INNOVATIVE INDUSTRIAL PROPERTIES INC 10-Q

ITEM 1. FINANCIAL STATEMENTS Innovative Industrial Properties, Inc. Consolidated Balance Sheets (Unaudited) ( In thousands , except share and per share amounts ) March 31, December 31, Assets 2026 2025 Real estate, at cost: Land $ 145,104 $ 146,320 Buildings and improvements 2,269,439 2,269,597 Construction in progress 40,311 40,593 Total real estate, at cost 2,454,854 2,456,510 Less accumulated depreciation ( 361,093 ) ( 343,062 ) Net real estate held for investment 2,093,761 2,113,448 Life science investments 153,980 152,665 Construction loan receivable 22,800 22,800 Cash and cash equivalents 89,117 47,597 In-place lease intangible assets, net 6,155 6,366 Other assets, net 28,167 27,982 Total assets $ 2,393,980 $ 2,370,858 Liabilities and stockholders’ equity Liabilities: Notes due 2026, net $ 290,981 $ 290,602 Revolving credit facilities 75,000 102,500 Building improvements and construction funding payable 851 2,964 Accounts payable and accrued expenses 14,702 10,870 Dividends payable 57,100 54,913 Rent received in advance and tenant security deposits 50,060 50,307 Other liabilities 10,746 10,698 Total liabilities 499,440 522,854 Commitments and contingencies (Notes 6, 7 and 12) Stockholders’ equity: Preferred stock, par value $ 0.001 per share, 50,000,000 shares authorized: 9.00 % Series A cumulative redeemable preferred stock, liquidation preference of $ 25.00 per share, 4,718,048 and 2,019,525 shares issued and outstanding at March 31, 2026 and December 31, 2025, respectively 108,081 47,780 Common stock, par value $ 0.001 per share, 50,000,000 shares authorized: 28,314,520 and 28,022,975 shares issued and outstanding at March 31, 2026 and December 31, 2025, respectively 28 28 Additional paid-in capital 2,123,710 2,113,184 Dividends in excess of earnings ( 337,279 ) ( 312,988 ) Total stockholders’ equity 1,894,540 1,848,004 Total liabilities and stockholders’ equity $ 2,393,980 $ 2,370,858 See the accompanying notes to the consolidated financial statements. 3 Table of Contents Innovative Industrial Properties, Inc. Consolidated Statements of Income (Unaudited) ( In thousands , except share and per share amounts ) For the Three Months Ended March 31, 2026 2025 Revenues: Rental (including tenant reimbursements) $ 68,920 $ 71,697 Other 76 25 Total revenues 68,996 71,722 Expenses: Property expenses 7,576 7,379 General and administrative expense 10,349 8,461 Depreciation and amortization expense 18,584 18,391 Impairment loss on real estate — 3,527 Total expenses 36,509 37,758 Gain (loss) on sale of real estate 422 — Income from operations 32,909 33,964 Interest and other income 6,331 1,613 Interest expense ( 6,431 ) ( 4,500 ) Net income 32,809 31,077 Preferred stock dividends ( 2,654 ) ( 781 ) Net income attributable to common stockholders $ 30,155 $ 30,296 Net income attributable to common stockholders per share (Note 9): Basic $ 1.04 $ 1.05 Diluted $ 1.02 $ 1.03 Weighted-average shares outstanding: Basic 27,991,910 28,275,549 Diluted 28,467,184 28,588,022 See accompanying notes to the consolidated financial statements. 4 Table of Contents Innovative Industrial Properties, Inc. Consolidated Statements of Stockholders’ Equity (Unaudited) ( In thousands , except share amounts ) Three Months Ended March 31, 2026 Series A Preferred Stock Common Stock Additional Paid-In- Capital Dividends in Excess of Earnings Total Stockholders’ Equity Shares Amount Shares Amount Balances at beginning of period 2,019,525 $ 47,780 28,022,975 $ 28 $ 2,113,184 $ ( 312,988 ) $ 1,848,004 Net income — — — — — 32,809 32,809 Issuance of unvested restricted stock, net of forfeitures — — 95,257 — ( 962 ) — ( 962 ) Issuance of preferred stock, net of issuance costs 2,698,523 60,301 — — — — 60,301 Issuance of common stock, net of issuance costs — — 178,655 — 9,281 — 9,281 Preferred stock dividends — — — — — ( 2,654 ) ( 2,654 ) Common stock dividends — — — — — ( 54,446 ) ( 54,446 ) Conversion of restricted stock units into common stock, net of forfeitures — — 17,633 — ( 377 ) — ( 377 ) Stock-based compensation — — — — 2,584 — 2,584 Balances at end of period 4,718,048 $ 108,081 28,314,520 $ 28 $ 2,123,710 $ ( 337,279 ) $ 1,894,540 Three Months Ended March 31, 2025 Series A Preferred Stock Common Stock Additional Paid-In- Capital Dividends in Excess of Earnings Total Stockholders’ Equity Shares Amount Shares Amount Balances at beginning of period 1,002,673 $ 23,632 28,331,833 $ 28 $ 2,124,113 $ ( 211,713 ) $ 1,936,060 Net income — — — — — 31,077 31,077 Issuance of unvested restricted stock, net of forfeitures — — 50,934 — ( 792 ) — ( 792 ) Issuance of preferred stock, net of issuance costs 385,147 9,186 — — — — 9,186 Repurchase of common stock — — ( 4,586 ) — ( 290 ) — ( 290 ) Preferred stock dividends — — — — — ( 781 ) ( 781 ) Common stock dividends — — — — — ( 54,463 ) ( 54,463 ) Forfeiture of unvested restricted stock units — — — — — 89 89 Stock-based compensation — — — — 2,078 — 2,078 Balances at end of period 1,387,820 $ 32,818 28,378,181 $ 28 $ 2,125,109 $ ( 235,791 ) $ 1,922,164 See accompanying notes to the consolidated financial statements. 5 Table of Contents Innovative Industrial Properties, Inc. Consolidated Statements of Cash Flows (Unaudited) ( In thousands ) For the Three Months Ended March 31, 2026 2025 Cash flows from operating activities Net income $ 32,809 $ 31,077 Adjustments to reconcile net income to net cash provided by (used in) operating activities Depreciation and amortization 18,584 18,391 Impairment loss on real estate — 3,527 Loss (gain) on sale of real estate ( 422 ) — Paid-in-kind dividends and interest income on life science investments ( 1,002 ) — Stock-based compensation 2,584 2,078 Amortization of debt discount and issuance costs 576 470 Other non-cash adjustments ( 300 ) ( 11 ) Changes in assets and liabilities Other assets, net ( 527 ) 906 Accounts payable, accrued expenses and other liabilities 3,976 1,577 Rent received in advance and tenant security deposits ( 247 ) ( 3,773 ) Net cash provided by (used in) operating activities 56,031 54,242 Cash flows from investing activities Investments in real estate — ( 7,857 ) Proceeds from sale of real estate asset 2,608 — Funding of draws for improvements and construction ( 2,949 ) ( 9,041 ) Purchases of short-term investments — ( 5,258 ) Maturities of short-term investments — 5,000 Net cash provided by (used in) investing activities ( 341 ) ( 17,156 ) Cash flows from financing activities Issuance of common stock, net of issuance costs 9,281 — Repurchase of common stock — ( 290 ) Issuance of preferred stock, net of issuance costs 60,301 9,186 Draws on revolving credit facilities 5,000 — Repayments on revolving credit facilities ( 32,500 ) — Principal payment on debt — ( 8,697 ) Dividends paid to common stockholders ( 53,777 ) ( 54,253 ) Dividends paid to preferred stockholders ( 1,136 ) ( 564 ) Taxes paid related to net share settlement of equity awards ( 1,339 ) ( 703 ) Net cash provided by (used in) financing activities ( 14,170 ) ( 55,321 ) Net increase (decrease) in cash and cash equivalents 41,520 ( 18,235 ) Cash and cash equivalents, beginning of period 47,597 146,245 Cash and cash equivalents, end of period $ 89,117 $ 128,010 Supplemental disclosure of cash flow information: Cash paid during the period for interest, net of interest capitalized $ 2,017 $ 81 Supplemental disclosure of non-cash investing and financing activities: Accrual for current-period additions to real estate $ 96 $ 6,093 Accrual for common and preferred stock dividends declared 57,100 55,244 See accompanying notes to the consolidated financial statements. 6 Table of Contents Innovative Industrial Properties, Inc. Notes to the Consolidated Financial Statements March 31, 2026 (Unaudited) 1. Organization As used herein, the terms “we”, “us”, “our” or the “Company” refer to Innovative Industrial Properties, Inc., a Maryland corporation, and any of our subsidiaries, including IIP Operating Partnership, LP, a Delaware limited partnership (our “Operating Partnership”). We are an internally-managed real estate investment trust (“REIT”) focused on the acquisition, ownership and management of specialized industrial properties and investments in the life science industry. Our properties are primarily leased to experienced, state-licensed operators for their regulated cannabis facilities. We have acquired and intend to continue to acquire our properties through sale-leaseback transactions and third-party purchases. We have leased and expect to continue to primarily lease our properties on a triple-net lease basis, where the tenant is responsible for all aspects of and costs related to the property and its operation during the lease term, including structural repairs, maintenance, real estate taxes and insurance. We were incorporated in Maryland on June 15, 2016. We conduct our business through a traditional umbrella partnership real estate investment trust, or UPREIT structure, in which our properties are owned by our Operating Partnership, directly or through subsidiaries. We are the sole general partner of our Operating Partnership and own, directly or through subsidiaries, 100% of the limited partnership interests in our Operating Partnership. 