$Innovative Industrial Properties Inc (IIPR.US)$ shares are trading 20% lower after the company disclosed that PharmaCann Inc. defaulted on rent payments for several of its leased properties.

On December 19, PharmaCann defaulted on its obligations to pay rent for the month of December under six of eleven leases, representing properties in Illinois, Massachusetts, Michigan, New York, Ohio, and Pennsylvania.

The total rent, including base rent, property management fees, and estimated tax and insurance payments, amounted to $4.2 million for these six properties. In response, IIP applied the security deposits held under these leases to cover the outstanding rent, along with late penalties and interest.

Despite PharmaCann paying rent in full under the remaining five leases, it also defaulted on those due to cross-default provisions in the leases.

PharmaCann and its affiliates, tenants for eleven properties that IIP owns, represented 17% of IIP's total rental revenues for the three and nine months ended September 30, 2024.

As a result, Innovative Industrial Properties said it is pursuing discussions with PharmaCann and intends to enforce its rights under the leases, which could include eviction proceedings if deemed necessary.

Earlier this month, Innovative Industrial Properties announced a fourth-quarter 2024 dividend of $1.90 per common share, representing an annualized dividend of $7.60 per share.

Additionally, the company declared a regular quarterly dividend of $0.5625 per share of its 9.00% Series A Cumulative Redeemable Preferred Stock, both of which are payable on January 15.