Executive Summary

Q1 2025 revenue of $71.7M beat Wall Street consensus ($70.1M), but diluted EPS of $1.03 missed ($1.17); sequentially, revenue fell 6.5% and AFFO/share declined to $1.94, driven by tenant defaults and an impairment charge, partially offset by contractual escalators and new leases . EPS and revenue estimates from S&P Global: Primary EPS Consensus Mean $1.168*, Revenue Consensus Mean $70.127M*.
Management advanced its tenant “refresh” initiative: declared defaults (4Front, Gold Flora, TILT; plus a $16.1M loan default), re-leased 205k sf in Michigan to Berry Green, and applied $5.8M of security deposits to rent in Q1; CFO flagged ~$0.20/share benefit from deposits that will not recur, a near-term headwind .
Capital actions and balance sheet remain conservative: $220.8M total liquidity, 11% debt-to-gross assets, DSCR ~16.8x; YTD repurchased $20.1M of common stock and retired $8.8M of notes; issued ~$10M preferred equity .
Dividend maintained at $1.90/share for Q1; re-tenanting progress and strong liquidity are key stock reaction catalysts, while deposit exhaustion and legal resolution timing temper near-term earnings visibility .

What Went Well and What Went Wrong

What Went Well

Rapid re-tenanting: 205k sf in Warren, MI leased to Berry Green and 22k sf MD acquisition with a long-term lease; 211k sf leased YTD . “We delivered these results while navigating a turbulent market environment and advancing the strategic initiative…to strengthen our tenant credit profiles and optimize occupancy” .
Strong balance sheet and disciplined capital allocation: ~$220M liquidity, 11% debt/gross assets; repurchased $20.1M of stock at $54.09 avg and retired $8.8M notes at a discount; issued ~$10M preferred equity . “Net debt-to-EBITDA of less than 1x…positions us well for long-term value creation” .
Portfolio demand: management cited continued interest from efficient operators even in challenged markets (MI, MA, CA), supporting the re-tenanting plan over 18–36 months .

What Went Wrong

Tenant defaults and revenue pressure: declared defaults for 4Front, Gold Flora, and TILT; contractual amounts owed totaled $9.0M, $1.7M, and $2.4M respectively as of March 28, plus $16.1M loan default; Q1 revenue declined ~5% YoY and 6.5% QoQ .
Non-recurring rent support and impairment: $5.8M security deposits applied to rent (many now exhausted), and a $3.5M impairment tied to an expected Palm Springs sale, depressing EPS and signaling near-term revenue headwinds .
EPS miss vs consensus despite revenue beat: operational headwinds (defaults, higher property/G&A, impairment) outweighed rental escalators and re-tenanting offsets . EPS actual $1.03 vs $1.168*, Revenue actual $71.7M vs $70.1M*.

Financial Results

Metric	Q1 2024	Q4 2024	Q1 2025
Revenue ($USD Millions)	$75.5	$76.7	$71.7
Diluted EPS ($)	$1.36	$1.36	$1.03
Net Income Attrib. to Common ($USD Millions)	$39.1	$39.5	$30.3
Net Income Margin (%)	51.8%	51.4%	42.3%
Normalized FFO per share – diluted ($)	$1.98	$2.03	$1.84
AFFO per share – diluted ($)	$2.21	$2.22	$1.94
Dividend per share ($)	$1.90	$1.90	$1.90

Vs. Estimates (Wall Street consensus, S&P Global):

Metric	Estimate	Actual	Surprise
Revenue ($USD Millions)	$70.127*	$71.722	+$1.595M (beat)
Primary EPS ($)	$1.168*	$1.03	-$0.138 (miss)

Values retrieved from S&P Global. Estimates marked with *.

Key drivers:

YoY: -$3.7M revenue (primarily PharmaCann/TILT defaults, asset dispositions), partially offset by new leases and escalators .
QoQ: -6.5% revenue; AFFO/share down 13% sequentially; security deposit benefit in Q4 and Q1 will not recur in Q2+ .
Non-GAAP: $3.5M impairment reduced GAAP EPS; AFFO adjustments include interest on seller-financed note ($0.153M) and deferred payments .

Segment breakdown: Not applicable; IIPR is a single-portfolio triple-net REIT; revenue is primarily rental income (incl. tenant reimbursements) .

