CALIFORNIA: MedMen Enterprises announced that it has reached agreement to sell a significant portion of its real estate assets to the newly formed Treehouse Real Estate Investment Trust (“Treehouse”). Treehouse is a real estate investment vehicle that capitalizes on the cannabis industry’s continued growth; initial investors include real estate firms New England Development, Samuels & Associates and Visconsi Companies, in partnership with Stable Road Capital.
The initial transaction includes three properties and is expected to generate approximately $12.5 million of proceeds to the Company after repayment of debt. Additional real estate assets in MedMen’s portfolio are expected to be sold to Treehouse over the next 12 months. The properties sold to Treehouse will be leased backed to MedMen or its subsidiaries at market rates under long-term leases.
“MedMen owns and controls some of the best real estate in today’s burgeoning cannabis industry and they will serve as an important seed portfolio for Treehouse,” said Brian Kabot, chief investment officer of Stable Road. “Given the investor interest in the sector, this vehicle made a lot of sense. More importantly, this creates liquidity and creates an efficient form of off-balance sheet financing to foster further growth for MedMen and others in the industry who wish to grow.”
“Thoughtful property owners across the country have begun to consider the role that cannabis retailers play in their overall leasing strategy, putting Treehouse at the vanguard of an emerging business opportunity,” commented Scott Baker of New England Development. “Many cannabis operators own prime parcels in highly sought after communities, offering a variety of opportunities for return on investment and future development.”
The three initial properties included in the transaction are:
- MedMen Abbot Kinney – the only cannabis store in what GQ calls the “Coolest Block in America,” 1308-1312 Abbot Kinney Blvd., Venice, California.
- MedMen Beverly Hills – the store is in a bustling shopping district adjacent to the city of Beverly Hills, 106-110 S. Robertson Blvd., Los Angeles, California.
- MedMen Downtown Las Vegas – the Company’s first branded store in Las Vegas in the heart of the city’s Arts District and near the Fremont Street Experience, 823 S. 3rd Street, Las Vegas, Nevada.