2. Summary of Significant Accounting Policies and Procedures and Recent Accounting Pronouncements Basis of Presentation. The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. They do not include all of the information and footnotes required by GAAP for complete financial statements. This interim financial information should be read in conjunction with the audited consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. Any references to square footage or occupancy percentage, and any amounts derived from these values in these notes to the consolidated financial statements, are outside the scope of our independent registered public accounting firm’s review. Management believes that all adjustments of a normal, recurring nature considered necessary for a fair statement have been included. This interim financial information does not necessarily represent or indicate what the operating results will be for the year ending December 31, 2026. Use of Estimates. The preparation of the consolidated financial statements in conformity with GAAP requires management to make a number of estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of revenues and expenses during the reporting period. Actual results may differ materially from these estimates and assumptions. The most significant estimates and assumptions made include determination of lease accounting and fair value of acquisition of real estate properties. Reclassification . Certain prior period amount has been reclassified to conform to current period presentation. The reclassification had no impact on previously reported net income attributable to common stockholders. Going Concern. Management is required under Accounting Standards Codification ("ASC") 205-40, Presentation of Financial Statements - Going Concern ("ASC 205-40") to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date the consolidated financial statements are issued. This evaluation includes an assessment of the Company's liquidity needs to satisfy upcoming debt obligations. 7 Table of Contents As of March 31, 2026, the outstanding principal balance on the Notes due 2026 (as defined in Note 8), which matures in May 2026, was $ 291.2 million. The Company currently does not have sufficient liquidity to satisfy this obligation at maturity. Management is actively evaluating alternatives to address the maturity of the Notes due 2026, which may include refinancing the existing indebtedness or raising additional capital combined with existing cash resources to retire the obligation. Although management believes that it is more likely than not that the Company will be able to address the maturity of the Notes due 2026, guidance issued under ASC 205-40 requires that management not conclude that such an outcome is "probable" if, among other factors, the outcome is not within control of the Company. Because there has not been a sufficient amount of capital raised to pay off the bonds as of the date of this filing, such outcomes are not solely within the control of the Company and therefore, management is unable to conclude that such an outcome is probable. Accordingly, management has concluded that there is substantial doubt about the Company’s ability to continue as a going concern within one year following the date of issuance of these consolidated financial statements. See Note 14 "Subsequent Events" for additional information regarding financing transactions that were closed after March 31, 2026. The failure to retire or refinance the Notes due 2026 could lead to an event of default, which would have a material adverse effect on the Company’s financial condition. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Significant Accounting Policies. The consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on February 24, 2026, contains a discussion of significant accounting policies. There have been no material changes to our significant accounting policies during the three months ended March 31, 2026. Concentration of Credit Risk. Real Estate Investments Tenant Concentration As of March 31, 2026, we owned 110 properties located in 19 states and leased to 38 tenants. The ability of any of our tenants to honor the terms of their leases is dependent upon the economic, regulatory, competition, natural and social factors affecting the community in which that tenant operates. The following tables set forth the five tenants in our portfolio that represented the largest percentage of our total rental revenues for the three months ended March 31, 2026 and 2025, including tenant reimbursements: For the Three Months Ended March 31, 2026 Percentage of Number of Rental Leases Revenue Ascend Wellness Holdings, Inc. ("Ascend") 4 12 % Green Thumb Industries, Inc. ("Green Thumb") 3 9 % Curaleaf Holdings, Inc. ("Curaleaf") 8 8 % Trulieve Cannabis Corp. ("Trulieve") 6 8 % Cresco Labs Inc. 5 7 % 8 Table of Contents For the Three Months Ended March 31, 2025 Percentage of Number of Rental Leases Revenue PharmaCann Inc. ("PharmaCann") 11 12 % Ascend 4 11 % Green Thumb 3 8 % Curaleaf 8 8 % Trulieve 6 7 % In each of the tables above, these leases include leases with affiliates of each entity, for which the entity has provided a corporate guaranty. Geographic Concentration As of both March 31, 2026 and December 31, 2025, our largest property was located in New York and accounted for 5.5 % of our net real estate held for investment. No other properties accounted for more than 5 % of our net real estate held for investment as of March 31, 2026 and December 31, 2025. Financial Instruments Financial instruments that potentially subject us to a concentration of credit risk are cash and cash equivalents, notes and interest receivable, and investments in preferred stock and warrant. Concentration of credit risk relating to notes and interest receivable and preferred stock investments are managed by the Company through portfolio monitoring and performing due diligence prior to origination or acquisition. As of both March 31, 2026 and December 31, 2025, the Company had invested $ 100.0 million into the IQHQ Credit Facility and $ 50.0 million into the IQHQ Preferred Stock and IQHQ Warrant (as defined in Note 7), respectively, representing a significant concentration of credit risk. The Company monitors IQHQ’s (as defined in Note 7) credit quality and enforces collateral rights under the credit agreement. We have deposited cash with financial institutions that are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. As of March 31, 2026, we had cash accounts in excess of FDIC insured limits. We have not experienced any losses in such accounts. 3. Common Stock As of March 31, 2026, the Company was authorized to issue up to 50,000,000 shares of common stock, par value $ 0.001 per share, and there were 28,314,520 shares of common stock issued and outstanding. We have entered into equity distribution agreements with four sales agents, pursuant to which we may offer and sell from time to time through an “at-the-market” offering program (the “ATM Program”), including on a forward basis, shares of our common stock and 9.00 % Series A Cumulative Redeemable Preferred Stock, $ 0.001 par value per share (the “Series A Preferred Stock”), up to an aggregate offering price of $ 500.0 million. See Note 4 “Preferred Stock” for information regarding the sale of Series A Preferred Stock under the ATM Program. During the three months ended March 31, 2026, we sold 178,655 shares of common stock pursuant to the ATM Program for net proceeds of $ 9.3 million. No shares of common stock were issued pursuant to the ATM Program during the three months ended March 31, 2025. In March 2025, our Board of Directors authorized a share repurchase program (the "Prior Share Repurchase Program") of up to $ 100.0 million of the Company’s common stock. In March 2026, the Board of Directors authorized a new share repurchase program (the "New Share Repurchase Program") of up to $ 100.0 million of the Company's common stock. The New Share Repurchase Program replaces the Company's Prior Share Repurchase Program, which expired on March 17, 2026. The New Share Repurchase Program expires on March 4, 2027, and may be extended, suspended, modified or 9 Table of Contents discontinued at any time at the Company’s discretion. No shares of common stock were repurchased and retired during the three months ended March 31, 2026 under either of the share repurchase programs. During three months ended March 31, 2025, we repurchased and retired 4,586 shares of common stock under the Prior Share Repurchase Program for $ 0.3 million. 