Good afternoon, everybody. It's Pablo Zuanic, Equity Analyst at Zuanic & Associates. I have the pleasure of introducing the CEO of NewLake Capital Partners, the sale- leaseback operator, Anthony Coniglio. Anthony, welcome. Hi, Pablo. How are you? Doing fine, doing fine. Look, I mean, we're all waiting for the—w ell, we were waiting for January 31st, right? But now we're waiting, I guess, for February 15, for February 28th, but we'll get to that. The focus of the call for the audience is about, you know, sale-leaseback, about the NewLake Capital Partners business, the, what, what the stock can offer in the current macro context. And of course, we'll also touch on macro themes like rescheduling. Anthony, a brief introduction about NewLake, for those who are not so familiar with the, with the company. If you can, you know, try to benchmark your company in general, top-down terms, your performance, growth, book, profitability, defaults, versus other, the other sale-leaseback operator in cannabis, IIPR, versus non-cannabis sale-leaseback operators, and then we'll come back to more NewLake specific questions later on. Whatever color you can give there would be good here at the start. Thank you. Great. Well, Pablo, thanks for having me. There's a lot there. We'll, we'll get to all of that. If I miss some of what you ask, please— I'm sure you'll redirect me. So for those that aren't familiar with our company, NewLake Capital Partners is a net lease REIT. We are the second largest owner of cannabis real estate in the U.S., and we're a sale- leaseback REIT. And what that means is that we purchase properties from and for cannabis operators, and we enter into long-term leases for them to operate, whether it be a cultivation, processing, or a dispensary at that particular property. And to give you a sense, we have a 12-year remaining weighted average lease term, and so you can see that there's a meaningful amount of duration. I'm sure we'll get to that more later. And we also have a yield on our leased portfolio of approximately 13%. And so if you're in the real estate world, you'd be talking cap rates. When you think about cap rates, having a cap rate that averages across the lease portfolio of about 13% is above market. I think that reflects the risk that we take by focusing on the cannabis sector. You know, listen, our business model, as you know, Pablo, is very simple. We enter into long-term leases, we collect monthly rent, and as a real estate investment trust or REIT, we're required to pay out quarterly distributions to our investors. So we collect rent, we pay out a dividend on a quarterly basis. As we sit here today, we own 34 properties across 12 states, with about 15 of those properties structured or built for cultivation capacity, and the other 19 of those properties are dispensaries. Our top three tenants, to give folks a sense for it, would be names like Curaleaf, Cresco, and Trulieve. And that represents about half of our annualized base rent. To give you a little bit more color on the business, founded in 2019, so we've been at it for a while. Been at it for about seven years now. I think we're one of the older ones that have been focused on the space. We went public in 2021, and since becoming a public company, to give you some sense, we've grown our dividend about 80% since our IPO in mid-2021. So we had significant growth with the marketplace. I will say that that growth has somewhat leveled off, as we've been a bit more judicious in the deals that we've been looking to do over the last couple of years, as we've seen the sentiment and the environment for cannabis, let's just say, soften. I'm sure we'll get into that. I'm sure we will get into that. So, non-cannabis REITs, you asked me to compare ourselves to non-cannabis REITs. If you look at non-cannabis REITs, their yield tends to be lower. It's a different risk profile. There are REITs out there that focus, say, on retail-only facilities or industrial facilities or cell towers. These are regular way real estate categories that may have cap rates in the 6%-7% range, more average around 6%, 6.5%, to give you a sense. So we're meaningfully above that, and again, we're taking significant risk. In terms of comparing ourselves to IIPR, as you asked, we do the same thing as they do. Now, they've made an additional investment outside of cannabis. We've not done that. We've announced that we always evaluate deals outside of cannabis to look for quality opportunities for our investors, but we've not made any investments outside of outside of cannabis. But pretty much the same type of modeling. You might be getting to this, but some people would say, "Well, geez, Anthony, why are they listed on the New York Stock Exchange and you're only on OTC?" Well, we operate our business to list on the New York and Nasdaq, but they won't have us because we focus on cannabis exclusively. IIPR went public before the rules changed, and they were grandfathered onto the New York Stock Exchange. They weren't kicked off, so to speak. So that's a little bit of a difference. Well, that's, that's great color. And then just, one quick follow-up in terms of the comparison with the non-cannabis sale-leaseback operators. Do you have a sense of where they are in terms of dividend yields or maybe, discount to NAV? Any color there? Yeah, you would look that they generally trade around that net asset value, some a little bit above, some a little bit below, and their dividend yields for the net lease REITs would be in the mid-single digits. Call it somewhere around a 6%-7% dividend yield. And I'm sure we'll get an opportunity for me to talk about why our dividend yield is so much higher and, you know, how we think about that and how we think investors should think about that. Yeah. No, that's good. That's great. Thank you. That's great color on NewLake. I mean, we'll touch on macro themes now, and then we'll come back to NewLake later on. But just