Are the Short Sellers Right About Innovative Industrial Properties?
Earlier this year, Blue Orca Capital released a scathing short-seller report about Innovative Industrial Properties (NYSE: IIPR), referring to the cannabis company as a "marijuana bank" as opposed to the retail estate investment trust (REIT) that it supposedly is. Although many of the items were difficult to prove, as they focused on tenants that are privately held, there's been a recent development that suggests perhaps the report was right about one thing.
Innovative Industrial Properties (IIP) reported that one of its tenants, Kings Garden, had defaulted on both its rent and property management fees for the month on July 13. IIP has leases with Kings Garden for six properties, and the total default is worth $2.2 million. IIP has stated that it is in discussions with the tenant, but also that it is looking to potentially re-lease the properties to other marijuana companies.
Among the things Blue Orca Capital pointed to in its report was that Kings Gardens has been involved in multiple lawsuits, one involving falsifying records. The report ultimately suggested that Kings Garden was a high-risk tenant. It also warned about another key tenant, Parallel. However, there hasn't been any news thus far to suggest that IIP is having difficulty with collecting Parallel's rent payments.
Source Fool.com
