Innovative Industrial Properties Inc (IIPR) 2024 Q3 法說會逐字稿

Good day, and welcome to the Innovative Industrial Properties third-quarter 2024 earnings call. (Operator Instructions)

美好的一天，歡迎參加創新工業地產 2024 年第三季財報電話會議。（操作員說明）

This event is being recorded. I would now like to turn the conference over to Brian Wolfe, General Counsel. Please go ahead.

該事件正在被記錄。我現在想將會議交給總法律顧問布萊恩沃爾夫 (Brian Wolfe)。請繼續。

Thank you for joining the call. Presenting today are Alan Gold, Executive Chairman; Paul Smithers, President and Chief Executive Officer; David Smith, Chief Financial Officer; Catherine Hastings, Chief Operating Officer; and Ben Regin, Chief Investment Officer.

感謝您加入通話。今天出席會議的有執行主席艾倫‧戈爾德 (Alan Gold)；保羅‧史密瑟斯 (Paul Smithers)，總裁兼執行長；大衛‧史密斯，財務長；凱瑟琳‧黑斯廷斯，營運長；和首席投資長 Ben Regin。

Before we begin, I'd like to remind everyone that statements made during today's conference call may be deemed forward-looking statements within the meaning of the Safe Harbor of the Private Securities Litigation Reform Act of 1995, and actual results may differ materially due to a variety of risks, uncertainties, and other factors.

在開始之前，我想提醒大家，今天電話會議中的陳述可能被視為 1995 年《私人證券訴訟改革法案安全港》含義內的前瞻性陳述，實際結果可能因以下因素而存在重大差異：各種風險、不確定性和其他因素。

Please refer to the documents filed by the company with the SEC, specifically the most recent reports on Forms 10-K and 10-Q, which identify important risk factors that could cause actual results to differ from those contained in the forward-looking statements.

請參閱本公司向 SEC 提交的文件，特別是 10-K 和 10-Q 表格的最新報告，其中確定了可能導致實際結果與前瞻性陳述中包含的結果不同的重要風險因素。

We are not obligated to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. In addition, on today's call, we will discuss certain non-GAAP financial information, such as FFO, normalized FFO, and adjusted FFO.

我們沒有義務公開更新或修改任何前瞻性陳述，無論是由於新資訊、未來事件或其他原因。此外，在今天的電話會議上，我們將討論某些非 GAAP 財務信息，例如 FFO、標準化 FFO 和調整後 FFO。

You can find this information, together with reconciliations to the most directly comparable GAAP financial measure, in our earnings release issued yesterday as well as in our 8-K filed with the SEC. I'll now hand the call over to Alan. Alan?

您可以在我們昨天發布的收益報告以及我們向 SEC 提交的 8-K 中找到這些信息，以及與最直接可比較的 GAAP 財務指標的調節表。我現在將電話轉交給艾倫。艾倫？

Thank you, Brian, and thanks to all of you for joining us this morning on our third-quarter 2024 earnings call. We had a solid third quarter, where we generated $76.5 million in total revenues and $2.25 in AFFO per share.

謝謝 Brian，也謝謝大家今天早上參加我們的 2024 年第三季財報電話會議。我們第三季的業績表現強勁，總營收為 7,650 萬美元，每股 AFFO 為 2.25 美元。

In light of the crosswinds that the regulated cannabis industry has been experiencing for a number of years now, which we have discussed in detail in past quarters, we are pleased overall with how our tenants and portfolio have performed.

鑑於受監管的大麻產業多年來一直經歷的逆風（我們在過去幾季詳細討論過），我們對我們的租戶和投資組合的整體表現感到滿意。

As noted on prior calls, we achieved these results without the full impact of the rents for new leases that we executed in 2023 and year to date, which we expect to commence based in part on these tenants obtaining requisite approvals to operate in addition to certain pre-leased properties under development where construction needs to be completed.

正如之前的電話會議中所指出的，我們取得了這些成果，而沒有受到我們在2023 年和今年迄今執行的新租賃的租金的全面影響，我們預計將部分基於這些租戶獲得運營所需的批准以及某些正在開發中且需要完成施工的預租房產。

Ben and Catherine will provide further updates on our further progress here. On the investment front, we continue to be highly selective in our evaluation of opportunities, closing on a follow-on transaction with one of our tenant partners, MCP, in Maryland last month.

本和凱瑟琳將在這裡提供有關我們進一步進展的進一步更新。在投資方面，我們繼續高度選擇性地評估機會，上個月與我們的租戶合作夥伴之一 MCP 在馬裡蘭州完成了後續交易。

Of course, we continue to have what I think is one of the most resilient capital positions among real estate companies generally. Our total available liquidity exceeded $220 million as of quarter end, fully funding all remaining development commitments and continuing to provide us with ample dry powder for additional strategic investments.

當然，我們仍然擁有我認為總體上房地產公司中最具彈性的資本狀況之一。截至季度末，我們的可用流動資金總額超過 2.2 億美元，為所有剩餘的開發承諾提供充分資金，並繼續為我們提供充足的乾粉以進行額外的戰略投資。

And we further enhanced that liquidity position just last week, expanding our revolving line of credit by $37.5 million and introducing two new banks to the syndicate. We continue to have one of the lowest levered balance sheets in the REIT industry at 11% debt to total gross assets, no variable rate debt, and no debt maturities until May 2026. David will provide more detail as well on our financial results for the quarter and capital position.

就在上週，我們進一步增強了流動性頭寸，將循環信貸額度擴大了 3,750 萬美元，並向銀團引入了兩家新銀行。我們仍然是 REIT 行業槓桿率最低的資產負債表之一，債務佔總資產的 11%，沒有可變利率債務，並且在 2026 年 5 月之前沒有債務到期日。大衛還將提供有關我們本季財務業績和資本狀況的更多詳細資訊。

From a regulatory perspective, there's a fair amount to talk about as we digest the results of the most recent election cycle, and additional state program developments. In addition to the continued progress on potential rescheduling of cannabis from Schedule 1 to Schedule 3.