talking about the what I call the finance company sector in general, right? And there I'm talking, for those who are not so familiar, maybe explain the differences between sale-leaseback operators and mortgage REITs and BDCs, you know, in terms of duration, in terms of interest rate exposure, in terms of what you offer, right, versus those. And then by the same token, when does it make sense for the borrower, in this case, cannabis operators, when does it make sense to be choosing between your services, a mortgage REIT, or a BDC? Because it would seem like you're competing for the same buy, but to some extent, perhaps it's a different track, right? So if you can give color there. Let's start with that first. Yeah, I, listen, I think it's a great question, and it actually creates some confusion in the investor base because people think of these business models as competitors, and that is true to some extent, but by and large, I think of these as separate products that are appropriate for different situations and different transaction objectives. So let me go a little bit deeper there. If I think about BDCs or business development companies, they're generally more focused on underwriting cash flow and looking more like a private credit investor. They have regulated leverage, and they tend to be more hands-on or have a more hands-on approach to monitoring the investments and being involved, not necessarily in the day-to-day decision making, excuse me, but they generally are more involved in an active dialogue with the management teams. They tend to be shorter duration. For mortgage REITs, those are organizations that focus on transactions with real estate as the underlying collateral. So yes, they're also looking at cash flow profiles of the companies, but they're valuing the underlying collateral of the real estate that the company owns, and they're making an advance based off of that real estate. And then compare that to us as a sale-leaseback REIT, we acquire the property for that full price. We acquire the property, and then we lease it back on a long-term basis. And as I said earlier, we have a 12-year remaining weighted average lease term. You know, we'll enter into 15- to 20-year leases, or maybe a little bit shorter on the dispensary side, but if you're a BDC or a mortgage REIT, you tend to enter into two-, four-, or five-year transactions, so it's shorter duration. So when I get to this concept of they're for different scenarios, I think it really it depends on what the company's objective is to determine which lever they want to pull. I think if they're if they believe that there's something transformative that will change their cost of capital in the very near term, they may opt for a shorter duration product like a BDC or a mortgage REIT. If they don't have real estate, well, then obviously a mortgage REIT or a sale-leaseback REIT doesn't make sense. They'd need more of that cash flow lending directly from a BDC. If they're proceeds focused, so if they own a piece of real estate and getting it from a lender for a two- or three-year period would only result in a 75% advance rate, by selling it to a sale-leaseback REIT, you typically can maximize your proceeds and get, in that example, say, 100 cents on the dollar. So if you're proceed- sensitive, you may indeed want to do that. If you have other maturities coming up, you may decide that you don't have the ability, or you don't want to have the bandwidth, or the suck on your time two to three years from now to go out and have to refinance or worry about refinancing, and you might like to put away this part of the capital structure. And so those are the primary differences. I'd say that it's the fact that we own the underlying property, we have a longer duration, and we tend to give greater proceeds, and in many cases, that works for people. In other cases, it doesn't work. The last point I'd say on this is look outside of the cannabis sector and look at regular way industries, and you see companies like FedEx, Starbucks, Walgreens, Home Depot, industrial and retail business or, or I should say, businesses that utilize industrial and retail properties, and they're utilizing sale-leaseback as a component to fund their real estate needs. Some of them are also using potentially real estate borrowing facilities as well as general credit facilities and maybe high yield or high-grade bonds to fund their capital structure. It really, I think, depends on the situation, and each product fits for a company's needs at a particular time. Again, that's great color. Look, just a couple of quick follow-ups there. One, you know, why is it that sale-leaseback hasn't made inroads in the Canadian market, right? There's a lot of cultivation there. There's been a capacity that needed to be funded. Was it just that there was a lot of capital available? Because as you said, in the U.S., in the non-cannabis sector, sale-leaseback is also a common way of financing your business, right? Why is it that sale-leaseback hasn't made inroads in Canada, or is that an opportunity later on for yourselves? Well, I think the opportunity internationally, maybe we can get to talking about internationally. The opportunity internationally is there. In fact, we are going to look at a deal that was recently sent to us in Canada. But why I think that it hasn't been a greater opportunity is because the significant growth in the Canadian real estate needs around cannabis coincided with the legalization in Canada of cannabis. And so that meant that the organizations could have direct access to the banks, and in the early days, I think those, some of those banks stepped up. I also think, and it's probably a more relevant point, is the one you made, which was there was a lot of capital available, and so a lot of these organizations had the excess capital available to be able to put into these facilities. We've seen, I think over the last couple of years, we've