NewLake Capital Partners (NLCP) Sidoti Micro-Cap Virtual Investor Conference summary

Business overview and strategy

• Operates as a net lease REIT focused exclusively on the cannabis industry, acquiring and leasing cultivation and dispensary properties across 12 states to 13 tenants.

• Portfolio consists of 34 properties with a weighted average yield of 13% and an average lease term exceeding 12 years.

• Maintains a net cash position with minimal leverage and $82 million in available credit capacity, supporting future growth.

• Emphasizes expertise in real estate, cannabis, and financial services, with a management team experienced in both sectors.

• Focuses on limited license states to enhance asset durability and tenant credit quality.

Industry trends and growth drivers

• State legal cannabis market projected to reach $34–$35 billion in 2025, with significant growth potential as more states convert from medical to adult use.

• Younger demographics are driving cannabis as a replacement for alcohol, with only half the U.S. population in adult use markets.

• Federal rescheduling of cannabis from Schedule I to III is expected to eliminate punitive tax rules (280E), improving tenant cash flows and credit quality.

• SAFER Banking Act could enable uplisting to major exchanges, increasing liquidity and institutional investor access.

Portfolio management and risk mitigation

• Underwriting focuses on tenant quality, limited license jurisdictions, and property-level cash flow durability.

• Higher four-wall coverage ratios and a mix of retail and industrial assets support rental cash flow stability.

• Top three tenants (Curaleaf, Cresco, Trulieve) represent over 50% of the portfolio and are leading industry operators.

• Actively manages risk by repositioning underperforming assets and working with tenants to optimize property use.