September 9, 2021 11:11 EST | Source: Power REIT Power REIT

Old Bethpage, New York, USA

The greenhouse will be the largest cannabis planting facility in Michigan and one of the largest cannabis planting facilities in the United States

Old Bethpage, New York, Sept. 09, 2021 (GLOBE NEWSWIRE) - Power REIT (NYSE-AMEX: PW and PW.PRA) ("Power REIT" or "Trust") announced today that it has closed the previous announcement Acquired a greenhouse cultivation facility ("Property") in Marengo Township, Michigan through a wholly-owned subsidiary ("PropCo"). The property occupies approximately 556,000 square feet and is located in the "cannabis coverage area" of Marengo County, allowing unlimited cannabis cultivation licenses. The 61-acre property currently plans to increase by 330,236 square feet and has additional land available for further expansion.

The state-of-the-art "Dutch Venlo style" greenhouse is 26 feet high and helps control the growing environment. The diffused glass roof facilitates plant growth and allows for greater plant density. The greenhouse has advanced cultivation control and first-class irrigation/fertilization system. There are also two large multi-function boilers to heat and help dehumidify the greenhouse and provide higher carbon dioxide levels for crops to increase plant yields. There is a 1 million gallon hot water storage tank that allows the boiler to operate during the day, providing plants with enhanced carbon dioxide for photosynthesis, and then using the stored heat at night or when needed. The greenhouse also includes a special irrigation system with 500,000 gallon feed tanks that can water the entire greenhouse in 20 minutes. The irrigation system is configured with 12 different feed zones. This allows precise crop feeding for each area according to plant growth stage and cultivar. The facility has a highly efficient radiant heating system under the workbench, which can be used as a dual-purpose rail system for trolleys and other equipment to improve labor efficiency.

As part of the transaction, Power REIT has agreed to fund the capital improvement of the property to position it in cannabis cultivation. Power REIT’s current capital commitment for the initial phase of improvement is approximately US$3 million, including costs related to permits and permits, fire suppression, safety, and field work. Power REIT is working with its tenants to finalize the budget that Power REIT will fund additional property improvements and revise the lease accordingly. These improvements are expected to include a light deprivation system that is important to maximize plant yields, drying and curing spaces, a state-of-the-art breeding room, and early plant nurseries for the facility, as well as upgrading facilities that support the needs of employees, such as bathrooms and storage. Locker.

David Lesser, Chairman and CEO of Power REIT, commented: "This is a very exciting transaction for Power REIT-this is our largest acquisition to date and one of our more complex transactions. Thanks to our flexible balance sheet and investment strategy focusing on greenhouses, we were able to opportunistically acquire the property through a takeover process. The property is considered one of the largest cannabis greenhouse cultivation facilities in the United States. The property was previously used for the cultivation of red sweets And demonstrated Power REIT’s ability to strategically reuse the existing greenhouse structure for cannabis cultivation."

At the same time as the acquisition, PropCo and Marengo Cannabis LLC, a wholly-owned subsidiary of Millennium Cannabis LLC ("Millennium Cannabis"), signed a 20-year "triple network" lease ("lease"), allowing the property to be used for cannabis cultivation and Processing facilities. The lease requires Millennium Cannabis to pay all property-related expenses, including maintenance, insurance and taxes. After the initial 20-year period, the lease offers two five-year renewal options and is guaranteed by Millennium Cannabis LLC. Under the terms of the lease, Millennium Cannabis will hold a medical marijuana license and will operate in accordance with all Michigan and municipal regulations. The lease also prohibits the retail of marijuana on the property.

After allowing the initial deferred rent period for renovations, the lease stipulates rent payment, allowing PropCo to obtain a full return on its investment capital in the next three years, after which it provides a yield of approximately 14.7%, and thereafter increases at a rate of 3% each year. According to the structure, the lease provides a straight-line annual rent of approximately US$4.3 million, which is equivalent to an unlevered core FFO yield of approximately 20% of the invested capital.

Millennium Cannabis is a wholly-owned subsidiary of Millennium Investment & Acquisition Co. Inc. (stock code: "MILC"). David H. Lesser, Chairman and CEO of MILC, is also Chairman and CEO of Power REIT. Millennium Cannabis operates three cannabis-growing greenhouse facilities in Oklahoma, Colorado, and Michigan. All three properties are leased from Power REIT, which Power REIT believes represents an attractive strategic alliance. Through the Michigan transaction, Millennium Cannabis now has one of the largest multi-state cannabis cultivation footprints in the United States.

Millennium Cannabis is led by Jared Schrader, who has built a team of more than 50 experienced cannabis growers and operators. Millennium Cannabis hires agricultural experts outside the cannabis industry to incorporate mature cultivation methods of traditional crops into a successful cannabis cultivation business in a low-energy greenhouse environment. Millennium Cannabis shares Power REIT’s argument that greenhouses represent a sustainable solution for growing cannabis at low cost and significantly reduce the carbon footprint compared to expensive indoor warehouse planting facilities that are more typical of the entire cannabis industry.