4. Preferred Stock As of March 31, 2026, the Company was authorized to issue up to 50,000,000 shares of preferred stock, par value $ 0.001 per share, and there were 4,718,048 shares issued and outstanding of Series A Preferred Stock. The Company may, at its option, redeem the Series A Preferred Stock, in whole or in part, at any time or from time to time, for cash at a redemption price of $ 25.00 per share, plus all accrued and unpaid dividends on such Series A Preferred Stock up to, but excluding, the redemption date. Holders of the Series A Preferred Stock generally have no voting rights except for limited voting rights if the Company fails to pay dividends for six or more quarterly periods (whether or not consecutive) and in certain other circumstances. During the three months ended March 31, 2026 and 2025, we sold 2,698,523 and 385,147 shares of our Series A Preferred Stock pursuant to the ATM Program for net proceeds of $ 60.3 million and $ 9.2 million, respectively. 5. Dividends The following table describes the dividends declared by the Company during the three months ended March 31, 2026: Declaration Date Security Class Amount Per Share Record Date Dividend Paid Date Dividend Amount (In thousands) March 13, 2026 Common stock $ 1.90 March 31, 2026 April 15, 2026 $ 54,446 March 13, 2026 Series A preferred stock $ 0.5625 March 31, 2026 April 15, 2026 $ 2,654 6. Investments in Real Estate Certain acquisitions of real estate did not satisfy the requirements for sale-leaseback accounting and therefore as of both March 31, 2026 and December 31, 2025, acquisitions of $ 16.8 million have been recognized as notes receivable and are included in other assets, net on our consolidated balance sheets. No impairment losses were recognized during the three months ended March 31, 2026. During the three months ended March 31, 2025, we recognized an impairment loss on real estate of $ 3.5 million related to one of our properties in Palm Springs, California which was under contract for sale and sold in June 2025. Acquired In-Place Lease Intangible Assets In-place lease intangible assets and related accumulated amortization as of March 31, 2026 and December 31, 2025 is as follows (in thousands): March 31, 2026 December 31, 2025 In-place lease intangible assets $ 9,757 $ 9,757 Accumulated amortization ( 3,602 ) ( 3,391 ) In-place lease intangible assets, net $ 6,155 $ 6,366 Amortization of in-place lease intangible assets classified in depreciation and amortization expense in our consolidated statements of income was $ 0.2 million for both the three months ended March 31, 2026 and 2025, respectively. The 10 Table of Contents weighted-average remaining amortization period of the acquired in-place leases was 7.5 years, and the estimated annual amortization of the value of the acquired in-place leases as of March 31, 2026 is as follows (in thousands): Year Amount 2026 (nine months ending December 31) $ 633 2027 844 2028 844 2029 844 2030 844 Thereafter 2,146 Total $ 6,155 Above-Market Lease The above-market lease and related accumulated amortization included in other assets, net on our consolidated balance sheets as of March 31, 2026 and December 31, 2025 is as follows (in thousands): March 31, 2026 December 31, 2025 Above-market lease $ 1,054 $ 1,054 Accumulated amortization ( 394 ) ( 371 ) Above-market lease, net $ 660 $ 683 The above-market lease is amortized on a straight-line basis as a reduction to rental revenues over the remaining lease term of 7.3 years. For both the three months ended March 31, 2026 and 2025, the amortization of the above-market lease was $ 23,000 . Lease Amendments, Terminations and New Leases In January 2024, the lease modifications for two of our leases to extend the initial term of each lease changed the lease classification from operating lease to sales-type lease that did not satisfy all the criteria for recognition as a completed sale. Accordingly, we continue to recognize the underlying assets within net real estate held for investment and all lease payments received, as well as any future lease payments, will be recognized as a deposit liability and will be included in other liabilities on our consolidated balance sheet until certain criteria are met. As of March 31, 2026, we have received lease payments of $ 5.1 million that have been included in other liabilities on our consolidated balance sheet. The underlying assets’ land and building and improvements had a gross carrying value of $ 4.1 million and $ 28.9 million, respectively, and accumulated depreciation of $ 4.6 million as of March 31, 2026. During the three months ended March 31, 2026, the leases with Gold Flora, LLC for the properties located in Desert Hot Springs and Palm Springs, California were terminated in connection with the receivership and concurrent with the lease terminations, we executed new leases with a new tenant for both properties. In March 2026, we executed a new lease with a new tenant for one of our properties located in Illinois, which was previously leased to PharmaCann. Capitalized Costs During the three months ended March 31, 2026, we capitalized costs of $ 0.9 million relating to improvements and construction activities at our properties. Property Dispositions In April 2025, we sold a property in Michigan for $ 9.0 million (excluding transaction costs) and provided a secured loan for $ 8.5 million to the buyer of the property. The loan matures on April 24, 2028 with an option to extend the maturity for twelve months , conditional on the payment of an extension fee. The loan is interest only and payments are payable monthly in advance. The transaction did not qualify for recognition as a completed sale under GAAP since not all of the 11 Table of Contents criteria were met. Accordingly, we have not derecognized the assets transferred on our consolidated balance sheets. All consideration received, as well as any future payments, from the buyer will be recognized as a deposit liability and will be included in other liabilities on our consolidated balance sheet until such time the criteria for recognition as a sale have been met. As of March 31, 2026, we have received a total of $ 1.8 million for a loan origination fee and interest. In addition, as we have not met all of the held-for-sale criteria, land and building and improvements with a gross carrying value of $ 0.4 million and $ 9.6 million, respectively, and accumulated depreciation of $ 2.2 million as of March 31, 2026, remain on the consolidated balance sheet, and the buildings and improvements continue to be depreciated. In February 2026, we sold a property in Arizona for net proceeds of $ 2.6 million and recognized a gain on sale of real estate of $ 0.4 million. Future Contractual Minimum Rent Future contractual minimum rent (including base rent and property management fees) to be received on our leases as of March 31, 2026 for future periods is summarized as follows (in thousands): Year Contractual Minimum Rent 2026 (nine months ending December 31) $ 221,637 2027 308,687 2028 316,054 2029 322,309 2030 326,717 Thereafter 2,903,981 Total $ 4,399,385 Future contractual minimum rent includes payments to be received on two sales-type leases, which will be recognized as a deposit liability and will be included in other liabilities on our consolidated balance sheet until certain criteria are met. 7. Life Science Investments In August 2025, the Company entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) with IQHQ, Inc, a private life science real estate investment trust, and certain of its affiliates (collectively "IQHQ"). The Securities Purchase Agreement, together with certain exhibits thereto, set forth the terms under which the Company agreed to: (i) purchase up to $ 170 million of 15.0 % Series G Cumulative Redeemable Preferred Stock of IQHQ (the “IQHQ Preferred Stock”) at a price of $ 1,000 per share, together with corresponding warrants to purchase common equity units of IQHQ at