從監管的角度來看，當我們消化最近的選舉週期的結果以及其他州計劃的進展時，有很多值得討論的內容。除了將大麻從附表 1 重新安排到附表 3 方面繼續取得進展。

I will now turn the call over to Paul, to discuss our thoughts on election results, regulatory developments, and market dynamics. Paul?

我現在將把電話轉給保羅，討論我們對選舉結果、監管發展和市場動態的想法。保羅？

Thanks, Alan. First off, with regard to the presidential and congressional election results, we would note that this is the first election cycle in US history where both presidential candidates have supported cannabis reform.

謝謝，艾倫。首先，關於總統和國會選舉結果，我們要指出的是，這是美國史上首次兩位總統候選人都支持大麻改革的選舉週期。

While tentative results of the presidential election indicate that Donald Trump has received the necessary electoral votes, as well as the Republican Senate and a house that is skewing Republican, we note, of course, the continuing strong and growing bipartisan support for cannabis reform at the federal level and remain optimistic on that front.

雖然總統選舉的初步結果表明唐納德·川普已經獲得了必要的選舉人票，以及共和黨參議院和偏向共和黨的眾議院，但我們當然注意到，兩黨對大麻改革的持續強​​勁且不斷增長的支持聯邦層面並對此保持樂觀。

Presumed President elect Trump's recent remarks in September on federal cannabis reform are also encouraging, with a focus on Safe Banking for state authorized companies and supporting states rights for passing and operating regulated cannabis programs. That said, the path forward on meaningful cannabis reform at the federal level does narrow in our view in the near term, assuming the current expected results hold.

當選總統川普最近在 9 月關於聯邦大麻改革的言論也令人鼓舞，重點是國家授權公司的安全銀行業務，並支持各州通過和經營受監管大麻計畫的權利。也就是說，假設目前的預期結果成立，我們認為短期內聯邦層級有意義的大麻改革的前進道路確實會縮小。

Looking at state voting results, four states had cannabis legalization matters on their ballots in the election cycle, including adult use programs for Florida, South Dakota, and North Dakota and medical use for Nebraska. In Florida, while Amendment 3 received majority support from voters, it failed to receive the requisite 60% voter support to legalize adult use cannabis despite the previous support from Donald Trump.

從州投票結果來看，四個州在選舉週期的選票上有大麻合法化問題，包括佛羅裡達州、南達科他州和北達科他州的成人使用計劃以及內布拉斯加州的醫療用途。在佛羅裡達州，雖然第 3 號修正案獲得了多數選民的支持，但儘管唐納德·川普此前曾表示支持，但它未能獲得成人使用大麻合法化所需的 60% 選民支持。

Both North Dakota and South Dakota also failed to pass their adult use cannabis referendums. Finally, Nebraska voters approved the adoption of a medical use cannabis program with more than two-thirds support, reflecting, again, the large majority support for medical cannabis shown in polls of Nebraska residence.

北達科他州和南達科他州也未能通過成人使用大麻公投。最後，內布拉斯加州選民以超過三分之二的支持率批准了醫用大麻計畫的通過，這再次反映出內布拉斯加州居民民調顯示絕大多數人對醫用大麻的支持。

Assuming the ongoing legal challenges regarding signature for ballot access are rejected, Nebraska will join the overwhelming majority of states that have adopted a medical-use cannabis program. And in Minnesota, it has been quite some time coming, but the state's Office of Cannabis Management expects to finalize rules for the adult-use program in the first quarter of 2025 with the expectation of commencing adult-use operations shortly thereafter.

假設有關投票訪問簽名的持續法律挑戰被拒絕，內布拉斯加州將加入絕大多數已採用醫用大麻計劃的州的行列。在明尼蘇達州，這已經有一段時間了，但該州大麻管理辦公室預計將在 2025 年第一季敲定成人使用計畫的規則，並預計不久後將開始成人使用業務。

Regarding the DEA's progress on rescheduling cannabis from Schedule 1 to Schedule 3, we will, of course, be closely watching the administrative hearing on the matter, which was recently postponed from December 2, to a date likely in early 2025.

關於 DEA 將大麻從附表 1 重新安排到附表 3 的進展，我們當然會密切關注有關此事的行政聽證會，該聽證會最近從 12 月 2 日推遲到可能在 2025 年初的日期。

Visibility on rescheduling continues to be murky, factoring in the administrative hearing and the tens of thousands of comments received from the public. Nonetheless, we remain cautiously optimistic that rescheduling will continue to make forward progress.

考慮到行政聽證會和公眾收到的數萬條評論，重新安排的前景仍然不明朗。儘管如此，我們仍對重新安排將繼續取得進展保持謹慎樂觀。

Looking to the general market dynamics, while we continue to see positive incremental steps toward additional state programs coming online and more efforts to combat the illicit markets, we do see continued financial pressure on licensed cannabis markets having to compete with the untaxed, unregulated, and historically unchecked illicit market, especially since inflationary pressures have made consumers all the more cost conscious.

著眼於整體市場動態，雖然我們繼續看到更多國家計劃上線以及加強打擊非法市場的力度，但我們確實看到許可大麻市場面臨持續的財務壓力，不得不與免稅、不受監管和非法市場競爭。

To give a sense of the magnitude of the illicit market in certain states, while difficult to measure, it is estimated that the California illicit market alone is a $10 billion industry. And while California authorities recently announced the seizures or eradication of over $500 million of illicit cannabis year to date, that amounts to a mere 5% of the total estimated size of the illicit market. That said, we are seeing some progress in certain states and localities that have shifted priorities to more meaningful enforcement against illicit operators.

