Innovative Industrial Properties, Inc.

Good day and welcome to the Innovative Industrial Properties, Inc. Second Quarter 2023 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then 1 on a touch-tone phone. To withdraw your question, please press star, then 2. Please note this event is being recorded. I would now like to turn the conference over to Brian Wolfe, General Counsel. Please go ahead, Mr. Wolfe.

Thank you for joining the call. Presenting today are Alan Gold, Executive Chairman, Paul Smithers, President and Chief Executive Officer, David Smith, Chief Financial Officer, Catherine Hastings, Chief Operating Officer, and Ben Regan, Chief Investment Officer. Before we begin, I'd like to remind everyone that statements made during today's conference call may be deemed forward-looking statements within the meaning of the safe harbor of the Private Securities Litigation Reform Act of 1995, and actual results may differ materially due to a variety of risks, uncertainties, and other factors. Please refer to the documents filed by the company with the SEC Specifically, the most recent reports on Forms 10-K and 10-Q, which identify important risk factors that could cause actual results to differ from those contained in the forward-looking statements. We are not obligated to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. In addition, on today's call, we will discuss certain non-GAAP financial information, such as FFO, normalized FFO, and adjusted FFO. You can find this information together with reconciliations to the most directly comparable GAAP financial measure in our earnings release issued yesterday as well as in our 8-K filed with the SEC. I'll now hand the call over to Alan. Alan?

Thank you, Brian, and welcome, everyone. We are pleased to report another solid quarter of operations and financial results. We believe we have positioned ourselves well in this context with one of the strongest and most experienced teams of real estate professionals in the cannabis industry, a high-quality portfolio, and arguably a conservative and flexible balance sheet with a 12% debt to total gross assets, no variable rate debt, and no meaningful debt maturities until 2026. To recap the quarter, we generated total revenues of $76 million in Q2 and adjusted funds from operations of $64 million. Rent collection for IIP's operating portfolio was 97% for the quarter. That financial performance continued to drive dividend returns to our investors, with $7.20 of dividends declared per share in the past 12 months alone, an increase of 11% over the prior 12-month period. This quarter was a quiet one for us in terms of additional acquisitions and investment activity, and as we've noted for several quarters, we expected a significantly lower pace of investment activity, given the significant adjustments to cost of capital since the Fed began aggressively raising rates last year. That said, we are pleased to announce the pre-leasing of a project under construction in Cathedral City, California, which was one of the projects that we took back from King's Garden late last year. Ben will provide more detail on that project and the status of leasing for other projects in our portfolio. We continue to strive, as we have from the very beginning, to be as transparent and detailed as we can about our business and prospects, especially in the context of ongoing challenges in the macroeconomy that we are all experiencing and in the regulated cannabis industry in particular, which we have noted in the past several calls. We also want to note the green shoots that we are seeing in the industry with the ongoing potential for passage of the SAFE Banking Act, state-level momentum for additional programs and tax relief, and unit price stabilization trends we are seeing in certain markets, which Paul will spend more time discussing. While the vast majority of our tenant base continues to perform as we have previously discussed, our tenants parallel and Green Peak are experiencing difficulties and defaulted on their obligation to pay rent for certain properties. Paul will provide an update on the status of those situations, and as always, we are here to answer your questions to the extent we can. I will now turn the call over to Paul to discuss licensing and industry dynamics. Paul?