an exercise price of $ 0.01 per unit, subject to the satisfaction of certain funding milestones of the IQHQ Preferred Stock; and (ii) provide a $ 100 million commitment to IQHQ as a member of a lender syndicate under an Amended and Restated Credit Agreement (the “IQHQ Credit Facility”) with an initial term of three years , extendable by an additional 12 months upon payment of an extension fee and satisfaction of certain other conditions. On September 30, 2025, the Company completed the initial purchase of an aggregate of 5,000 shares of IQHQ Preferred Stock for a total investment of $ 5.0 million. On October 31, 2025, the Company purchased an additional 45,000 shares of IQHQ Preferred Stock for $ 45.0 million, resulting in a total investment of 50,000 shares with an aggregate purchase price of $ 50.0 million. The IQHQ Preferred Stock accrues cumulative dividends comprised of (i) a 10.0 % annual cash dividend and (ii) a 5.0 % paid-in-kind (“PIK”) dividend, with dividends payable quarterly in arrears. The PIK dividend rate increases by 1.25 % on each of the fourth and fifth anniversaries of issuance. In the event of a failure by IQHQ to make required redemptions or cash dividend payments, the PIK dividend rate increases by an additional 5.0 %, until the failure is cured, subject to a cap on the increase. The IQHQ Preferred Stock ranks senior to IQHQ's common equity and any junior securities, pari passu with its Series E Preferred Stock and other parity securities, and junior to its Series A and Series D-1 Preferred Stock with respect to dividends and liquidation preferences. The IQHQ Preferred Stock is not convertible and carries limited voting rights, except as required by law or with respect to charter amendments that are materially adverse to holder rights. The IQHQ Preferred Stock may be redeemed by IQHQ at any time at the greater of $ 1,560 per share or the then-current base amount and may also be subject to holder redemption upon a change of control or sale transaction. The remaining balance of the Company’s committed investment in IQHQ Preferred Stock is scheduled to be funded in multiple tranches commencing the second quarter of 2026 and continuing through the second quarter of 2027, subject to 12 Table of Contents extension options exercisable by IQHQ. In connection with the initial closing, the Company also received a warrant (the “IQHQ Warrant”) to purchase common equity units of IQHQ. The IQHQ Warrant is exercisable for a number of common equity units representing 1.5 % of the fully diluted outstanding common equity of IQHQ (after giving effect to all previously issued warrants) as of the date of the initial closing. Pursuant to the terms of the Securities Purchase Agreement, upon the initial closing, the Company obtained the right to appoint one voting member to IQHQ’s board of directors, subject to certain ownership thresholds, and designated Paul Smithers, the Company’s President and Chief Executive Officer, for this role. The Company also entered into a right of first offer letter with IQHQ, granting the Company a contractual right of first offer on certain real estate asset sales of IQHQ. Additionally, in connection with the initial closing under the Securities Purchase Agreement, on September 30, 2025, the Company became a lender under the IQHQ Credit Facility and fully funded its $ 100.0 million commitment. The IQHQ Credit Facility bears interest at a fixed annual rate of 13.5 %, consisting of 12.0 % payable in cash and 1.5 % PIK, with interest payable quarterly. The IQHQ Credit Facility has an initial maturity on September 30, 2028, with a one -time extension option of up to 12 months, subject to the satisfaction of certain conditions and payment of a facility extension fee. All obligations under the IQHQ Credit Facility are unconditionally guaranteed by IQHQ and secured by a first priority pledge of certain of IQHQ's assets. The Company is subject to a rate reduction penalty of up to 3.0 % in the event it fails to make required purchases of IQHQ Preferred Stock under the Securities Purchase Agreement. The IQHQ Credit Facility includes customary representations, warranties, and covenants, as well as major decision rights requiring lender approval. IQHQ is required to prepay loans with proceeds from certain asset or equity sales and may voluntarily prepay or reduce commitments subject to specified conditions. The following table details the carrying value of our life science investments, including the value of the forward contract to purchase the remaining minimum commitment of IQHQ Preferred Stock (in thousands): March 31, 2026 December 31, 2025 Investment in IQHQ Preferred Stock $ 47,430 $ 47,430 Investment in IQHQ Warrant 5,321 5,321 Forward contract for the purchase of IQHQ Preferred Stock 2,562 2,562 PIK dividend 1,075 444 Investment in IQHQ Credit Facility 96,806 96,493 PIK interest 786 415 Total $ 153,980 $ 152,665 As of March 31, 2026 and December 31, 2025, there were no impairments or adjustments to the carrying value of the investments in the equity securities of IQHQ as a result of observable price changes and there were no allowance for credit losses with respect to our investment in the IQHQ Credit Facility. 8. Debt Notes due 2026 In May 2021, our Operating Partnership issued $ 300.0 million aggregate principal amount of its 5.50 % Senior Notes due 2026 (the “Notes due 2026”). The Notes due 2026 are senior unsecured obligations of our Operating Partnership, are fully and unconditionally guaranteed by us and rank equally in right of payment with all of the Operating Partnership’s future senior unsecured indebtedness. However, the Notes due 2026 are effectively subordinated to any of the Company’s, the Operating Partnership’s and the Operating Partnership’s subsidiaries’ future secured indebtedness to the extent of the value of the assets securing such indebtedness. The Notes due 2026 requires semiannual interest payments at a rate of 5.50 % per year and will mature on May 25, 2026. The terms of the Notes due 2026 are governed by an indenture dated May 25, 2021, and provide that if the debt rating on the Notes due 2026 is downgraded or withdrawn entirely, interest on the Notes due 2026 will increase to a range of 6.0 % to 6.5 % based on such debt rating. 13 Table of Contents In connection with the issuance of the Notes due 2026, we recorded $ 6.8 million of issuance costs, which are being amortized using the effective interest method and recognized as non-cash interest expense over the term of the Notes due 2026. The effective interest rate including amortization of issuance costs is 6.03 %. The following table details our interest expense related to the Notes due 2026 (in thousands): For the Three Months Ended March 31, 2026 2025 Cash coupon $ 4,004 $ 4,081 Amortization of issuance cost 379 364 Capitalized interest ( 50 ) ( 56 ) Total interest expense $ 4,333 $ 4,389 The following table details the carrying value of our Notes due 2026 (in thousands): March 31, 2026 December 31, 2025 Principal amount $ 291,215 $ 291,215 Unamortized issuance cost ( 234 ) ( 613 ) Carrying value $ 290,981 $ 290,602 As of March 31, 2026, the Operating Partnership may redeem some or all of the Notes due 2026 at its option at any time at 100 % of the principal amount of the Notes due 2026 being redeemed, plus accrued and unpaid interest thereon to, but excluding, the applicable redemption date. In February 2025, we made early partial repayments at a discount totaling $ 8.7 million on the Notes due 2026, reducing the principal balance by $ 8.8 million. Following the partial repayment, all other terms and conditions of the debt agreement remain unchanged. The terms of the indenture for the Notes due 2026 require compliance with various financial covenants, including minimum level of debt service coverage and limits on the amount of total leverage and secured debt maintained by the Operating Partnership. Management believes that it was in compliance with those covenants as of March 31, 2026. Accrued interest payable for the Notes due 2026 as of March 31, 2026 and December 31, 2025 was $ 6.0 million and $ 2.0 million, respectively, and is included in accounts payable and accrued expenses on our consolidated balance sheets. Revolving Credit Facility In October 2023, our Operating Partnership entered into a loan and security agreement (the “Loan Agreement”) with a federally regulated commercial bank, as lender and as agent for lenders that become party thereto from time to time, which matures on October 23, 2026. The Loan Agreement initially provided $ 50.0 million