Treehouse Real Estate Investment Trust, Inc., a private REIT that invest in properties utilized by the cannabis industry, has completed its private placement of nearly 2.1 million shares of its common stock for total gross proceeds of approximately $45.5 million. The REIT also executed a term sheet with a federally-insured commercial bank for a debt facility.
Ladenburg Thalmann & Co. Inc., a subsidiary of Ladenburg Thalmann Financial Services Inc. (NYSE American: LTS), Compass Point Research & Trading LLC, and Northland Securities Inc. acted as the placement agents for the private placement.
“Treehouse is excited to announce another capital raise as well as executing a term sheet for a future debt facility from a federally-insured commercial bank,” said Brian Kabot, Stable Road Capital chief investment officer and Treehouse board member. “The additional proceeds we’ve received increases our capital base to continue executing cannabis-related real estate acquisitions in a scaled manner.”
He added, “Our debt facility term sheet is not only a big step for Treehouse, but a big step for the whole industry. We are witnessing federally-regulated lenders enter the cannabis industry and we couldn’t be more excited to be a part of it.”
In addition to the private placement, the REIT has signed a term sheet for a debt facility with a federally-insured commercial bank. The planned debt facility expects to carry a 6.1 percent interest rate over a five-year term and expects to provide accretive financing for Treehouse to efficiently manage its balance sheet.
Treehouse REIT intends to use the net proceeds from the private placement and debt facility to fund additional cannabis real estate acquisitions across the U.S., which is estimated to generate $80 billion in cannabis sales by 2030 according to Cowen Inc.
The company plans to continue buying real estate across several recreational and medical cannabis states, including Arizona, California, Florida, New York and Nevada, with a focus on retail-related properties.
Last week, Treehouse REIT 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.
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 was formed as a collaboration between MedMen, a private equity-backed medical marijuana dispensary, and Stable Road Capital, a California-based investment firm. The REIT has a management contract with MedMen to oversee day-to-day operations until Treehouse goes public, at which point management will be internalized.