Michigan municipal retirees funding state’s biggest pot operations

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Southwest of Lansing, in Dimondale, about 10,000 marijuana plants are expanding in a 25-acre, 57,000-square-foot develop property — the biggest in the state. These plants, grown by Green Peak Innovations to provide Michigan’s health-related marijuana dispensaries, hold a worth approaching $four million.

The results of Green Peak’s develop operation and the beneath-building 47,000-square-foot Harrison Township operation of Emerald Development Partners is supported by about 75,000 Michigan public staff, indirectly.

The Municipal Employee’s Retirement Program of Michigan, a statewide public employee retirement pension fund, is an investor in San Diego-primarily based Revolutionary Industrial Properties. IIP is a publicly traded marijuana-focused genuine estate investment trust. IIP owns dozens of properties across the U.S., leasing them to marijuana growers and retail operations.

At least 16 public pension funds have invested in REIT by way of the S&ampP 600 Smallcap Index, a move nearby marijuana executives see as offering legitimacy to the fledgling business.

“We’re of course significant believers in marijuana as a solution and we subscribe to the thesis that it really is a powerful investment and the development chance of the future,” stated Jim Radway, co-founder and CEO of Green Peak. “We feel lots of institutional investors are searching at or are currently in this space and it will continue to turn into much more exciting for them.”

MERS representatives declined to talk about the investment, only pointing out that it did not straight invest in the marijuana business.

“Revolutionary Industrial Properties is element of our S&ampP 600 Index, not an investment of our active portfolio,” stated Carrie Lombardo, chief strategic and external affairs officer for the pension fund. “MERS does not actively choose stocks for our index funds which are made to replicate the functionality of a broad index.”

To that point, MERS also holds about 25,000 shares in Richmond, Va.-primarily based Altria Group Inc., 1 of the biggest producers of tobacco items which includes the maker of Marlboro cigarettes Philip Morris USA.

As much more marijuana-connected firms turn public — a half-dozen launched initial public offerings currently this year — much more investments may well take place. But the unfavorable stigma toward the business remains an challenge, stated Radway. REITs like IIP supply investors an avenue to invest in the business without having straight investing in firms that develop or sell marijuana.

“There is nevertheless in this business a widespread reference to plant touching and non-plant touching,” Radway stated. “The much more regulated, much more conservative the investor that nevertheless desires to participate in the business gravitate toward non-touching solutions. But when investors get comfy, there is tremendous chance in the plant-touching side.”

MERS held two,910 shares of IIP as of June 30, valued at just more than $300,000. By contrast, Blackrock Inc., 1 of the biggest investment management firms in the planet, holds much more than 1.three million shares of IIP, valued at much more than $140 million.

IIP owns 24 properties totaling roughly 1.eight million square feet leased exclusively to state-licensed marijuana operators.

The REIT invested $13 million to create out Green Peak’s space in Dimondale and plans to invest up to a further $21 million to expand the space, Radway stated. IIP will break ground on the expansion in August, he stated.

Green Peak was prequalified by Michigan’s Marijuana Regulatory Agency for 12 Class-C develop licenses, enabling the corporation to develop up to 18,000 plants. The corporation plans to get to 15,000 at the Dimondale place with a further three,000 at a facility in Lansing. Green Peak will make much more than 20,000 pounds of marijuana flower annually and add capacity for oil, edibles and vape production with the expansion.

Emerald Development Partners’ Harrison Township operations — a 47,000-square-foot develop operation becoming constructed by IIP — is at present beneath building with an anticipated completion date in September.

Randall Buchman, CEO of Emerald Development and its dispensary operations Pleasantrees, was unaware of MERS’ stake in IIP, but known as it a secure bet.

“The (marijuana) business is not verified, but if you appear at it from a higher level, it really is just genuine estate, which is verified,” Buchman stated. “(IIP) are producing excellent choices on who they are deploying their dollars with, so it tends to make total sense they would obtain these types of investors.”

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