in aggregate commitments for secured revolving loans (the “Revolving Credit Facility”), the availability of which is based on a borrowing base consisting of real properties owned by subsidiaries (the “Subsidiary Guarantors”) of the Operating Partnership that satisfy eligibility criteria set forth in the Loan Agreement. The obligations of the Operating Partnership under the Loan Agreement are guaranteed by the Company and the Subsidiary Guarantors, and are secured by certain assets of the Company. Borrowings under the Revolving Credit Facility bear interest at a variable rate based on the greater of the prime rate and an applicable margin based on deposits with the participating bank(s) and a stipulated interest rate. At March 31, 2026, the interest rate was 9.0 %. The Revolving Credit Facility is subject to an unused line of credit fee, calculated in accordance with the Loan Agreement. The Loan Agreement is subject to certain liquidity and operating covenants and includes customary representations and warranties, affirmative and negative covenants and events of default. The Loan Agreement also allows the Operating Partnership, subject to the satisfaction of certain conditions, to request additional revolving loan commitments up to a specified amount. In November 2024, our Operating Partnership entered into an amendment to the Loan Agreement, pursuant to which the aggregate commitments under the Revolving Credit Facility was increased from $ 50.0 million to $ 87.5 million. There were no amounts outstanding under the Revolving Credit Facility as of March 31, 2026. As of December 31, 2025, there were $ 27.5 million of borrowings outstanding under the Revolving Credit Facility. 14 Table of Contents In connection with the Revolving Credit Facility, we recorded $ 1.2 million of deferred financing costs, which are being amortized on a straight-line basis and recognized as non-cash interest expense over the term of the Revolving Credit Facility. For both the three months ended March 31, 2026 and 2025, we recognized $ 0.1 million, respectively, of non-cash interest expense related to the Revolving Credit Facility. IIP Life Science Credit Facility On October 2025, our Operating Partnership and IIP Life Science Investments LLC ("IIP Life Science") entered into a loan agreement with a federally regulated commercial bank, as agent for the lenders that become party thereto from time to time (the “IIP Life Science Credit Facility”). Under the IIP Life Science Credit Facility, our Operating Partnership has a revolving line of credit available up to $ 100.0 million until the maturity date on October 3, 2028. The IIP Life Science Credit Facility includes an accordion feature under which the revolving line of credit may be increased up to an aggregate of $ 135.0 million, under certain conditions, including obtaining additional lender commitments. The availability of credit at any given time under the IIP Life Science Credit Facility is subject to, among other things, the amount of collateral available and a borrowing base formula based upon the value of eligible investments in certain securities and an eligible loan receivable. All obligations under the IIP Life Science Credit Facility are secured by substantial assets of the loan parties, including the Company’s investment through IIP Life Science in IQHQ Preferred Stock, the IQHQ Warrant, and the IQHQ Credit Facility. Borrowings under the IIP Life Science Credit Facility will bear interest on the outstanding daily balance at a rate of interest per annum equal to the greater of (i) the one-month Secured Overnight Financing Rate ("SOFR"), as administered by CME Group Benchmark Administration, plus 2.0 % and (ii) 6.10 %. As of both March 31, 2026 and December 31, 2025, there were $ 75.0 million of borrowings outstanding under the IIP Life Science Credit Facility. The IIP Life Science Credit Facility contains a liquidity covenant and a debt service coverage ratio covenant, which requires that the ratio of the Company’s consolidated EBITDA to debt service costs not be less than 2.0 to 1.0, measured as of the end of each fiscal quarter. Management believes that it was in compliance with those covenants as of March 31, 2026. In connection with the IIP Life Science Credit Facility, we recorded $ 0.9 million of issuance costs, which are being amortized on a straight-line basis and recognized as non-cash interest expense over the term of the IIP Life Science Credit Facility. For the three months ended March 31, 2026, we recognized $ 79,000 of non-cash interest expense related to the IIP Life Science Credit Facility. The following table summarizes the principal payments on our outstanding indebtedness as of March 31, 2026 (in thousands): Payments Due by Year Amount 2026 (nine months ending December 31) $ 291,215 2027 — 2028 75,000 Total $ 366,215 9. Net Income Per Share Grants of restricted stock and restricted stock units (“RSUs”) of the Company in share-based payment transactions are considered participating securities prior to vesting and, therefore, are considered in computing basic earnings per share under the two-class method. The two-class method is an earnings allocation method for calculating earnings per share when a company’s capital structure includes either two or more classes of common stock or common stock and participating securities. Earnings per basic share under the two-class method is calculated based on dividends declared on common shares and other participating securities (“distributed earnings”) and the rights of participating securities in any undistributed earnings, which represents net income remaining after deduction of dividends accruing during the period. The undistributed earnings are allocated to all outstanding common shares and participating securities based on the relative percentage of each security to the total number of outstanding participating securities. Earnings per basic share represents the summation of the distributed and undistributed earnings per share class divided by the total number of shares. 15 Table of Contents Through March 31, 2026, all of the Company’s participating securities received dividends or dividend equivalents at an equal dividend rate per share or unit. As a result, distributions to participating securities for the three months ended March 31, 2026 and 2025 have been included in net income attributable to common stockholders to calculate net income per basic and diluted share. Computations of net income per basic and diluted share (in thousands, except share and per share data) were as follows: For the Three Months Ended March 31, 2026 2025 Net income $ 32,809 $ 31,077 Preferred stock dividends ( 2,654 ) ( 781 ) Distribution to participating securities ( 983 ) ( 747 ) Net income attributable to common stockholders used to compute net income per share (basic and diluted) $ 29,172 $ 29,549 Weighted-average common shares outstanding: Basic 27,991,910 28,275,549 Restricted stock and RSUs 475,274 312,473 Diluted 28,467,184 28,588,022 Net income attributable to common stockholders per share: Basic $ 1.04 $ 1.05 Diluted $ 1.02 $ 1.03 10. Fair Value Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. Accounting guidance also establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value: Level 1—Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2—Includes other inputs that are directly or indirectly observable in the marketplace. Level 3—Unobservable inputs that are supported by little or no market activities, therefore requiring an entity to develop its own assumptions. The following table presents the carrying value and approximate fair value of financial instruments at March 31, 2026 and December 31, 2025 (in thousands): At March 31, 2026 At December 31, 2025 Carrying Value Fair Value Carrying Value Fair Value Life science investments (1) $ 97,592 $ 97,592 $ 96,908 $ 96,908 Construction loan (2) $ 22,800 $ 30,056 $ 22,800 $ 29,997 Investments as cash equivalents (3) $ 159 $ 159 $ 158 $ 158 Notes receivable (4) $ 16,786 $ 16,786 $ 16,786 $ 16,786 Notes due 2026 (5) $ 290,981 $ 289,526 $ 290,602 $ 288,644 Revolving credit facility (6) $ — $ — $ 27,500 $ 27,500 Life science credit facility (7) $ 75,000 $ 75,000 $ 75,000 $ 75,000 16 Table of Contents (1) Excludes $ 56.4 million and $ 55.8 million as of March 31, 2026 and December 31, 2025, respectively, of investments in the IQHQ Preferred Stock and IQHQ Warrant which are carried at cost under the measurement alternative of ASC 321, Investments - Equity Securities . The investment in the IQHQ Credit Facility is categorized as Level 