為了了解某些州非法市場的規模，雖然難以衡量，但據估計，光是加州的非法市場就具有 100 億美元的產業規模。儘管加州當局最近宣布今年迄今查獲或剷除價值超過 5 億美元的非法大麻，但這僅佔非法市場估計總規模的 5%。也就是說，我們看到某些州和地方取得了一些進展，它們已將優先事項轉向對非法經營者進行更有意義的執法。

In New York, for example, pursuant to legislation passed last year and increased civil and tax penalties on license sales of cannabis and provided additional enforcement powered authorities, New York has seen a significant uptick in enforcement actions in the illicit market, which we believe have also contributed to a strengthening of the license market, which is on pace to potentially exceed $1 billion in regulated adult use sales in 2024.

例如，在紐約，根據去年通過的立法，增加了對大麻許可證銷售的民事和稅收處罰，並提供了額外的執法權力機構，紐約非法市場的執法行動顯著增加，我們認為這已經還有助於加強授權市場，到2024 年，受監管的成人使用銷售額預計將超過10 億美元。

From a capital raising and M&A perspective, while the regulated cannabis industry continues to be challenged, we are seeing signs of more activity in the debt markets for MSO refinancing, most recently evidenced by our tenant Ascend's Q3 closing on a private placement of $235 million of senior secured notes due in 2029.

從融資和併購的角度來看，雖然受監管的大麻產業繼續面臨挑戰，但我們看到MSO 再融資債務市場出現更多活動的跡象，最近我們的租戶Ascend 第三季完成的2.35 億美元私募融資就證明了這一點。

Of course, we are closely following developments and monitoring execution of refinancing plans for a number of MSOs that have debt maturities in the coming few years, with the bulk of those maturities coming in 2026. I'd like to now turn the call over to Ben to discuss our investment and leasing activity in Q3 and year to date. Ben?

當然，我們正在密切關注未來幾年債務到期的 MSO 再融資計劃的進展和執行情況，其中大部分債務將於 2026 年到期。我現在想將電話轉給 Ben，討論我們在第三季和今年迄今為止的投資和租賃活動。本？

Thanks, Paul. As we've noted on prior calls this year, we've made good progress in our execution on both new investment opportunities, as well as the releasing of our vacant assets. Year to date, we have re-tenanted four properties, covering $69 million in invested capital and selectively close on new investments of just over $70 million.

謝謝，保羅。正如我們在今年之前的電話會議中指出的那樣，我們在執行新的投資機會以及釋放空置資產方面都取得了良好進展。今年迄今為止，我們已經重新租用了四處房產，投資資本達 6,900 萬美元，並選擇性地完成了剛剛超過 7,000 萬美元的新投資。

As we noted in our press release yesterday, we closed on a $5.6 million acquisition in Maryland of a cannabis processing facility and executed a long-term lease with MCP, one of our existing tenant partners. We continue to track an active pipeline across markets, evaluating opportunities, and look forward to executing on new investments on a very selective disciplined basis.

正如我們在昨天的新聞稿中指出的，我們完成了對馬裡蘭州一家大麻加工設施的 560 萬美元收購，並與我們現有的租戶合作夥伴之一 MCP 簽訂了長期租賃合約。我們將繼續追蹤跨市場的活躍管道，評估機會，並期待在非常選擇性、嚴格的基礎上執行新投資。

Within our portfolio, while the vast majority has continued to perform well despite the market headwinds, as we noted in our press release yesterday, we applied security deposits for the payments of rent from 4Front, TILT, and Emerald Growth, where we collected partial rent from these three tenants in October.

在我們的投資組合中，儘管市場逆風，絕大多數仍表現良好，正如我們在昨天的新聞稿中指出的那樣，我們使用保證金來支付4Front、TILT 和Emerald Growth 的租金，我們在這些公司收取了部分租金十月從這三個租戶那裡。

As we noted in prior calls, 4Front has experienced delays of well over a year in the development of their large-scale cultivation and processing facility in Illinois, primarily as a result of issues relating to delivery of power from the local utility. We are pleased to see the facility complete and operational during the first quarter of this year.

正如我們在先前的電話中指出的那樣，4Front 在伊利諾伊州的大型種植和加工設施的開發過程中經歷了一年多的延遲，這主要是由於與當地公用事業公司的電力傳輸相關的問題。我們很高興看到該設施在今年第一季竣工並投入營運。

However, this delay was understandably impactful to their expected cash flows. Also, in Q3, we successfully regained possession of a property in Massachusetts previously leased to Temescal Wellness, and we'll be looking to bring in another qualified cannabis operator to that asset.

然而，這種延遲對他們的預期現金流量產生了影響，這是可以理解的。此外，在第三季度，我們成功重新獲得了先前租給 Temescal Wellness 的馬薩諸塞州一處房產的所有權，我們將尋求為該資產引入另一家合格的大麻營運商。

With that, I'll turn it over to Catherine. Catherine?

這樣，我就把它交給凱瑟琳。凱瑟琳？

Thanks, Ben. We've made strong progress in 2024 year to date on closing out or nearing completion on many of our tenants remaining development projects. We've completed five leased projects during the year, which are now operational for our tenants.

謝謝，本。2024 年迄今，我們在關閉或接近完成許多租戶剩餘開發案方面取得了巨大進展。我們在這一年裡完成了五個租賃項目，現已為我們的租戶投入營運。

Vireo's 325,000 square foot expansion in New York, 4Front's 250,000 square foot ground up development in Illinois, Battle Green's 157,000 square foot ground up development in Ohio, the 23,000 square foot Perez Road development project in California, and this quarter, completing the cultivation build out of 104,000 square feet in our Summit building in Michigan, which is now 100% operational.

