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)

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