3 and was valued using a yield analysis, which is typically performed for non-credit impaired loans. To determine fair value using a yield analysis, a current price is imputed for the loan based upon an assessment of the expected market yield for a similarly structured loan with a similar level of risk. In the yield analysis, the Company considers the current contractual interest rate, the maturity and other terms of the loan relative to risk of the company and the specific loan. At March 31, 2026 and December 31, 2025, the expected market yield used to determine fair values were 16.5 % and 16.8 %, respectively. Changes in market yields may change the fair value of the investment into the revolving credit facility. Generally, an increase in market yields may result in a decrease in the fair value of the investment in the revolving credit facility. Due to the inherent uncertainty of determining the fair value of a loan that does not have a readily available market value, the fair value of the investment in the revolving credit facility may fluctuate from period to period. Additionally, the fair value of the investment in the revolving credit facility may differ significantly from the value that would have been used had a readily available market existed for such loan and may differ materially from the value that the Company may ultimately realize. (2) The construction loan receivable is categorized as Level 3 and was valued using a yield analysis, which is typically performed for non-credit impaired loans. To determine fair value using a yield analysis, a current price is imputed for the loan based upon an assessment of the expected market yield for a similarly structured loan with a similar level of risk. In the yield analysis, the Company considers the current contractual interest rate, the maturity and other terms of the loan relative to risk of the company and the specific loan. At each of March 31, 2026 and December 31, 2025, the expected market yield used to determine fair value was 16.25 %. Changes in market yields may change the fair value of the construction loan. Generally, an increase in market yields may result in a decrease in the fair value of the construction loan. Due to the inherent uncertainty of determining the fair value of a loan that does not have a readily available market value, the fair value of the construction loan may fluctuate from period to period. Additionally, the fair value of the construction loan may differ significantly from the value that would have been used had a readily available market existed for such loan and may differ materially from the value that the Company may ultimately realize. (3) Investments as cash equivalents include investments of obligations of the U.S. government with an original maturity at the time of purchase of 90 days or less are classified as held-to-maturity, stated at amortized cost and valued using Level 1 inputs. Investments as cash equivalents also include investments in a money market fund that invests 100 % in U.S. government securities, which is stated at cost and valued using Level 1 inputs. (4) Notes receivable relate to certain acquisitions of real estate which did not satisfy the requirements for sale-leaseback accounting (see Note 6 “Investment in Real Estate” to our consolidated financial statements for more information). The notes receivable are categorized as Level 3 and were valued using a yield analysis. At March 31, 2026 and December 31, 2025, the weighted average expected market yields used to determine fair values were 29.1 % and 26.5 %, respectively. (5) The fair value is determined based upon Level 2 inputs as the Notes due 2026 were not traded in an active market. (6) The Revolving Credit Facility is categorized as Level 2 and was valued using a discounted cash flow analysis based on significant other observable inputs such as available market information on discount and borrowing rates with similar terms, maturities, and credit ratings. Changes in discount and borrowing rates may change the fair value of the Revolving Credit Facility. Additionally, the use of different market assumptions or estimation methods may have a material effect on the estimated fair value. (7) The Life Science Credit Facility is categorized as Level 2 and was valued using a discounted cash flow analysis based on significant other observable inputs such as available market information on discount and borrowing rates with similar terms, maturities, and credit ratings. Changes in discount and borrowing rates may change the fair value of the Life Science Credit Facility. Additionally, the use of different market assumptions or estimation methods may have a material effect on the estimated fair value. The carrying amounts of cash equivalents, accounts payable, accrued expenses and other liabilities approximate their fair values. 11. Common Stock Incentive Plan Our board of directors adopted our 2016 Omnibus Incentive Plan (the “2016 Plan”) to enable us to motivate, attract and retain the services of directors, employees and consultants considered essential to our long-term success. The 2016 Plan offers our directors, employees and consultants an opportunity to own our stock or rights that will reflect our growth, development and financial success. Under the terms of the 2016 Plan, the aggregate number of shares of our common stock subject to options, restricted stock, stock appreciation rights, restricted stock units and other awards, will be no more than 1,000,000 shares. Any equity awards that lapse, expire, terminate, are canceled or are forfeited (including forfeitures in connection with satisfaction of tax withholding obligations of the recipient) are re-credited to the 2016 Plan’s reserve for future issuance. The 2016 Plan will automatically terminate in December 2026. 17 Table of Contents A summary of the restricted stock activity under the 2016 Plan and related information for the three months ended March 31, 2026 is included in the table below: Unvested Restricted Stock Weighted- Average Grant Date Fair Value Nonvested balance at December 31, 2025 109,591 $ 80.61 Granted 113,937 $ 49.85 Vested ( 28,355 ) $ 78.07 Forfeited (1) ( 18,680 ) $ 103.65 Balance at March 31, 2026 176,493 $ 58.72 (1) Shares that were forfeited to cover the employees’ tax withholding obligation upon vesting. The remaining unrecognized compensation cost of $ 8.9 million for restricted stock awards is expected to be recognized over a weighted-average amortization period of 2.2 years as of March 31, 2026. The fair value of restricted stock that vested during the three months ended March 31, 2026 was $ 2.3 million. The following table summarizes our RSU activity for the three months ended March 31, 2026. RSUs are issued as part of the Innovative Industrial Properties, Inc. Nonqualified Deferred Compensation Plan (the “Deferred Compensation Plan”), which allows a select group of management and our non-employee directors to defer receiving certain of their cash and equity-based compensation. RSUs are subject to vesting conditions of the Deferred Compensation Plan and have the same economic rights as shares of restricted stock under the 2016 Plan: Restricted Stock Units Weighted-Average Grant Date Fair Value Balance at December 31, 2025 280,555 $ 104.19 Granted 87,366 $ 49.85 Vested and converted to common stock, net ( 17,633 ) $ 85.72 Forfeited (1) ( 9,258 ) $ 75.35 Balance at March 31, 2026 341,030 $ 92.01 (1) Shares that were forfeited to cover employee's tax withholding obligation upon distribution from the Deferred Compensation Plan. The remaining unrecognized compensation cost of $ 8.5 million for RSU awards is expected to be recognized over an amortization period of 2.1 years as of March 31, 2026. 12. Commitments and Contingencies Improvement Allowances. As of March 31, 2026, we had $ 4.4 million of commitments related to improvement allowances, which generally may be requested by the tenants at any time up until a date that is near the expiration of the initial term of the applicable lease. Life Science Investments. As of March 31, 2026, we had $ 120.0 million remaining on our commitment to purchase up to $ 170.0 million of IQHQ Preferred Stock, scheduled to be funded in various installments by June 30, 2027, subject to extension options exercisable by IQHQ. See Note 7 "Life Science Investments" for further details. Environmental Matters. We follow the policy of monitoring our properties, both targeted acquisition and existing properties, for the presence of hazardous or toxic substances. While there can be no assurance that a material environmental liability does not exist, we are not currently aware of any environmental liabilities that would have a material adverse effect on our financial condition, results of operations and cash flow, or that we believe would require disclosure or the recording of a loss contingency. 