Vireo 在紐約的325,000 平方英尺的擴建項目、4Front 在伊利諾伊州的250,000 平方英尺的地面開發項目、Battle Green 在俄亥俄州的157,000 平方英尺的地面開發項目、加利福尼亞州的23,000 平方英尺的Perez Road 開發項目，以及本季完成的種植建設我們位於密西根州的 Summit 大樓佔地 104,000 平方英尺，現已 100% 投入營運。

We are pleased to see that these facilities are complete and are focused on bringing the success to our remaining assets under redevelopment. Regarding our portfolio, as of September 30, we owned 108 properties across 19 states, comprising 9 million rentable square feet, including 618,000 square feet of development or redevelopment.

我們很高興看到這些設施已經完工，並致力於為我們剩餘的重建資產帶來成功。關於我們的投資組合，截至 9 月 30 日，我們在 19 個州擁有 108 處房產，包括 900 萬平方英尺的可出租面積，其中包括 618,000 平方英尺的開發或再開發面積。

Of these 108 properties, 105 properties are included in our operating portfolio, which was 95.7% leased at quarter end with a weighted average remaining lease term of 14 years. Of the three properties under development, redevelopment, one was preleased at quarter end, and the remaining two assets consist of 192,000 square feet of warehouse space in San Bernardino and a 12 acre parcel of land in Texas.

在這 108 處房產中，有 105 處房產屬於我們的營運投資組合，截至季末，租賃率為 95.7%，加權平均剩餘租賃期為 14 年。在正在開發和再開發的三處房產中，一處已於季度末預售，其餘兩處資產包括位於聖貝納迪諾的192,000 平方英尺的倉庫空間和位於德克薩斯州的一塊12 英畝的土地。

Our portfolio continues to be well diversified with no one tenant representing more than 17% of our annualized base rent and no state representing more than 15% of our annualized base rent. We have relationships with some of the largest and most experienced operators in the industry. With our leased operating portfolio comprised of 91% multi-state operators, and 62% leased to public company tenants.

我們的投資組合持續多元化，沒有一個租戶占我們年化基本租金的 17% 以上，也沒有一個州占我們年化基本租金的 15% 以上。我們與業內一些規模最大、經驗最豐富的營運商建立了合作關係。我們的租賃經營投資組合由 91% 的跨國業者組成，62% 租賃給上市公司租戶。

The total amount of capital invested and committed across our operating portfolio equates to $281 per square foot, which we believe remains significantly below replacement cost. And with that, I'll turn it over to David. David?

我們的營運投資組合投資和承諾的資本總額相當於每平方英尺 281 美元，我們認為這仍然大大低於重置成本。有了這個，我會把它交給大衛。大衛？

Thank you, Catherine. For the third quarter, we generated total revenues of $76.5 million compared to $77.8 million for the same period in 2023. The decrease was primarily due to a $3 million loss in revenue for properties we took back possession of since the second quarter of 2023, $1.3 million in rent received during the quarter but not recognized in total revenues due to a reclassification of two leases as sales type leases as of January 1, 2024, and $1.3 million of contractually due rent interest and property management fees that were not collected during the quarter.

謝謝你，凱瑟琳。第三季度，我們的總營收為 7,650 萬美元，而 2023 年同期為 7,780 萬美元。減少的主要原因是我們自2023 年第二季以來收回的房產收入損失了300 萬美元，本季度收到的租金為130 萬美元，但由於將兩項租賃重新分類為銷售類型而未在總收入中確認截至 2024 年 1 月 1 日的租賃，以及本季未收取的 130 萬美元合約到期租金利息和物業管理費。

The decrease was partially offset by a $4.6 million increase in contractual rent and property management fees primarily due to contractual rent escalations, amendments to leases for additional improvement allowances at existing properties, and new leases entered into since June 2023.

這一下降被合約租金和物業管理費增加 460 萬美元部分抵消，這主要是由於合約租金上漲、對現有物業額外改善津貼的租約修訂以及自 2023 年 6 月以來簽訂的新租約所致。

Revenues for the quarter were also down sequentially versus the second quarter of this year, primarily as a result of a one-time disposition lease termination fee of $3.9 million earned in the second quarter relating to the sale of our Esperanza property in Los Angeles. As we noted in our press release last night, our third-quarter results also included $1.4 million of security deposits applied for contractually due rent.

與今年第二季相比，該季度的收入也出現環比下降，主要原因是第二季因出售我們在洛杉磯的埃斯佩蘭薩房產而賺取的一次性處置租賃終止費 390 萬美元。正如我們昨晚在新聞稿中指出的那樣，我們第三季的業績還包括用於支付合約到期租金的 140 萬美元保證金。

And we applied the remainder of 4Front security deposits totaling $0.5 million for payment of rent owed for October. We are closely monitoring 4Front's progress and, at this point, expect rent collection for 4Front well below what is contractually due for the fourth quarter.

我們使用 4Front 保證金的剩餘部分 50 萬美元來支付 10 月所欠的租金。我們正在密切關注 4Front 的進展，目前預計 4Front 的租金收入將遠低於第四季度合約規定的租金。

AFFO for the third quarter was $64.3 million or $2.25 per share, a 2% decrease versus the second quarter of 2024, driven primarily by one time interest payments of $1 million or $0.04 per share received on a secured construction loan in the second quarter and a lease termination with Temescal in Massachusetts during the third quarter.

第三季的AFFO 為6,430 萬美元，即每股2.25 美元，比2024 年第二季下降2%，這主要是由於第二季擔保建築貸款收到的一次性利息支付100 萬美元，即每股0.04 美元，以及第三季終止與馬薩諸塞州 Temescal 的租約。

As we've noted on prior calls, while we expect the releasing activity we achieved this year to contribute meaningfully to our long-term earnings, the timeline to rent stabilization may differ between the properties as there are state and local approvals needed for these transitions, additional regulatory requirements to be completed at certain assets, and some level of rent abatement is negotiated to allow for a ramping of our new tenant's operations.

