NEW CANAAN, Conn. — NewLake Capital Partners, Inc., a leading provider of real estate capital to state-licensed cannabis operators, reported its financial results for the first quarter ended March 31, 2025.
“Our first quarter financial results underscore the consistency and resilience of our portfolio,” said Anthony Coniglio, NewLake’s President and Chief Executive Officer. “Rent collections were in line with expectations, and we delivered an 84% AFFO payout ratio. I’m proud of how our team continues to execute in a challenging industry landscape and a volatile macroeconomic environment. These consistent results reflect the benefits of the proactive steps we’ve taken in portfolio construction and disciplined risk management.”
First Quarter 2025 Financial and Operational Highlights
◦ Revenue totaled $13.2 million.
◦ Net income attributable to common stockholders totaled $6.3 million.
◦ Funds From Operations (“FFO”)(2) totaled $10.3 million.
◦ Adjusted Funds From Operations (“AFFO”)(2) totaled $10.7 million.
◦ Declared a first quarter dividend of $0.43 per common share, equivalent to an annualized dividend of $1.72 per common share.
◦ Collected approximately 98% of contractual rent during the quarter, inclusive of applying the remaining escrow deposit and security deposit of one tenant as described below.
Balance Sheet Highlights as of March 31, 2025
◦ Cash and cash equivalents as of March 31, 2025, were $19.9 million, with $11.7 million committed to fund future improvements.
◦ Total liquidity of $102.3 million, consisting of cash and cash equivalents and availability under the Company’s revolving credit facility.
◦ Gross real estate assets of $431.7 million.
◦ 1.6% debt to total gross assets and a debt service coverage ratio of approximately 113x.
◦ No debt maturity until May 2027.
Comparison to the first quarter ended March 31, 2024
◦ Revenue totaled $13.2 million, as compared to $12.6 million, an increase of approximately 4.8% year-over-year.
◦ Net income attributable to common stockholders totaled $6.3 million, as compared to $6.9 million.
◦ FFO totaled $10.3 million, as compared to $10.6 million, a decrease of 2.6% year-over-year.
◦ AFFO totaled $10.7 million, as compared to $11.0 million, a decrease of 2.2% year-over-year.
◦ For the first quarter ended March 31, 2025, the Company declared a dividend of $0.43 per common share, an increase of approximately 4.9% compared to the first quarter ended March 31, 2024.
Condition of Tenants
During the fourth quarter of 2023, the Company amended our leases with: a) Revolutionary Clinics as part of a restructuring of their business, the receipt of new third-party capital and new management, and b) Calypso in connection with their sale to Canvas Acquisition Corporation. Both tenants began experiencing operating challenges in the second half of 2024, impacting their ability to pay rent as described below. The Company has reserved all rights under the lease agreements.
Revolutionary Clinics
From June 2024 through March 2025, Revolutionary Clinics paid approximately 50% of its contractual rent. On December 13, 2024, Revolutionary Clinics entered into receivership. In the first quarter of 2025, the Company entered into a stipulation agreement with the court appointed receiver to receive 50% of contractual rent paid weekly, along with weekly payments for the reimbursement of certain delinquent real estate taxes and utilities that were paid by the Company. The receiver is working to either liquidate or sell the tenant’s business. The Company has hired a broker to help lease the property. The Company has reserved all of its rights under the lease agreement.
Calypso Enterprises
At December 31, 2024, the Company held the remaining escrow and security deposits of approximately $490 thousand, which were applied to satisfy contractual rent due for January 2025 and a portion of February 2025. At March 31, 2025 there were no remaining escrow or security deposits. In connection with a financial restructuring of Calypso to raise new third-party capital, the Company received the remaining outstanding rent for the first quarter of 2025. This payment received during the first quarter covered the remaining portion of February and March contractual rent, resulting in the collection of all rent due for the three months ended March 31, 2025.
Financing Activity
Revolving Credit Facility
As of March 31, 2025, the Company had approximately $7.6 million in borrowings under the Revolving Credit Facility and $82.4 million in funds available to be drawn, subject to sufficient collateral in the borrowing base. The facility bears interest at a fixed rate of 5.65% through May 5, 2025 and thereafter a variable rate based upon the greater of (a) the Prime Rate quoted in the Wall Street Journal (Western Edition) (“Base Rate”) plus an applicable margin of 1.0% or (b) 4.75%.
The facility is subject to certain liquidity and operating covenants and includes customary representations and warranties, affirmative and negative covenants, and events of default.
As of March 31, 2025, the Company was in compliance with the financial covenants under the agreement.
At the Market Equity Program
As of March 31, 2025, the Company has not issued any shares under the ATM Program.
Dividend
On March 4, 2025, the Company’s Board of Directors declared a first quarter 2025 cash dividend of $0.43 per share of common stock, equivalent to an annualized dividend of $1.72 per share of common stock. The dividend was paid on April 15, 2025, to stockholders of record at the close of business on March 31, 2025, and represents an AFFO payout ratio of 84%
About NewLake Capital Partners, Inc.
NewLake Capital Partners, Inc. is an internally-managed real estate investment trust (“REIT”) that provides real estate capital to state-licensed cannabis operators through sale-leaseback transactions and third-party purchases and funding for build-to-suit projects. NewLake owns a portfolio of 33 properties comprised of 15 cultivation facilities and 18 dispensaries that are leased to single tenants on a triple-net basis.