18 Table of Contents Litigation. Class Action Lawsuits On April 25, 2022, a federal securities class action lawsuit was filed against the Company and certain of its officers. The case was named Michael V. Mallozzi, individually and on behalf of others similarly situated v. Innovative Industrial Properties, Inc., Paul Smithers, Catherine Hastings and Andy Bui, Case No. 2-22-cv-02359 , and was filed in the U.S. District Court for the District of New Jersey. On September 25, 2024, the district court granted defendants’ motion to dismiss the operative complaint with prejudice. The plaintiff appealed, and on October 15, 2025, the United States Court of Appeals for the Third Circuit affirmed the dismissal. On October 29, 2025, the appellant filed a petition for rehearing en banc, which was denied on November 13, 2025. Plaintiff did not file a petition for writ of certiorari with the U.S. Supreme Court. On January 17, 2025, a second federal securities class action lawsuit was filed against the Company and certain of its officers. The case was named Alain Giraudon, individually and on behalf of others similarly situated v. Innovative Industrial Properties, Inc., Alan D. Gold, Paul E. Smithers, David Smith and Ben Regin, Case No. 1:25-cv-00182-RDB , and was filed in the U.S. District Court for the District of Maryland. The lawsuit was purportedly brought on behalf of purchasers of our common stock and alleges that we and certain of our officers made false or misleading statements regarding our business in violation of Section 10(b) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), SEC Rule 10b-5, and Section 20(a) of the Exchange Act. According to the filed complaint, the plaintiff is seeking an undetermined amount of damages, interest, attorneys’ fees and costs and other relief on behalf of the putative classes of all persons who acquired shares of the Company’s common stock between February 27, 2024, and December 19, 2024. On June 23, 2025, a Consolidated Class Action Complaint was filed under the same Case Number, adding Catherine Hastings as a defendant, and asserting causes of action under Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5 promulgated thereunder. According to the Consolidated Class Action Complaint, the plaintiff is seeking an undetermined amount of damages, interest, attorneys’ fees and costs and other relief on behalf of the putative classes of all persons who acquired shares of the Company’s common stock between February 26, 2024 and March 28, 2025. On August 22, 2025, defendants moved to dismiss the Consolidated Class Action Complaint, and on October 21, 2025, plaintiff responded with their opposition to defendants’ motion to dismiss. On November 20, 2025, defendants filed a reply in support of their motion to dismiss. It is possible that similar lawsuits may yet be filed in the same or other courts that name the same or additional defendants. We intend to defend the lawsuit vigorously. However, at this time, we cannot predict the probable outcome of this action, and, accordingly, no amounts have been accrued in the Company’s consolidated financial statements. Derivative Action Lawsuits Five derivative lawsuits were filed related to the Mallozzi federal securities class action discussed above. John Rice, derivatively on behalf of Innovative Industrial Properties, Inc. v. Paul Smithers, Catherine Hastings, Andy Bui, Alan Gold, Gary Kreitzer, Mary Curran, Scott Shoemaker, David Stecher, and Innovative Industrial Properties, Inc., Case Number 24-C-22-003312 , and Karen Draper, derivatively on behalf of Innovative Industrial Properties, Inc. v. Paul Smithers, Catherine Hastings, Andy Bui, Alan Gold, Gary Kreitzer, Mary Curran, Scott Shoemaker, David Stecher, Defendants, and Innovative Industrial Properties Inc., Nominal Defendant, Case Number 24-C-22-004243 , were filed in the Circuit Court for Baltimore City, Maryland. On October 19, 2022, the parties to both cases filed a Joint Motion to Consolidate Related Shareholder Derivative Actions and to Appoint Lead and Liaison Counsel for plaintiffs, which was granted on December 19, 2022, along with a stay in the lawsuit pending a ruling on the defendants’ motion to dismiss the federal class action lawsuit described above. On February 13, 2026, the parties filed a Joint Motion for Voluntary Dismissal Without Prejudice. Two derivative lawsuits, named Ross Weintraub, derivatively on behalf of Innovative Industrial Properties, Inc. v. Alan Gold, Paul Smithers, Catherine Hastings, Ben Regin, Andy Bui, Tracie Hager, Gary Kreitzer, David Stecher, Scott Shoemaker, Mary Curran, and Innovative Industrial Properties, Inc., Case Number 1:23-cv-00737-GLR , and Franco DeBlasio, on behalf of Gerich Melenth Nin (GMN) LP, derivatively on behalf of Innovative Industrial Properties, Inc. v. Paul Smithers, Catherine Hastings, Alan D. Gold, Tracie J. Hager, Benjamin C. Regin, Andy Bui, Gary A. Kreitzer, David Stecher, Scott Shoemaker, Mary Curran, and Innovative Industrial Properties, Inc., Case Number 1:23-cv-01513-GLR , were filed in the United States District Court for the District of Maryland. On July 19, 2023, the United States Court for the District of Maryland consolidated Case Nos. 1:23-cv-00737-GLR and 1:23-cv-01513-GLR with case number 1:23-cv-00737-GLR as the lead case and kept the stay in place. After the United States Court of Appeals for the Third Circuit affirmed dismissal of the Mallozzi class action on October 15, 2025, plaintiffs in the consolidated action filed a Consent 19 Table of Contents Motion for Voluntary Dismissal on October 20, 2025. On October 21, 2025, the United States Court for the District of Maryland granted the dismissal. On May 9, 2024, a fifth derivative action lawsuit was filed against the Company and certain of its officers and directors. The case was named Gary A Gedig, derivatively on behalf of Innovative Industrial Properties, Inc. v. Paul Smithers, Catherine Hastings, Ben Regin, Andy Bui, Tracy Hager, Alan Gold, Gary A. Kreitzer, Mary Curran, Scott Shoemaker, M.D., and David Stecher, and Innovative Industrial Properties, Inc., Civil No. C-24-CV-24-000130 , and filed in the Circuit Court for Baltimore City, Maryland. Plaintiff and defendants in this action filed a Joint Stipulation to Stay the Proceedings, which was granted on September 17, 2024. This derivative action relates to the same allegations as those made in the Mallozzi class action, detailed above, and remains pending. On April 23, 2026, the defendants filed a motion to dismiss this derivative action. On February 12, 2025, a derivative action lawsuit was filed against the Company and certain of its officers and directors. The case was named Joshua Steffens, derivatively on behalf of Innovative Industrial Properties, Inc. v. Alan Gold, Paul Smithers, David Smith, Ben Regin, Gary Kreitzer, Gary Stecher, Scott Shoemaker, Mary Allis Curran, and Innovative Industrial Properties, Inc., Case Number 1:25-cv-00456-ABA , and was filed in the United States District Court for the District of Maryland. The lawsuit asserts putative derivative claims for violations of the Exchange Act, breach of fiduciary duty, aiding and abetting breach of fiduciary duty, unjust enrichment, waste of corporate assets, and contribution against the directors and certain officers of the Company. The plaintiffs are seeking an undetermined amount of damages, interest, an accounting and constructive trust, punitive damages, and attorneys’ fees and costs. On February 18, 2025, the case was reassigned and given Case Number 1:25-cv-00456-GLR. On February 19, 2025, the United States Court for the District of Maryland consolidated Case Nos. 1:25-cv-00469-BAH (detailed below) with case number 1:25-cv-00456-GLR as the lead case, which is stayed. Plaintiff and defendants in this action filed a Joint Stipulation and Order Staying the Consolidated Action, which was granted on March 13, 2025. This derivative action relates to the same allegations as those made in the Giraudon class action, detailed above. On February 13, 2025, a derivative action lawsuit was filed against the Company and certain of its officers and directors. The case was named Joshua Albers, derivatively on behalf of Innovative Industrial Properties, Inc. v. Alan Gold, Paul Smithers, David Smith, Ben