正如我們在之前的電話會議中指出的那樣，雖然我們預計今年實現的釋放活動將對我們的長期收益做出有意義的貢獻，但租金穩定的時間表可能因物業而異，因為這些過渡需要州和地方的批准、對某些資產要完成的額外監管要求，以及協商一定程度的租金減免，以允許我們新租戶的業務擴大。

That being said, we are seeing continued progress on this front with (inaudible) receiving approvals for operation of the Harvest Park facility and completion of the cultivation space for our Summit project, both in Michigan with rent expected to ramp up in the next three to six months.

話雖這麼說，我們看到這方面的持續進展，（聽不清楚）獲得了Harvest Park 設施運營的批准以及Summit 項目種植空間的竣工，這兩個項目都位於密西根州，租金預計將在未來三年內上漲六個月。

Since our IPO in 2016, we have maintained one of the most conservative balance sheets in the REIT industry, and that continued this quarter. With only $300 million of debt on gross assets of $2.6 billion, our debt to gross assets was a low 11% and our debt service coverage ratio was a strong 17 times. We expect to continue to run the business with a conservative balance sheet and maintain strong liquidity.

自 2016 年首次公開募股以來，我們一直保持著房地產投資信託行業中最保守的資產負債表之一，本季繼續如此。我們的總資產為 26 億美元，債務僅 3 億美元，債務與總資產的比率僅 11%，償債覆蓋率高達 17 倍。我們預計將繼續以保守的資產負債表經營業務，並保持強勁的流動性。

Regarding liquidity, we finished the third quarter with over $220 million of total liquidity, which is slightly higher than the second quarter, and is comprised of our cash, short-term investments, and availability under our revolving credit facility. And just this week, we added two banks to our revolving line of credit, bringing it to four in total, and expanded capacity by another $37.5 million.

關於流動性，第三季末我們的流動性總額超過 2.2 億美元，略高於第二季度，包括現金、短期投資和循環信貸額度下的可用資金。就在本週，我們在循環信貸額度中增加了兩家銀行，使信貸額度總數達到四家，容量又增加了 3,750 萬美元。

Our total capacity on our revolver now stands at $87.5 million, all of which is undrawn as of today. We are pleased that we have nearly tripled the size of this revolver since a year ago and appreciate the increasing support from our banking relationships.

目前，我們的左輪手槍總容量為 8,750 萬美元，截至今天全部尚未提取。我們很高興自一年前以來將這款左輪手槍的尺寸增加了近兩倍，並感謝我們的銀行關係不斷增加的支持。

We are continuing to have dialogue with numerous banks regarding their interest in joining our credit facility to continue to increase the overall capacity. Finally, we opportunistically issued shares of our Series A preferred stock under our ATM program in the third quarter, totaling $9.6 million in net proceeds.

我們正在繼續與眾多銀行就其加入我們的信貸安排的興趣進行對話，以繼續提高整體能力。最後，我們在第三季根據 ATM 計劃機會性地發行了 A 系列優先股，淨收益總計 960 萬美元。

As we noted previously, we entered into a new ATM program in the second quarter to provide additional flexibility in the offering of common stock on a forward basis and issuance of shares of our Series A preferred stock from time to time, and we're excited with the demand we saw for our preferred stock during the quarter.

正如我們之前指出的，我們在第二季度啟動了一項新的 ATM 計劃，為遠期普通股發行和不時發行 A 系列優先股提供額外的靈活性，我們感到很興奮我們在本季度看到對優先股的需求。

Overall, we are pleased with where we are positioned as our balance sheet remains strong with leverage among the lowest in the REIT industry, and we have continued to demonstrate access to many capital markets.

總體而言，我們對自己的定位感到滿意，因為我們的資產負債表仍然強勁，槓桿率在房地產投資信託行業中處於最低水平，我們繼續展示了進入許多資本市場的機會。

With that, I'll turn it back to Alan. Alan?

有了這個，我會把它轉回給艾倫。艾倫？

Thanks, David. I'd like to note the following in closing. I'm proud of what our team has accomplished year to date and especially in light of some of the enduring challenges faced by the regulated cannabis industry. We continue to be laser-focused on maximizing the value of each property in our portfolio for the benefit of our stockholders.

謝謝，大衛。最後我想指出以下幾點。我對我們的團隊今年迄今所取得的成就感到自豪，特別是考慮到受監管的大麻產業面臨的一些持久挑戰。我們將繼續專注於最大化我們投資組合中每項房產的價值，以造福我們的股東。

And I see our company as exceptionally well positioned from overall capitalization and liquidity perspective to continue to execute on additional investments where we see the potential for exceptional risk adjusted returns. As long-term owners of our company, thank you, as always, for your continued support. And with that, I'd like to open it up to questions. Operator, could you please open the call up for questions?

我認為，從整體資本和流動性的角度來看，我們公司處於非常有利的位置，可以繼續執行額外的投資，我們認為這些投資有可能獲得異常的風險調整回報。作為我們公司的長期所有者，感謝您一如既往的持續支持。說到這裡，我想提出一些問題。接線員，可以撥打電話詢問問題嗎？

We will now begin the question-and-answer session to ask a question. (Operator Instructions)

我們現在將開始問答環節來提出問題。（操作員說明）

Tom Catherwood, BTIG.

湯姆·凱瑟伍德，BT​​IG。

Thanks, and good morning, everyone. Maybe starting with Alan or Paul. In the past, you've worked with tenants that faced operating challenges usually by doing short-term lease amendments. For the tenants that paid partial or no rent in Q3, did they just stop paying out of the blue? Or did they come to you ahead of time looking for some kind of amendment or work out and you declined?