seen some sales of those properties, not necessarily in sale-leaseback structures, but sales of those properties as they've downsized their operations, and they've sought to optimize their capital structure. One last one, just on the same topic. You know, again, for the borrower, and I know it's very difficult to talk apples to apples, every case is different. But in terms of cost for the borrower, whether you're looking at a BDC, they are looking at a mortgage REIT, or they're looking at a sale-leaseback, what would be the difference in cost? And I know there's a difference in duration, but maybe it's not the right way to think about it, right? But is sale-leaseback typically going to be cheaper, but you're just in it for the long term, for a longer period of time? How do you think about that, or how should your operator think about that? I think typically the entry cap rate for a sale-leaseback transaction is less than the coupon that you would pay on a mortgage REIT transaction or a BDC transaction. And there's reasons for that, because we actually own the property, right? So if there's a default, we can put the tenant out of the facility. We own the property. We don't have to go through foreclosure. So our risk profile is different. And from the operator perspective, if they believe, again, that their cost of capital would come down significantly, then they would say, "I don't wanna lock in a longer duration cap rate of, call it 12%. I'd rather pay maybe 15% of a coupon for 3 years, thinking that my, my cost of capital will go down significantly." And in fact, back in 2021 and 2022, we had this very conversation with folks. In 2021, a lot of organizations stepped away from what would have been 11, 11.5 cap rate transactions, only to take mid-teens debt, thinking that by 2024, they were gonna be 300 basis points-400 basis points cheaper, if not more, on a borrowing basis. But yet, you know, that never materialized for the industry. That's not specific to those companies, that never materialized for the industry. And so the borrowing rates in the industry have maintained high. So from a cash flow perspective and from a cost of capital perspective, for many of those, it would have been more beneficial to execute sale-leaseback transactions than to enter into the higher rate debt transactions. And again, you know, some people weren't price sensitive, so maybe it was better off. So the short answer to your question is, we're typically lower, but because it's longer duration, I think some people decide they want to pay the higher for the near term with the expectation that they'll be repriced pretty quickly. Right. But on that same point, in the current environment that we're seeing interest rates come down, right? We don't know when the next rate cut will come, but the assumption is that interest rates will continue to come down. Does that put pressure in the sale-leaseback business compared to those shorter duration products, right now, in the current context? No, I don't, I don't think so, because you look at the disclosures for some of those others, and there's a meaningful portion of those transactions are fixed rate transactions. You know, even for the floating rate ones, you get another 25 basis points or even 50 basis points. When your borrowing rate is 12%, 13%, 14%, yes, every little bit helps, but I don't think that's a meaningful component of the decision tree for people. Yeah. And before we move on, just in terms of the sentiment on the sector in general, in terms of finance companies, not just cannabis, does the current malaise, some people use that term, sentiment-wise, on private credit, also impact sale-leaseback operators? If you can touch on that. And also, how does the current macro, you know, volatile macro climate from an economic and geopolitical point of view, impact the sale-leaseback operators? Or is it just a more steady sector that's less impacted by those type of issues? Yeah, I don't think sentiment around private credit really impacts, you know, NewLake or even those that operate in the cannabis industry. I mean, there are a few of us left that are focused on this sector and providing capital to the sector. And I think that the availability and pricing of that capital is really focused on the quality of the portfolios and quality of the business that's being done, and not so much on some of that externalized input that you're referring to. I think, you know, for others outside of this industry, maybe it has an impact. I don't think it really has a meaningful impact on us. Right. Just moving on, but similar conversation. In terms of the pitch to investors, right? I can go and buy a cannabis mortgage REIT, a cannabis BDC, or a cannabis sale-leaseback operator. What's the pitch to investors in that sense, sector-wise, not so much— Yeah, sector-wise. Listen, I think it's a different way for people to express a view on cannabis and to play cannabis reform. I think if you focus on a yield-oriented product like a REIT model, whether it's equity REIT, mortgage REIT, or like a BDC, I think you're getting current income on a quarterly basis, to compensate you while you're waiting for that catalyst to occur. Because these are asset-heavy businesses, I think the volatility, both downside and upside, is less than if you were to go into a direct operator. So while you will get paid for that patience, and you'll benefit from reform, in my opinion, from these yield-oriented investor investments that focus on the cannabis sector, you won't get the 5x or 6x or 10x that people are hoping on some of the cannabis operators that will occur over time. I think you'll get certainly appreciation in share prices as demand for shares go up, and you see the way a lot of these platforms are trading relative to their NAV or relative to the dividend yield, which I hope we get an opportunity to talk about. So there's upside to the share prices, but it's not gonna be a 