Innovative Industrial Properties, Inc.

Investigation
04/14/2022

Initial Lawsuit
04/25/2022

Lawsuit Progression
06/24/2022

Investigation

Continous Holding
May 7, 2020 to April 13, 2022
Proposed Claim
Securities Violation

Investors investigation focused on Blue Orca Capital’s short report alleging that the company is “a high-risk cannabis bank, providing de facto loans to cannabis companies in exchange for long term leases.”

Main Event

"marijuana bank masquerading as a REIT"

04/14/2022

Research Report (Short)

Blue Orca Capital releases a report on Innovative Industrial Properties describing the company as “a marijuana bank masquerading as a REIT.” The report details the company’s largest tenant in default on debt and accused of being a Ponzi scheme, its second largest tenant accused of fraud between founders and its listed tenants struggling with their fallings share prices and cash flows.

“In exchange for overpaying for properties from cannabis companies and funding the tenant improvements to build out the facilities, IIPR receives repayment of the loan in the form of long-term lease agreements at 11–14% yields. In effect, IIPR is less of a traditional REIT, and more of a marijuana bank, lending to cannabis companies who otherwise would not have access to the banking system to grow their businesses“

The stock impact compares the closing price immediately preceding the date of the event and the following closing price. The price difference also reflects the overall mix of information.

Stock Impact

Close	Previous close	Price variation	Percentage variation
$169.68	$183.44	$-13.76	-7.5%

See more on Factual Timeline

Initial Lawsuit

First Complaint - 04/25/2022

This is a class action on behalf of persons or entities who purchased or otherwise acquired publicly traded Innovative Industrial Properties securities between May 7, 2020 and April 13, 2022, inclusive.

Filing Date
04/25/2022
Class Period
05/07/2020 to 04/13/2022
Transgression
Securities Violation
Filing Firms
The Rosen Law Firm, P.A.
Case Title
MALLOZZI v. INNOVATIVE INDUSTRIAL PROPERTIES, INC. et al
Docket Number
2:22-cv-02359
Court
New Jersey District Court
Free File
Complaint

Allegations

According to the complaint, defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the company’s business, operations, and prospects. Specifically, defendants allegedly failed to disclose to investors:

(1) that Innovative Industrial Properties’ focus is to be a cannabis company lender rather than a real estate investment trust (REIT);
(2) that the true values of Innovative Industrial Properties’ properties are significantly lower than Innovative Industrial Properties represents;
(3) existential issues in its top customers;
(4) that as a result, its top customers may not be able to continue making payments to Innovative Industrial Properties and Innovative Industrial Properties would face significant issues replacing these customers; and
(5) that as a result, defendants’ statements about its business, operations, and prospects, were materially false and misleading and/or lacked a reasonable basis at all relevant times.