謝謝，大家早安。也許從艾倫或保羅開始。過去，您與面臨營運挑戰的租戶合作，通常會進行短期租約修改。對於第三季支付部分租金或不支付租金的租戶來說，他們是突然停止支付租金了嗎？或者他們提前來找您尋求某種修改或解決方案，但您拒絕了？

So, well, first, we have worked and we continue to work with all of our tenants on understanding their businesses, and making sure that we know what they are doing and how things are going. So we are aware of what's going on with our tenants. So that's number one.

所以，首先，我們已經並將繼續與所有租戶合作，了解他們的業務，並確保我們知道他們在做什麼以及事情進展如何。所以我們知道我們的租戶發生了什麼事。所以這是第一。

Number two, we want to work with our tenants when they are experiencing unusual or unforeseen issues, such as what we've done with 4Front with the power issue in Illinois.

第二，當租戶遇到不尋常或不可預見的問題時，我們希望與他們合作，例如我們與 4Front 合作處理伊利諾伊州的電力問題。

And we've been able to work through that issue with them and, I think, come to a very amicable and positive resolution for our shareholders and ourselves in addition to themselves. So that's what we do. And now, Paul?

我們已經能夠與他們一起解決這個問題，我認為，我們為我們的股東和我們自己以及他們自己達成了非常友好和積極的解決方案。這就是我們所做的。現在，保羅？

Yeah. I think, Tom, you've seen how we've dealt with these issues in the past. And we do take a different path to paying on each situation. So if I'll describe it, it's a situation that is something unusual.

是的。我想，湯姆，你已經看到我們過去是如何處理這些問題的。我們確實針對每種情況採取不同的付款方式。所以如果我來描述的話，這是一種不尋常的情況。

You know, we saw some of this during COVID supply chain issues. We work with that tenant. But on the other hand, if the situation, as we've seen in the past, is it was a tenant that just stops paying rent, and we don't see a reasonable path for them to restart paying rent and get back to even, we take a very aggressive scans and regaining the possession of the property. So there's two paths that we take, and it's really dependent on the situation.

你知道，我們在新冠肺炎供應鏈問題中看到了一些這樣的情況。我們與該租戶合作。但另一方面，如果情況正如我們過去所看到的那樣，是租戶停止支付租金，並且我們看不到讓他們重新開始支付租金並恢復平衡的合理途徑，我們進行了非常積極的掃描並重新獲得了該財產的所有權。因此，我們有兩條路可走，這實際上取決於具體情況。

Got it. Appreciate those thoughts. And then, maybe going over to acquisitions. Last quarter, it sounded like operators were almost in a wait and see kind of mode waiting for the election, waiting to see what would happen with rescheduling before making any investment decisions.

知道了。欣賞這些想法。然後，也許會轉向收購。上個季度，聽起來營運商幾乎處於等待選舉的觀望模式，等待看看重新安排會發生什麼，然後再做出任何投資決定。

What worries us is a scenario where the addressable market for cultivation acquisitions with high quality operators is just more limited than once thought. How do you think of the potential to scale acquisitions and grow your portfolio without having to go further out on the risk curve with less experienced operators?

令我們擔憂的是，高品質業者的種植收購潛在市場比我們之前想像的更加有限。您如何看待擴大收購規模和擴大投資組合而不必與經驗不足的營運商進一步擴大風險曲線的潛力？

So, I mean, I can turn it over to Ben to kind of talk about a pipeline where we still have -- I think, a strong pipeline. But before we do that, I mean, I think we're your presumption is that the industry is installed all of a sudden because of some political outcome or something that election, perhaps, that's weighing on many people's thoughts.

所以，我的意思是，我可以把它交給本，談談我們仍然擁有的管道——我認為，一個強大的管道。但在我們這樣做之前，我的意思是，我認為我們的假設是，該行業是由於某些政治結果或選舉的某些事情而突然建立的，這可能會影響許多人的想法。

But this industry has been around for a period of time, and it's going to be around for a long period of time, and it's not going anywhere. And revenue sales are expected to increase 9% year over year. The industry is definitely growing.

但這個行業已經存在了一段時間了，而且還會存在很長一段時間，而且不會消失。銷售收入預計將年增9%。這個行業肯定在成長。

Our largest growers are constantly looking at opportunistic ways of expanding of their businesses. And we believe that in 2025, with the advent of what we think is a positive outcome from rescheduling, that there is going to be a significant continued resurgence of interest in the industry in addition to the continued growth of sales.

我們最大的種植者一直在尋找機會主義的方式來擴展他們的業務。我們相信，到 2025 年，隨著我們認為重新安排帶來的積極成果的出現，除了銷售額的持續增長之外，對該行業的興趣還將持續大幅復甦。

Ben, you want to talk about our pipeline at all or I mean I think we've been cautiously optimistic about our pipeline. We've been looking at transactions very carefully given the uncertainties that we've seen.

本，你想談談我們的管道，或者我的意思是我認為我們對我們的管道一直持謹慎樂觀的態度。鑑於我們所看到的不確定性，我們一直非常仔細地審查交易。

Just to reiterate to what I was talking about is we're continuing to see that growth in the industry to highlight again, we're expecting north of a 9% CAGR through 2028 in the industry overall. We're very happy with what we're seeing in the pipeline and the quality of the transactions, and we will execute on those in 2025 on a very disciplined selective basis.

重申我剛才所說的，我們將繼續看到該行業的成長，再次強調，我們預計到 2028 年整個產業的複合年增長率將超過 9%。我們對我們所看到的進展和交易品質感到非常滿意，我們將在 2025 年以非常嚴格的選擇性基礎上執行這些項目。

Got it. Thank you for that color. And then last one for me, if I can be sticking with you for the asset that you took back in in North Adams Massachusetts, I know it's early. But what is the outlook for backfilling that space, and is any incremental investment needed to get the building market ready?

