Treehouse Real Estate Investment Trust Inc., a private REIT that invests in properties utilized by the cannabis industry, has purchased two properties from MedMen Enterprises Inc. for a total purchase price of approximately $33.5 million. The properties include a retail storefront development located on Highland Drive in Las Vegas, Nevada; and a 45,000-square-foot Dutch greenhouse in Desert Hot Springs, California.
Treehouse was formed as a collaboration between MedMen, a private equity-backed medical marijuana dispensary, and Stable Road Capital, a California-based investment firm. Treehouse announced earlier this year that it had raised $133 million in investor equity to acquire properties from MedMen along with other cannabis real estate.
“We are excited to announce another set of transactions for Treehouse,” said Brian Kabot, Stable Road Capital chief investment officer and Treehouse board member. “We’re very pleased to strengthen our relationship with MedMen as a tenant and develop their future flagship retail store near the Las Vegas Strip.”
The Las Vegas property is located on Highland Drive near the Las Vegas Strip. The 10,400-square-foot store is scheduled to open later this year and will be MedMen’s largest store to date. Nevada legalized adult-use cannabis sales in 2017 and revenue for 2019 are projected to exceed $600 million, according to Cowen, Inc. MedMen currently operates three stores in Las Vegas.
The Desert Hot Springs property is comprised of a Dutch greenhouse with climate control and includes manufacturing and production capabilities. The facility recently received its certificate of occupancy and is expected to commence producing the MedMen’s in-house brands later this year.
Headquartered in Los Angeles, Treehouse Real Estate Investment Trust is a newly-organized real estate investment company focused on the acquisition, ownership and management of retail and industrial properties leased to state-licensed operators for their regulated adult-use and medical-use cannabis facilities. Treehouse has a management contract with MedMen to oversee day-to-day operations until Treehouse goes public, at which point management will be internalized.