Item 1.01 Entry into a Material Definitive Agreement
On September 1, 2021, a wholly-owned subsidiary of Goodness Growth Holdings,
Inc. (the "Company") entered into a Purchase and Sale Agreement with IIP-NY 2
LLC ("IIP") pursuant to which the parties agreed that the Company would exercise
its previously announced option to purchase 92.3 acres (the "Property") adjacent
to its existing cannabis cultivation facility in Johnstown, New York and
simultaneously enter into a sale-leaseback transaction for the Property (the
"Sale-Leaseback") with IIP. On September 24, 2021 (the "Closing Date"), the
parties closed the Sale-Leaseback. The purchase price for the Property was
approximately $1.2 million, excluding transaction costs. In connection with the
Sale-Leaseback, on the Closing Date the Company and IIP entered into an
amendment of their existing lease agreement (the "Lease Amendment") for the
Johnstown cultivation property to add the Property. Under the Lease Amendment,
IIP agreed to provide tenant improvement reimbursement to the Company of
approximately $55 million for the construction of a new 324,000 square foot
cannabis cultivation, processing, and research and development facility on the
Property, approximately $9 million of which was reimbursed on the Closing Date.
The initial annualized base rent for the Property is 10.5% of the tenant
improvement budget plus the purchase price, for a term of twenty years. The
Lease Amendment contains a rent escalation clause that is triggered in 18 months
if the Company does not satisfy certain strategic benchmarks as specified in the
Lease Amendment, which would increase the annualized base rent by 1.5% of the
tenant improvement budget plus the purchase price. Base rent will be phased in
incrementally over the course of a 16-month period, and will be subject to
annual increases of 2.75%.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation Under an
Off-Balance Sheet Arrangement of a Registrant
The information set forth under Item 1.01 is incorporated herein by reference in
this Item 2.03.
Item 7.01. Regulation FD Disclosure
On September 28, 2021, the Company issued a press release announcing the
completion of the Sale-Leaseback, a copy of which is attached hereto as Exhibit
99.1 and incorporated by reference herein.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits.
Exhibit No. Description
99.1 Press Release of the Company, dated September 28, 2021
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
© Edgar Online, source Glimpses