知道了。謝謝你的那個顏色。最後一點是，如果我能堅持你在馬薩諸塞州北亞當斯收回的資產，我知道現在還早。但回填這一空間的前景如何？

I can handle that. We just took back that facility September 30. So like you said, it is very early in the process, but the facility is a fully built out cannabis cultivation and processing facility. And we believe that we should have the same general reusability that we've seen on other built out assets that we've re-tenanted.

我能處理好。我們剛剛在 9 月 30 日收回該設施。正如您所說，這個過程還處於早期階段，但該設施是一個完全建成的大麻種植和加工設施。我們相信，我們應該具有與我們在重新租用的其他建成資產上看到的相同的一般可重用性。

Understood. That's it for me. Thanks, everyone.

明白了。對我來說就是這樣。謝謝大家。

Alexander Goldfarb, Piper Sandler.

亞歷山大·戈德法布，派珀·桑德勒。

Hey, morning, out there. Maybe just continue on Tom's question, a question on the tenant credit. A two partner in the tenant credit. One is you guys made an additional investment in 4Front in the second quarter. They have four properties, and it sounds like there was only an issue with one of the properties.

嘿，早上好，外面。也許繼續湯姆的問題，一個關於租戶信用的問題。租戶信貸中的兩位合夥人。一是你們在第二季對4Front進行了追加投資。他們有四個屬性，聽起來好像只有其中一個屬性有問題。

So just want to get a bit more understanding on maybe it was all one lease across the four properties. So in order for them to not pay on one, it implied all of them. But maybe just some more color on the comfort of giving them more investment last quarter for properties and then a power issue on one of the properties.

因此，我只是想多了解一下，也許這只是四處房產的租約。因此，為了讓他們不為其中一個付費，就意味著他們所有人。但也許只是上個季度為他們更多的房地產投資帶來了更多的色彩，然後其中一處房產出現了電力問題。

And then regarding the other two tenants, is this -- years ago, we used to talk or I used to it was my words, my words, you know, sort of a whack-a-mole where there'd be a tenant issue, that will get resolved, there will be another one.

然後關於另外兩個租戶，是這樣的——幾年前，我們曾經談論過，或者我過去常常是我的話，我的話，你知道，有點像打地鼠，其中會出現租戶問題，這個問題會得到解決，還會有另一個問題。

So I just want to understand if that maybe is, in fact, how the business works, that there's always going to be a few tenants not necessarily the same, but a few that are always surfacing. And therefore, this isn't a bad thing. It's just part of the business.

所以我只是想了解這是否可能是，實際上，業務是如何運作的，總是會有一些租戶不一定是相同的，但總是會有一些租戶出現。因此，這並不是一件壞事。這只是業務的一部分。

Well, I mean, certainly, there's -- we would love to be fully 100% leased and not have any tenants ever have a bad situation. We, that would be the ideal, the ideal operating environment, but it would get kind of boring for you guys. If we did that, you wouldn't have any questions to talk to ask us about. So this really gives us, you know, opportunities to know. I'm obviously.

嗯，我的意思是，當然，我們希望 100% 完全出租，並且不會讓任何租戶遇到不好的情況。我們，那會是理想的、理想的操作環境，但對你們來說會有點無聊。如果我們這樣做，您就沒有任何問題可以向我們詢問。所以這確實給了我們了解的機會。我顯然是。

We appreciate the excitement.

我們很欣賞這種興奮。

But look, every industry has every real estate sector has ups and downs and has tenants that over expand and need to retrench. And so we're no different than all the others. The difference is we've been paid a very high adjusted rate of return for what we believe is very a much lower risk profile. And we've been paid that for a long period of time, and we have a very long weighted average lease length to continue to capitalize on that disparity to our favor.

但你看，每個產業、每個房地產產業都有起有落，都有過度擴張、需要緊縮的租戶。所以我們和其他人沒有什麼不同。不同之處在於，我們獲得了非常高的調整後回報率，而我們認為風險狀況卻低得多。我們已經支付了很長一段時間的費用，而且我們有很長的加權平均租賃期限，可以繼續利用這種對我們有利的差異。

With that, I'll turn it over to Ben to talk about the --

說到這裡，我會把它交給 Ben 來談談--

Sure, Alex. I just wanted to touch on your question on 4Front. I mean, we did make an investment in the Illinois facility to round out construction there. We do have four individual leases with 4Front, but that is by far the largest, and there was significant delays in construction, which understandably had an impact on the overall cash flow.

當然，亞歷克斯。我只是想談談你在 4Front 上提出的問題。我的意思是，我們確實對伊利諾伊州的工廠進行了投資，以完善那裡的建設。我們確實與 4Front 簽訂了四份單獨的租賃合同，但這是迄今為止最大的一份，並且施工出現了嚴重延誤，這對整體現金流產生了影響，這是可以理解的。

That asset is in Illinois, which is one of the top five markets in the US. We feel very confident in the Illinois market. And as Paul described, we look at each of these situations individually, and we're looking to maximize value portfolio. And we feel very positive about the future resolution for these issues.

該資產位於伊利諾州，該州是美國前五個市場之一。我們對伊利諾伊州市場非常有信心。正如保羅所描述的，我們會單獨考慮每種情況，並尋求最大化投資組合的價值。我們對這些問題的未來解決方案感到非常積極。

So it was just the one asset that defaulted, the other three were still paying. Is that's what I hear you saying?

因此，只有一項資產違約，其他三項資產仍在付款。我聽到你就是這麼說的嗎？

Yeah. It's just, again, just to talk generally, we do have a cross default language on those. We look at each tenant overall with our parent company guarantees that we have on all of our leases. This asset given the size and what we think this is going to produce once this is fully up and running, it can be very meaningful to their business overall going into 2025.

是的。只是，再說一遍，只是籠統地說，我們確實有一個跨預設語言。我們會全面審視每個租戶，並為我們的所有租約提供母公司的擔保。考慮到該資產的規模以及我們認為一旦完全啟動並運行後將產生的成果，它對他們進入 2025 年的整體業務非常有意義。

We really like the Illinois market. We think it's going to be a tremendous boost to their business once that, once that Illinois building fully operational.

