Financial Data and Key Metrics Changes - Total revenues for Q3 2025 were $64.7 million, a 3% increase compared to the prior quarter, primarily due to a $0.8 million payment from the Gold Flora receivership and annual rent escalations [14] - Adjusted funds from operations (AFFO) totaled $48.3 million, or $1.71 per share, representing no change from the second quarter results [14] - The company ended the quarter with nearly $80 million in liquidity, including cash on hand and availability under its credit facility [14][15] - The balance sheet remains strong, supported by $2.7 billion in primarily unencumbered gross assets and a low-leverage capital structure with a debt-to-gross assets ratio of 13% [14][16] Business Line Data and Key Metrics Changes - The company completed its initial investment of $105 million into IQHQ, a life science real estate platform, which is expected to enhance diversification and provide significant earnings accretion [4][5] - Year-to-date, the company executed leases totaling 281,000 sq ft across properties in California and Michigan [11] - The investment in IQHQ is expected to be highly accretive, with a blended interest rate exceeding 14% [16] Market Data and Key Metrics Changes - The cannabis industry is seeing a growing interest from operators, with demographic trends indicating that seniors are the fastest-growing consumer segment, with usage growing at a 9% five-year compounded annual growth rate [9] - Global spending on AI and pharma and biotech is projected to reach $3 billion in 2025 and $16.5 billion by 2034, reflecting a 27% CAGR [12] Company Strategy and Development Direction - The company is diversifying its portfolio beyond cannabis into the life science sector, which is expected to capture long-term secular growth [5][6] - The dual-track strategy aims to enhance shareholder value and position the company for sustained success across both industries [6] - The company is actively evaluating its capital structure and exploring strategic financing alternatives to align with long-term growth objectives [17] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism regarding the cannabis industry's future, citing potential federal cannabis reform and the positive demographic trends among seniors [9][42] - The company remains cautious about the timing of federal rescheduling but believes it could unlock broader access to capital and accelerate institutional participation [9][42] - Management highlighted ongoing legal proceedings and receivership situations but expressed confidence in regaining control of properties and the potential for significant revenue from administrative claims [20][25] Other Important Information - The U.S. Court of Appeals for the Third Circuit affirmed the dismissal of a federal securities class action against the company, allowing it to focus on executing its strategy [10] - The company has taken back possession of four California properties previously securing a loan totaling $16.1 million, which was declared in default [8] Q&A Session Summary Question: Dividend expectations and timing of rent commencements - Management discussed the potential contributions from the IQHQ investment and backfill leases to the dividend policy, indicating a quick timeline for revenue from receivership assets [18][20] Question: Balance sheet and refinancing options - Management confirmed plans to refinance maturing unsecured bonds and expressed confidence in the strength of the balance sheet [31][32] Question: Impact of rescheduling on growth opportunities - Management noted that while rescheduling could improve operator credit and cash flow, the company is focused on supporting existing tenants and exploring new opportunities in both cannabis and life sciences [40][46] Question: Current status of ABR and tenant issues - Management reported that approximately 20% of ABR is currently not rent-paying, down from 27% previously, reflecting improvements in tenant health [56][58] Question: Future occupancy expectations at IQHQ - Management expects IQHQ's occupancy to reach 90% within the next 18 to 24 months, with ongoing interest in the facilities [52] Question: Balancing capital needs between cannabis and life sciences - Management emphasized a strong balance sheet and the importance of seeking unique investment opportunities while maintaining a focus on the cannabis industry [60][61]