Millennium Cannabis strategically deploys a wide range of expertise to enable strong local operating partners to apply Millennium Cannabis' proven planting protocols and first-class production methods to meet the changing needs of consumers in the local market. Its partners in Michigan include long-term facility directors previously used by greenhouses, a leading female-owned and minority-owned operations consulting group, more than ten years of experience in creating and leading national legal cannabis operations, and a local A female-owned licensing partner, she was recently responsible for overseeing the regulatory and compliance affairs of the two largest greenhouse operators in the country.

Commenting on the alliance between Power REIT and Millennium Cannabis, David Lesser said: “We believe that the most feasible way for Power REIT at this moment is to cooperate with Millennium Cannabis as a tenant/operator. We have jointly developed a technology focused on greenhouse cultivation. Operate the platform and combine it with the necessary hemp cultivation expertise."

Jared Schrader, President of Millennium Cannabis, commented: "Millennium Cannabis is very pleased to start operations in this truly state-of-the-art greenhouse planting facility. We believe that the property can become a large-scale, low-cost producer and is in a favorable position in the Michigan cannabis market. Competitive position. The nascent Michigan market is experiencing rapid growth, and current pricing is far above the national average. In the short term, this represents an opportunity to generate substantial cash flow. Given our focus on using greenhouse technology to reduce planting costs, we have We are confident that even if prices are inevitably compressed in this market, we can still compete favorably. Therefore, the rent structure of Power REIT is very suitable for long-term sustainable venture capital."

In 2008, Michigan passed the Michigan Cannabis Act, becoming the 10th state to legalize medical marijuana. In 2020, this is its first full-year entertainment sales, and the Michigan market has created a total of $1 billion in legal medical and adult usage revenue. Revenue in 2021 is expected to reach 1.8 billion U.S. dollars, a year-on-year increase of 80%. This will make Michigan the second largest cannabis market in the country, after California.

Non-dilutive capital plan and forward core FFO per share guidance

Power REIT has now used all the funds raised in its recently closed allotment for multiple transactions. These transactions have had a great impact on Core FFO. Power REIT intends to focus on non-dilutive capital in order to fund the property improvement of Michigan properties and the additional needs of other acquisitions. Power REIT is currently focusing on debt and the potential to issue additional preferred stock.

Mr. Lesser continued: “Our latest business plan implemented in the second half of 2019 continues to drive substantial growth. Our dynamic growth depends on the attractive benefits we can achieve through strategic greenhouse investment, plus our relatively small Scale, which magnifies the impact of these transactions. According to our in-place transactions, the recent stock price is $44.92, the forward core FFO operating rate is $3.59 per share, and there is no additional growth. Power REIT has a P/E ratio of 12.5. We believe , We can continue to drive significant additional growth through acquisitions by using non-dilutable capital and reinvesting capital from our unique leasing structure, which has prepaid rents that can return Power REIT’s investment capital in the early stages of leasing. We We believe that our potential growth rate driven by acquisitions coupled with relatively low forward core FFO multiples provide investors with a compelling value proposition. We have an active acquisition channel and hope to announce more in the near future activity."

Power REIT has released an updated investor profile, which can be obtained using the following link: https://www.pwreit.com/investors

Power REIT owns real estate related to infrastructure assets, including real estate for controlled environment agricultural facilities, with a focus on greenhouses, renewable energy and transportation.

The CEA facility in the form of a greenhouse provides an extremely environmentally friendly solution that consumes approximately 70% less energy than indoor planting operations that do not benefit from "free" sunlight. The greenhouse uses 90% less water than the plants grown in the field, and all of Power REIT's greenhouse assets operate without the use of pesticides and avoid agricultural runoff from fertilizers and pesticides. These facilities cultivate medical marijuana and have been recommended to help manage countless medical symptoms, including epilepsy and convulsions, multiple sclerosis, post-traumatic stress disorder, migraine, arthritis, Parkinson’s disease and Alzheimer’s disease .

Renewable energy assets include land and infrastructure related to utility-scale solar farms. These projects generate electricity without using fossil fuels, thereby reducing carbon emissions. The solar farm generates approximately 50,000,000 kilowatt-hours of electricity each year, which is enough to provide carbon-free electricity to approximately 4,600 households.

Transportation assets include railway-related land, which is an environmentally friendly bulk transportation method.

Power REIT focuses on the "triple bottom line" and its commitment to profit, the planet and humanity. It is a professional real estate investment trust (REIT) that owns sustainable real estate related to infrastructure assets, including controlled environment agriculture and renewable energy. Property and transportation. Power REIT is actively seeking to expand its real estate portfolio related to controlled environment agriculture in the form of greenhouses to grow food and hemp.

For more information about Power REIT, please visit its website: www.pwreit.com

About Millennium Investment Acquisition Co., Ltd.

Millennium Investment and Acquisition Co. Inc. (stock code: MILC) is an internally managed, non-diversified, closed investment company. In 2020, MILC announced that it is seeking to deregister as an investment company regulated by the Investment Company Act of 1940. MILC is currently seeking an order from the US Securities and Exchange Commission to announce that it is no longer an investment company because it is no longer an investment company. In line with the definition of self-assessment investment, it shifts to focus on direct investment in business operations.

MILC is currently focusing on opportunities for sustainable cannabis cultivation and sustainable production of activated carbon.

For more information about MILC, please visit its website: www.millinvestment.com

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