Vireo Growth Completes Purchase of Leased NY Cannabis Facility

MINNEAPOLIS – Vireo Growth Inc. has completed the acquisition of its Johnstown, New York Cannabis production facility from Innovative Industrial Properties, Inc., paying $88.5 million for the 389,000-square-foot cultivation and production site previously held under a lease between Vireo Health of New York, LLC and IIP subsidiary IIP-NY 2 LLC.

The transaction was structured through a newly formed subsidiary, 256 County Route 117 Perth LLC, which served as the acquiring entity. The deal was funded in two parts: IIP provided seller financing of $49 million, while Chicago Atlantic Financial Services, LLC supplied the remaining $41 million.

The seller note carries a 15% annual interest rate, matures on May 25, 2027, and includes two one-year extension options. It is secured by a first-priority mortgage on the property and guaranteed by Vireo Growth Inc. The Chicago Atlantic loan is secured by a second-priority mortgage, subordinate to the seller note under an intercreditor agreement, and is guaranteed by Vireo Health, Inc., a Vireo Growth subsidiary.

The Johnstown facility has a complicated ownership history that predates Vireo Growth’s current corporate structure. The property dates back to a 2021 sale-leaseback between Goodness Growth Holdings and IIP, in which Goodness Growth sold approximately 92.3 acres of land adjacent to its existing Johnstown Cannabis operations [a site formerly occupied by a juvenile detention center] and IIP funded construction of a 324,000-square-foot indoor facility. Vireo Growth inherited the lease arrangement following subsequent corporate transactions.

For Vireo, the New York venture is one piece of a notably active 2026. Earlier this year, the company announced plans to acquire FLUENT in an all-stock transaction, entered a California retail JV with Glass House Brands, and agreed to acquire Bridgewell Agribusiness in a deal valued at approximately $40 million. First quarter 2026 GAAP revenue reached $106.2 million, up more than 330% year-over-year, driven by recently closed M&A transactions.

Vireo’s Johnstown purchase is instructive on two levels.

First, it illustrates how the sale-leaseback model [a financing lifeline widely used across the Cannabis sector when federal banking access was tightly restricted] is now being unwound by operators confident enough in their balance sheets to absorb the debt directly.
Second, the deal’s financing structure, with IIP itself holding the senior note at 15% interest, is a reminder that even in ownership transitions, the REIT stays in the picture, at least until May 2027.

For Vireo, eliminating the lease obligation and gaining direct title to one of New York’s largest Cannabis facilities signals operational consolidation that goes hand in hand with its broader, fast-moving acquisition strategy. Heading into H2 2026, a more relevant question will be whether the company can service that debt load while simultaneously integrating multiple new businesses.