California’s legal cannabis industry is slouching toward an “extinction event,”
In what observers say is a sign that California’s struggling legal cannabis industry is slouching toward a long-predicted “extinction event,” a major Southern California brand in the middle of ambitious expansion plans was recently sued by its landlord after falling behind on millions of dollars in lease payments.
In July, privately held Kings Garden – headquartered in Palm Springs and a holder of cultivation, manufacturing and distribution licenses – defaulted on $2.3 million in rent and related fees owed to Innovative Industrial Properties (IIP), a San Diego-based real estate investment trust (REIT) that’s a major player in cannabis, regulatory filings first cited by a Twitter user reveal.
A subsequent lawsuit filed by IIP – which leases more than 8.5 million square feet of commercial real estate to some of the nation’s biggest cannabis companies – against Kings Garden was settled out of court on Sept. 11 “to the mutual satisfaction of both parties,” according to more recent filings.
Reached via phone on Sept. 21, both Kings Garden CEO Michael King and IIP CEO Paul Smithers declined to comment, citing the confidential nature of the settlement.
“For confidentiality reasons, I’m not permitted to comment further,” King said.
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