我們真的很喜歡伊利諾伊州市場。我們認為，一旦伊利諾伊州大樓全面投入運營，這將對他們的業務產生巨大的推動作用。

Okay. And then, Paul, on the three ballot defeats. It's been a while since we've had that. I don't know if that's the start of a trend or is there a read through to that? Is it that -- is that maybe states are reflecting whether or not legalizing cannabis is a good thing? Or is it just they, they've seen how the tax scheme has worked in other states and maybe people, maybe everyone just buys from their guy and they don't need it legal? Just trying to understand why we had these three defeats versus a long string of wins?

好的。然後，保羅談三輪投票的失敗。我們已經有一段時間沒有這樣了。我不知道這是否是一種趨勢的開始，或者是否有對此進行解讀？是不是各州正在反思大麻合法化是否是件好事？或者只是他們，他們已經看到稅收計劃在其他州是如何運作的，也許人們，也許每個人都只是從他們的人那裡購買，他們不需要合法的？只是想了解為什麼我們會遭遇這三場失敗而一連串的勝利？

Sure. Well, let me chop it up a little. If you look at the Dakotas, North and South Dakota, that's always been a challenge. And we've had such tremendous momentum in the last 10 years starting with the West Coast, starting with Colorado.

當然。好吧，讓我把它切碎一點。如果你看看達科他州、北達科他州和南達科他州，你會發現這一直是個挑戰。從西海岸到科羅拉多州，我們在過去十年中取得了巨大的發展勢頭。

And those you might call it a low-hanging fruit. Now, that we get to this part of the 50 states, now it's getting challenging. The Dakotas, it's always going to be a challenge, Nebraska passed the medical. There might be a legal challenge, but that's a positive. But obviously, the big issue in Florida. Florida got 56% approval, and there was a ton of opposition money spent and Governor DeSantis got very aggressive. So that was always going to be a challenge to hit the 60%.

您可能會稱其為唾手可得的果實。現在，我們到達了 50 個州中的這一部分，現在變得越來越具有挑戰性。達科他州，這永遠是一個挑戰，內布拉斯加州通過了體檢。可能會遇到法律挑戰，但這是正面的。但顯然，這是佛羅裡達州的大問題。佛羅裡達州獲得了 56% 的支持，反對派投入了大量資金，州長德桑蒂斯變得非常激進。因此，達到 60% 始終是個挑戰。

But while I think a lot of us in the industry are disappointed, by no means are we out in Florida. I think it's a learning lesson, and I expect to see it again in two years on the ballot. And I would not look at that as a type of a momentum killer, if that's your question. I just think that, as I mentioned, the battles get a little tougher now because the states that were easier to get to have already been there and are performing beautifully for the most part and generating a lot of tax revenue and jobs for the public.

雖然我認為業內很多人都感到失望，但我們絕對不是在佛羅裡達州。我認為這是一個教訓，我希望兩年後在選票上再次看到它。如果這是你的問題，我不會將其視為一種動力殺手。我只是認為，正如我所提到的，現在的戰鬥變得更加艱難，因為那些更容易到達的州已經在那裡，並且在很大程度上表現良好，並為公眾創造了大量的稅收和就業機會。

Overall, we continue to see cannabis is really becoming increasingly a bipartisan issue. And we're very encouraged about the election. We're very happy to see Donald Trump as President with regard to cannabis. We think that's a very good development.

總體而言，我們繼續看到大麻確實越來越成為兩黨共同關注的問題。我們對這次選舉感到非常鼓舞。我們很高興看到唐納德·特朗普就大麻問題擔任總統。我們認為這是一個非常好的發展。

He's obviously on record supporting the rescheduling. We support safe banking, and he looks at cannabis as a state's rights issue. We expect that to continue. We don't see no reason for them to change those positions. So we're very excited about what could happen in the next term at the federal level.

他顯然支持重新安排時間。我們支持安全銀行業務，他將大麻視為州的配股。我們預計這種情況會持續下去。我們認為他們沒有理由改變這些立場。因此，我們對下個任期在聯邦層級可能發生的事情感到非常興奮。

We're very happy to see the Republican Senate. We think with Mitch McConnell's departure, we have new life in the Senate for safe banking. And we think that if the house remains in Republican control, that does increase chances for safe banking, as well as rescheduling.

我們很高興看到共和黨參議院。我們認為，隨著米奇·麥康奈爾的離開，參議院的安全銀行業將獲得新生。我們認為，如果眾議院仍由共和黨控制，這確實會增加安全銀行業務以及重新安排時間的機會。

So kind of dovetailed into in the election results, but I knew you were going to ask a question about that so I got ahead of you. We're very happy with the election results and what it means for the industry.

這與選舉結果吻合，但我知道你會問這個問題，所以我先於你。我們對選舉結果及其對該產業的意義感到非常滿意。

Paul, as always, thank you.

保羅，一如既往，謝謝你。

All right, thanks, Alex.

好的，謝謝，亞歷克斯。

This concludes our question-and-answer session. I would like to turn the conference back over to Alan Gold for any closing remarks.

我們的問答環節到此結束。我想將會議轉回艾倫·戈爾德（Alan Gold）發表閉幕詞。

Well, thank you, and thank you all for joining. I know there was a lot of activity in the quarter, and I really want to thank the team for their very strong and great work, and thank the shareholders for their continued support. With that, we can finish the call. Thank you.

好的，謝謝大家，也謝謝大家的加入。我知道本季有很多活動，我真的要感謝團隊的出色工作，並感謝股東的持續支持。這樣，我們就可以完成通話了。謝謝。

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

會議現已結束。感謝您參加今天的演講。您現在可以斷開連線。