Power REIT (NYSE-A:PW) Corp. said it has entered into a lease amendment to fund additional capital improvements to its existing greenhouse cultivation property, Sweet Dirt, in York County, Maine.
Under the amendment, Power REIT will fund the installation of a highly energy-efficient onsite power generation and cooling system, the company said.
Power REIT's total capital commitment related to these improvements is approximately $3,500,000, which increases the straight-line annual rent by approximately $654,000, representing an approximately 19% unleveraged core FFO yield.
The approximately 48,000 square-foot facility sits on six acres and is leased to a leading vertically integrated cannabis company in Maine.
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Sweet Dirt will benefit from installing a Combined Heat and Power system at its property, whereby it will generate its own electricity and recover the heat produced as a by-product of the electricity production and make that a usable energy source. This allows the Sweet Dirt facility to offset running other equipment for heating the facility.
In addition to the heat that will be used for heating the greenhouse, the project includes an absorption chiller which can create cooling from the heat produced by the cogeneration system through an evaporative process.
"These improvements to this greenhouse cultivation facility will allow Sweet Dirt to take their operations to the next level in an energy-efficient manner, Power REIT has a significant focus on sustainability and cogeneration is a way to lower the overall carbon footprint of the greenhouse while also lowering its cost of operations and enhancing production yields,” David Lesser, chairman and CEO of Power REIT said in a statement
Apart from operating the greenhouse facility, Sweet Dirt also operates three retail locations with plans to open two more stores in the second quarter. There are also plans for an extraction facility to open in Summer/Fall 2022. Sweet Dirt has grown significantly, now employing more than 130 employees. After a strong 2021, generating a record year of revenues, Sweet Dirt captured a considerable portion of the total Maine Adult Use market share with Maine's only Certified Clean Adult-Use cannabis.
Jim Henry, CEO of Sweet Dirt commented: "Leading in the cannabis industry in the state of Maine means focusing on not just financial success, but also on what's best for Maine and Mainers. Adding this energy efficiency project to our cultivation and manufacturing campus will allow us to accelerate our growth in an environmentally friendly and cost-effective manner. We remain committed to becoming a large-scale producer of premium, high-quality cannabis-related products to meet the growing demand in Maine. We evaluated many options for implementing this project and ultimately concluded that IntelliGen Power Systems was the best option for us."
Power REIT is a specialized real estate investment trust (REIT) that owns sustainable real estate related to infrastructure assets, including properties for Controlled Environment Agriculture, Renewable Energy and Transportation. Power REIT is actively seeking to expand its real estate portfolio related to Controlled Environment Agriculture in the form of greenhouses for the cultivation of food and cannabis.
Contact the author at jon.hopkins@proactiveinvestors.com