IIPR

• Leasing & Cannabis Portfolio Activity

  • Year-to-date 2026, the company completed new leases for 389,000 square feet across 5 cannabis properties in California, Illinois, and Ohio, with an additional 488,000 square feet of preliminary agreements for 4 assets previously leased to Forefront Ventures (still subject to regulatory and licensing approvals)
  • The company expects to regain possession of two 593,000 square foot Florida properties previously leased to Parallel, and notes strong underlying market fundamentals in Florida (the largest U.S. medical cannabis market) with growing tenant interest already observed
  • Average total leasing costs for the ~877,000 square feet of YTD 2026 leasing activity are estimated to be less than $5 per square foot, indicating capital-efficient retenanting
  • The company continues active re-leasing efforts to improve occupancy, stabilize assets, and maximize value across its cannabis portfolio

• Dispositions & Capital Recycling

  • Closed an $88.5 million sale of a 389,000 square foot New York facility to tenant Vireo Growth via tenant purchase option, receiving a $39 million down payment and providing $49 million in seller financing at 15% interest
  • Closed the sale of an undeveloped land site in San Marcos, Texas, and is under contract to sell two additional retail properties in Michigan and California (pending customary closing conditions)
  • Dispositions align with the company's strategy to opportunistically monetize non-core assets and recycle capital into higher-accretive opportunities

• Balance Sheet & Financing

  • Proactively addressed the $291 million May 2026 senior debt maturity, completing $150 million in secured term loan financings and raising $35 million via common stock ATM program and $21 million via preferred stock ATM program to enable full repayment, eliminating the maturity
  • Successfully executed an upsized $402.5 million exchangeable notes offering due 2029 at a 6% interest rate, demonstrating strong investor demand; used part of proceeds to repurchase $80.5 million of common stock and repay revolving credit borrowings
  • Ended Q2 with $300 million in total liquidity (cash + revolving credit availability), strong credit metrics: net debt to adjusted EBITDA of 1.7x, net debt to total gross assets of 14%

• Life Science Diversification

  • Fully funded the remaining $120 million of the company's $270 million total commitment to IQHQ, a life science real estate platform
  • IQHQ has secured 372,000 square feet of gross leasing across two key assets (a 128,000 square foot lease with Advance Cell and a 244,000 square foot lease with Lila Sciences) since the company's initial investment
  • Encouraging improving industry fundamentals: Q1 2026 U.S. life science leasing activity above 2025 quarterly averages, venture capital funding up 12% YoY to $7.4 billion (highest four-quarter total since 2022), biotech R&D employment at record levels, new development pipeline down 85% from 2023 peak with 72% of remaining new supply pre-leased

• Regulatory Progress

  • The DEA completed its hearing on the proposed rescheduling of cannabis from Schedule 1 to Schedule 3; the matter now moves to an Administrative Law Judge for a recommended decision before final DEA action
  • Multiple large U.S. cannabis operators (led by Trulieve, the first to list on the NYSE) have taken steps toward listing on major U.S. exchanges, which is expected to expand the industry's institutional capital access

Management did not provide specific numerical financial guidance for full-year 2026 or future periods. The company maintains a strategic outlook of continued selective, accretive capital deployment, progress on portfolio diversification into life sciences, and stabilization of the legacy cannabis portfolio through active re-leasing. Management expects benefits from federal cannabis rescheduling (if completed) to drive improvements in the cannabis industry and the company's portfolio throughout 2026 and into 2027 and beyond, and expects to convert ongoing preliminary leasing discussions into executed leases through the remainder of 2026 and 2027.

The company operates two core business segments: legacy cannabis real estate and life science investments. No explicit separate segment financials are provided for the quarter; aggregate total revenue for Q2 2026 was $63.3 million, down from $69 million in Q1 2026, with the decrease driven by reduced payments from defaulted cannabis tenants, partially offset by contractual rent escalations and incremental revenue from new leasing activity. Adjusted funds from operations (AFFO) for Q2 2026 was $53 million, or $1.83 per diluted share, compared to $53.4 million ($1.88 per diluted share) in Q1 2026, with the decrease also attributable to reduced payments from default cannabis tenants. The life science segment currently consists of a $270 million fully funded commitment to IQHQ, which has generated a yield of over 14% for the company.

• Forward-looking statements (including regarding pending lease transactions, regulatory outcomes, and future investment performance) are subject to risks and uncertainties that could cause actual results to differ materially, as detailed in the company's recent SEC filings (Forms 10-K and 10-Q)
  • Pending lease agreements (including those for Forefront Ventures assets and assets under LOI) are subject to customary due diligence, licensing, and regulatory approvals, and there is no assurance these will result in completed, binding leases
  • Federal cannabis rescheduling timing is uncertain, and progress and expected industry benefits may take longer than anticipated to materialize
  • The company's legacy cannabis portfolio remains exposed to tenant default risk, though management notes the portfolio has strengthened and defaults are actively monitored and managed

Q: With the company's increased post-transaction liquidity, how does management plan to deploy capital across the legacy cannabis and life science segments, and are deployments expected to be large or small in size? / A: Management confirmed the company's ongoing diversification strategy into life sciences, where the completed $270 million IQHQ investment is generating a yield above 14% and remains highly accretive. Large-scale (chunky) transactions are typical for life science investments, while the company also continues to pursue improvements in the improving legacy cannabis portfolio alongside its diversification efforts.

Q: How does management view the current risk profile and position of the legacy cannabis portfolio following the Parallel possession recovery and recent industry improvements including cannabis rescheduling progress? / A: Management noted the Parallel default process was multiyear, and the company now holds two high-quality assets in Florida, a strong cannabis market that has already generated significant tenant interest. Management monitors all tenants regularly, believes the broader cannabis industry continues to improve, and expects rescheduling progress will drive further portfolio strengthening through 2026 and into 2027.

Q: Why did the company sell the undeveloped San Marcos, Texas land even as Texas launched its medical cannabis program, and does this reflect a changed outlook on the Texas market? / A: Management explained nothing changed about its positive outlook on the Texas cannabis market. The site was undeveloped, and cannabis-specific improvements were never completed, meaning development and approval would have required an extended timeline. Management opted to recycle the capital into immediately accretive opportunities like the IQHQ commitment rather than wait for long-term development.

Q: How have changing cannabis regulations impacted the relative cost of capital improvements for the company versus its cannabis tenants? / A: Management expects both the company and its tenants will see improved cost of capital from regulatory changes. For tenants, major exchange listings will open expanded access to institutional public capital, which improves their credit quality as the company's tenants. For the company, diversification into non-cannabis life science has already improved lender sentiment, and cannabis rescheduling will further improve access to and cost of capital for the company's cannabis-related activities.