Detroit-based Pleasantrees, an upcoming retail medical marijuana outlet of Emerald Growth Partners, has entered into a long-term lease with San Diego’s Innovative Industrial Partners to cultivate and process medical-use cannabis in 45,000 square feet of industrial space in Harrison, about 30 miles north of Mount Pleasant.
The California real estate company purchased the property for approximately $6.9 million.
Emerald Growth Partners is expected to complete tenant improvements for the building, for which Innovative Industrial Partners has agreed to provide reimbursement of up to approximately $3.1 million. Assuming full reimbursement for the tenant improvements, IIP’s total investment in the property will be approximately $10.0 million.
“The IIP team has been great to work with, providing us the efficient capital we need to complete the redevelopment of our facility in a seamless manner,” says Randall Buchman, founder and CEO of EGP. “We look forward to launching our operations and bringing our high-quality products and best-in-class service to patients throughout Michigan.”
EGP received pre-qualification status for full vertical integration by the Michigan Marijuana Regulatory Agency for four “Class C” cultivation licenses, one “Class A” cultivation license, one processor license, and 12 provisioning center licenses. The company has raised approximately $20 million from investors to date as it prepares to commence fully licensed operations in the state. Former Gov. Rick Snyder last year appointed Buchman to the state’s Marijuana Advisory Panel to represent cultivators.
“EGP is well-positioned for success, with its depth of industry experience and expected large-scale vertical integration, and we look forward to supporting EGP through the redevelopment of the Harrison facility and the launch of its Pleasantrees retail locations throughout the state,” says Paul Smithers, president and CEO of IIP.
Michigan legalized medical cannabis in 2008 and is one of the largest medical-use cannabis markets in the United States, including approximately 270,000 medical-use cannabis cardholders as of the end of 2017, according to ArcView Market Research (ArcView). Last year, Michigan voters approved a ballot initiative to legalize non-medical adult-use cannabis. ArcView projects that Michigan will be one of the top 10 regulated cannabis markets by 2022, with total regulated cannabis sales of $1.4 billion.