Regin, Gary Kreitzer, Gary Stecher, Scott Shoemaker, Mary Allis Curran, and Innovative Industrial Properties, Inc., Case Number 1:25-cv-00469-BAH , and was filed in the United States District Court for the District of Maryland. The lawsuit asserts putative derivative claims for violations of the Exchange Act, breach of fiduciary duty, aiding and abetting breach of fiduciary duty, unjust enrichment, waste of corporate assets, and contribution against the directors and certain officers of the Company. The plaintiffs are seeking an undetermined amount of damages, interest, reform, punitive damages, and attorneys’ fees and costs. On February 19, 2025, the United States Court for the District of Maryland consolidated Case Nos. 1:25-cv-00469-BAH with case number 1:25-cv-00456-GLR as the lead case. This derivative action also relates to the same allegations as those made in the Giraudon class action, detailed above. On August 14, 2025 and August 21, 2025, two derivative action lawsuits were filed against the Company and certain of its officers and directors in the Circuit Court for Baltimore County, Maryland: Joann Crepaz, derivatively on behalf of Innovative Industrial Properties, Inc. v. Alan Gold, David Boyle, Mary Curran, Catherine Hastings, Gary Kreitzer, Ben Regin, Scott Shoemaker, David Smith, Paul Smithers, David Stecher, and Innovative Industrial Properties, Inc., Case Number C-03-CV-25-003997 , and Edward Ramos, derivatively on behalf of Innovative Industrial Properties, Inc. v. Alan Gold, David Boyle, Mary Curran, Catherine Hastings, Gary Kreitzer, Ben Regin, Scott Shoemaker, David Smith, Paul Smithers, David Stecher, and Innovative Industrial Properties, Inc., Case Number C-03-CV-25-004083 . Each complaint asserts putative derivative claims for breach of fiduciary duty and unjust enrichment against certain directors and officers and seeks an undetermined amount of damages, reform, restitution, and attorneys’ fees and costs. On September 18, 2025, the parties filed a joint motion to consolidate the actions, which the court granted on October 23, 2025, designating the Crepaz action as the lead case. These derivative actions relate to the same allegations as those asserted in the Giraudon class action described above and were stayed pending resolution of the Giraudon motion to dismiss, by an order of the Circuit Court of Baltimore Count, Maryland that was issued on February 13, 2026. On November 19, 2025, a derivative action lawsuit was filed against the Company and certain of its officers and directors. The case was named James Loen, derivatively on behalf of Nominal Defendant Innovative Industrial Properties v. Alan Gold, Paul Smithers, David Smith, Ben Regin, Gary Kreitzer, Scott Shoemaker, Catherine Hastings, David Stecher, and Mary Curran, Case Number 1:25-cv-03786 , and was filed in the United States District Court of Maryland. The lawsuit asserts putative derivative claims for breach of fiduciary duty and unjust enrichment against the directors and certain officers of the Company. The plaintiff is seeking an undetermined amount of damages, reform, restitution, and attorneys’ fees and costs. On January 23, 2026, the defendants filed a motion to dismiss plaintiff’s claims. On February 3, 2026, the 20 Table of Contents defendants filed a motion to consolidate the Loen lawsuit with the Steffens and Albers consolidated action, 1:25-cv-00456. On February 17, 2026, the parties filed a Joint Stipulation and Order Staying Action pursuant to which the parties agreed to stay the lawsuit until the resolution of the Giraudon class action. The stay can be lifted before then by either party with 30 days’ notice. The Company intends to vigorously defend each of these lawsuits. However, at this time, the Company cannot predict the probable outcome of these actions, and, accordingly, no amounts have been accrued in the Company’s consolidated financial statements. SEC Investigation On February 13, 2026, the Company was notified that the SEC is conducting a formal investigation of the Company concerning matters generally similar to those alleged in the Giraudon case and related derivative lawsuits. On the same date, the Company received a subpoena from the Denver Regional Office of the Division of Enforcement of the SEC requesting the production of documents and information related to the investigation. The Company intends to cooperate fully with the SEC. We may, from time to time, be a party to other legal proceedings, which arise in the ordinary course of our business. Although the results of these proceedings, claims, inquiries, and investigations cannot be predicted with certainty, we do not believe that the final outcome of these matters is reasonably likely to have a material adverse effect on our business, financial condition, or results of operations. Regardless of final outcomes, however, any such proceedings, claims, inquiries, and investigations may nonetheless impose a significant burden on management and employees and may come with significant defense costs or unfavorable preliminary and interim rulings. At this stage of the investigation, the Company believes that a loss is neither probable or estimable. 13. Segment Information Our reportable segments consist of the following as of March 31, 2026: • Cannabis Portfolio Segment , which primarily includes the acquisition, development and redevelopment, and leasing of real estate properties to regulated cannabis operators on a long-term triple-net basis. • Life Science Portfolio Segment , which includes the investments in the IQHQ Credit Facility, IQHQ Preferred Stock and IQHQ Warrant. The CODM is our President and Chief Executive Officer. The CODM evaluates the performance of each reportable segment and allocates resources based on segment net income. Items that are not directly assignable to a reportable segment are reflected as Unallocated, consistent with how our CODM utilizes segment information for planning and execution of our business strategy. Total capital expenditures are reviewed by the CODM on a consolidated basis as presented in the accompanying consolidated statements of cash flows. All of our operations are conducted within the United States. The segment net income, including significant segment expenses that are regularly reviewed by the CODM, for the three months ended March 31, 2026 and 2025, and the total segment assets as of March 31, 2026 and December 31, 2025, are presented in the tables below (in thousands): 21 Table of Contents For the Three Months Ended March 31, 2026 2025 Cannabis Portfolio Segment: Rental revenues (including tenant reimbursements) $ 68,920 $ 71,697 Other revenues 76 25 Total reportable segment revenue 68,996 71,722 Property expenses ( 7,576 ) ( 7,379 ) Depreciation and amortization expense ( 18,584 ) ( 18,391 ) Impairment loss on real estate — ( 3,527 ) Gain (loss) on sale of real estate 422 — Interest and other income 442 600 Cannabis Portfolio Segment net income 43,700 43,025 Life Science Portfolio Segment: Interest and other income 5,544 — Life Science Portfolio Segment net income 5,544 — Total reportable segment net income 49,244 43,025 Unallocated: General and administrative expense ( 10,349 ) ( 8,461 ) Interest and other income 345 1,013 Interest expense ( 6,431 ) ( 4,500 ) Net income 32,809 31,077 Preferred stock dividends ( 2,654 ) ( 781 ) Net income attributable to common stockholders $ 30,155 $ 30,296 Segment Total Assets: March 31, 2026 December 31, 2025 Cannabis Portfolio Segment $ 2,145,401 $ 2,165,359 Life Science Portfolio Segment 153,980 152,665 Unallocated 94,599 52,834 Total $ 2,393,980 $ 2,370,858 14. Subsequent Events Issuance of Common Stock In April 2026, we sold 514,950 shares of common stock pursuant to the ATM Program for net proceeds of $ 25.6 million. Issuance of Preferred Stock In April 2026, we sold 506,628 shares of our Series A Preferred Stock pursuant to the ATM Program for net proceeds of $ 10.6 million. 22 Table of Contents Issuance of Debt In April 2026, the Company closed a $ 20.0 million, three-year secured term loan which bears interest at a fixed rate of 9.0 %. Purchase of IQHQ Preferred Stock In April 2026, the Company purchased an additional 25,000 shares of IQHQ Preferred Stock for $ 25.0 million. Repayment of Notes due 2026 In April 2026, the Company made early partial repayments on the Notes due 2026, reducing the principal balance by $ 9.1 million. New Lease In April 2026, the Company executed a new lease with Curaleaf for our property located in Buckeye Lake, Ohio, which was previously leased to PharmaCann. 23 Table of Contents