KPIs and Portfolio

KPI	Q4 2024	Q1 2025
Properties (count)	109	110
Total RSF (millions)	9.0	9.0
Operating Properties (count/RSF)	106 / 8.5M	107 / 8.6M
Under Dev./Redevelopment (RSF)	491k	491k
Liquidity ($USD Millions)	$238.7	$220.8
Debt / Gross Assets (%)	11%	11%
Debt Service Coverage Ratio (x)	16.8x	16.8x

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue/EPS Guidance	FY/Q2+	Not provided	Not provided	Maintained (no formal guidance)
Dividend per share	Q4 2024 → Q1 2025	$1.90/share	$1.90/share	Maintained
Liquidity / Leverage	Ongoing	Conservative (11% debt/gross assets, robust DSCR)	Conservative (11% debt/gross assets, DSCR ~16.8x)	Maintained

Note: IIPR does not issue formal revenue/EPS guidance; dividend declared quarterly.

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 2024)	Previous Mentions (Q4 2024)	Current Period (Q1 2025)	Trend
Tenant credit/refresh	Security deposits applied; re-leasing progress noted	PharmaCann resolution; monitoring tenant maturities; deposit usage $5.7M	Defaults (4Front, Gold Flora, TILT); $5.8M deposits applied and exhausted; legal remedies/evictions underway	Intensifying remediation; re-tenanting progressing
Leasing demand	Portfolio ~95.7% leased; Maryland acquisition; development progress	New Pittsburgh lease; pipeline and selective deployment	211k sf leased YTD; Berry Green 205k sf; non-cannabis Palm Springs lease	Stable/positive demand
Capital allocation	Preferred issuance; credit facility upsized post-Q3	Revolver expanded; >$235M liquidity	$20.1M buyback, $8.8M notes repurchased, ~$10M preferred issued; ~$220.8M liquidity	Active, disciplined
Regulatory/legal	—	Optimistic on state growth; watch federal rescheduling/Safe Banking	STATES 2.0, DEA leadership focus; state-level adult-use momentum (PA, FL, MN)	Incremental progress; uncertainty persists
Macro/tariffs/supply chain	—	—	Management cited tariff uncertainty weighing on planning; packaging input risks	Macro headwind acknowledged
Operations transition (MSA)	—	—	Uses MSAs to bridge possession-to-new-tenant transitions while remaining non-plant-touching	Established playbook

Management Commentary

“We are uniquely positioned with our strong balance sheet and liquidity to manage through the ongoing uncertainty… and continued challenges in the regulated cannabis market.”
“We issued default notices for non-paying tenants and are aggressively pursuing all legal remedies… with a focus on protecting shareholder value.”
“Net debt-to-EBITDA of less than 1x, debt to gross assets 11% and a debt service coverage ratio of nearly 17x… positions us well for long-term value creation.”
“We’re encouraged by the demand we are seeing for our assets across markets and the leasing progress… while sourcing attractive new investment opportunities… on a selective disciplined basis.”

Q&A Highlights

Re-tenanting speed/capability: Berry Green lease on former PharmaCann MI facility executed quickly; more transitions expected over 18–36 months .
Deposit mechanics and forward headwind: $5.8M deposits applied; deposits for PharmaCann, 4Front, TILT exhausted; ~$0.20/share benefit in Q1 that will not recur; ~$4.5M cash collected from defaulting tenants in Q1 .
Transition process while non-plant-touching: Uses MSAs to maintain operations during license transfer, staying compliant as an NYSE-listed non-plant-touching REIT .
Liquidity deployment: Evaluating selective accretive investments within cannabis (including financial-side, real-estate-related income) over next 3–6 months .
Regulatory cadence: Monitoring STATES 2.0 and DEA rescheduling review; state-level legalization momentum in PA, FL, MN supportive but timeline uncertain .

Estimates Context

Q1 2025: Revenue $71.7M vs $70.1M* consensus → bold beat; EPS $1.03 vs $1.17* consensus → bold miss .
Estimate dispersion: 6 revenue estimates, 5 EPS estimates*, suggesting moderate coverage.
Near-term estimate revisions likely lower on EPS given deposit exhaustion (~$0.20/share headwind) and ongoing legal/receivership timing; revenue trajectory tied to re-tenanting commencements and approvals .