Marijuana multistate operator 4Front Ventures entered into definitive agreements to finance the construction of a massive $51.5 million cultivation and processing facility in Illinois through a sale-leaseback arrangement.
The agreements call for San Diego-based Innovative Industrial Properties (IIP) to acquire the land for $6.5 million and fund the first phase of the approximately $45 million, 258,000-square-foot project, according to a news release.
Arizona-based 4Front has previously used sale-leaseback transactions to raise cash, pay down debt and bolster its financial position.
But this deal is focused on taking advantage of the booming, $1 billion-a-year recreational marijuana market in Illinois.
IIP will lease the cultivation and processing facility back to 4Front in the form of a 20-year lease with two, five-year extensions at 4Front’s option.
4Front said the transaction is subject to securing “appropriate” county and state incentives as well as other conditions.
The 258,000-square-foot first phase will include 65,000 square feet of canopy space and about 70,000 square feet for processing flower, edibles, concentrates and other products.
The new facility will generate more than 240 new jobs, according to the release.
4Front indicated that it hopes to eventually add 300,000 square feet to the facility to meet market demand.