NewLake Capital Partners (NLCP) investor relations material

Business overview and strategy

• Focuses exclusively on cannabis real estate, owning 34 properties across 12 states with 13 tenants, including major operators representing about 50% of rental streams.

• Portfolio includes 15 indoor cultivation facilities and 19 dispensaries, with leases typically lasting 15–20 years and an average of 12 years remaining.

• Achieves above-market rental yields in the low teens percent, driven by limited access to traditional banking and capital for the cannabis sector.

• Maintains a nearly 12% dividend yield, with a 90% AFFO payout ratio and a net cash position, making it one of the least-levered REITs in the market.

• Emphasizes quality growth over rapid expansion, focusing on limited-license jurisdictions and property-level cash flows.

Market dynamics and regulatory catalysts

• Recent federal rescheduling of medical cannabis to Schedule III has made 50% of the tenant base federally legal, reducing tax burdens and improving cash flow.

• Ongoing DEA hearings may further reschedule adult-use cannabis, potentially making the entire business federally legal and enabling up-listing to major exchanges.

• State-level bans on hemp-derived THC products, such as in Ohio, have led to immediate sales growth for dispensaries, supporting tenant revenue.

• Legislative efforts like the CLIMB Act and SAFER, as well as a pending Supreme Court case, could further impact the sector.

• Large states like Texas and Georgia are expanding medical programs, offering significant future growth potential.

Growth avenues and financial management

• Growth is driven by contractual rent escalators averaging 2.6% annually, tenant improvements, leasing of vacant properties, and new transactions.

• Maintains a conservative capital structure, with plans to use available credit facilities for expansion before considering equity issuance.

• Most leases have fixed escalators rather than inflation adjusters, justified by already high yields.

• Focuses on limited-license states to ensure fewer competitors and stronger property-level cash flows.

• Underwriting discipline and avoidance of over-leverage have differentiated the portfolio and supported long-term stability.