results of the Company’s operation for any particular taxable year will satisfy such requirements.
The foregoing opinions are limited to the United States federal income tax matters addressed herein, and no other opinions are rendered with respect to other United States federal tax matters or to any issues arising under the tax laws of any other country, or any state or locality. This opinion letter is rendered to you for your use in connection with the Prospectus Supplement, Prospectus and Registration Statement and may be relied upon solely by you and the purchasers of Shares pursuant to the Prospectus Supplement, Prospectus and Registration Statement, and it speaks only as of the date hereof. Except as provided in the next paragraph, this opinion letter may not be distributed, quoted in whole or in part or otherwise reproduced in any document, filed with any governmental agency, or relied upon by any other person for any other purpose (other than as required by law) without our express written consent.
We consent to the use of our name under the captions “Material U.S. Federal Income Tax Considerations” and “Legal Matters” in the Prospectus Supplement, Prospectus and Registration Statement and to the use of these opinions for filing as Exhibit 8.1 to the Registration Statement. In giving this consent, we do not hereby admit that we come within the category of persons whose consent is required under Section 7 of the Securities Act of 1933, or the rules and regulations of the Commission thereunder.
| Very truly yours, |
|---|
| /s/ Foley & Lardner LLP |
| FOLEY & LARDNER LLP |