2x or a 3x. It kind of would be like having your cake and eating it, too. Getting paid current income, taking chips off the table, so to speak, while also having that upside. Good. So let's touch on that, you've talked about the dividend income. So now comparing, NewLake as an investment for a, you know, retail investor or an institutional investor, so they are, versus investing directly in plant-touching cannabis stocks. I mean, how would you make that comparison? You just made a comparison between BDC, between mortgage REIT, but now let's compare an investment in, in NewLake versus investing directly in a plant-touching stock. Yeah, again, it's more of what I just mentioned. I'd say it's more of what I just mentioned. mentioned. I think the stock price is lower volatility than you would have from the plant-touching businesses. I think that when we consider reform, when we think about new investors coming into the sector and paying attention to cannabis, and even ultimately capital providers stepping in, I think you'll see that, by and large, the REITs will end up benefiting their cost of capital first before the operators. Because those that come in are more likely to wanna put capital with a diversified portfolio of commercial real estate or a collateralized lending portfolio, say in the case of a BDC. And so that'll allow us to decrease our cost of capital as we look to serve the industry and do new transactions. And the operators, again, I think will take a little time. And that's what we saw in 2021 and 2022. A lot of the facilities that were announced, I think the REITs and the BDCs tended to lead that before those, by and large, became widely available to the sector itself. So it makes sense. If you're a bank risk manager, you're gonna feel more comfortable with a diversified portfolio of commercial real estate than you will with a particular company and their operations. And so, you know, again, it's that, do I get paid current income to wait and potentially benefit from the catalysts? Or do I go with the higher volatility and potentially have greater upside, but not get paid anything while I wait for that? But on that point, again, I'm talking to investors out there, right? So the dividend yield is in the low teens, right? Low, mid-teens sometimes. So very attractive in that sense. But there's been some volatility also in the NAV, right? On the discount to NAV. I mean, how would you—w hat's causing that? Is it just market inefficiencies or lack of liquidity? Or are we at a level, I know we cannot forward guide, but are we at a level where the discount to NAV is unlikely to worsen? How would you think about that? Well, if you look at the balance sheet, the NAV, on the face of the balance sheet hasn't been volatile. It's been —the NAV per share has been— The discount to NAV, sorry. This is more a function of the stock price, right? Which is also, you know, impacting that dividend yield. Yeah. And so when we look at the dividend yield. So I don't think that there's a story around the discount to NAV. I think when people look at REITs in general, they're looking at more of a yield play, and they're looking at: What's the yield I'm getting paid relative to the risk profile? And sure, people do look at NAV, but I think more for us, people are focusing on that yield as opposed to the NAV. And when we look at our yield, and you look at a high yield like this, particularly when the other non-cannabis REITs are trading in that mid-single digits range on a dividend yield, and people see a double-digit dividend yield, two things come to mind. One is they think there's a leverage problem, and two, they think there's a dividend cut around the corner. So why don't we address both of those? You know, number one, from a leverage perspective, NewLake has a little over $7 million outstanding on over a $400 million balance sheet. In fact, we're in a net cash position, because if you take the over $20 million of cash we had on the balance sheet, we have net cash on the balance sheet, right? We just pay down the debt tomorrow. So, very few REITs that are in a net cash position, that have such little leverage. So it's not a leverage issue, and we do have available capacity under our $90 million facility to be able to do new transactions and grow the portfolio. So clearly it's not a leverage. So then it must be a dividend issue. If you look at the most recent quarter that we announced, an 82% payout ratio. And so for those that are not familiar with real estate investment trusts or REITs, the key measure for us is AFFO, or available funds from operations. That is our measure of free cash flow. And as a REIT, we are required under the law to distribute a minimum of 90% of our taxable income. But because we have significant depreciation, that's never really an issue. We target a payout of our free cash flow between 80% and 90%. So at 82% payout ratio in the third quarter, and we did make commentary, I think you even asked a question on our call. We made commentary that with Ayr coming back into the portfolio as a vacancy, that we were going to see that payout ratio drift over the fourth quarter and into the first quarter to get up closer to 90%. And so still expect it to be within that range, between 80% and 90%. So we could also absorb additional delinquencies, additional issues in the portfolio and still have room before we start to exceed our cash flow. So having a well-covered dividend is something that I think when we talk about high dividend yields and worrying about dividend cuts, that people have. Now, there are some out there that when you look at their payout ratio, it's well in excess of 100%. So that would mean that some of the competitors out there have not enough cash flow to actually pay their dividend, which means they're utilizing capital to meet the dividend obligation, and that's not sustainable. And so in those cases, investors say, "Well, I expect that dividend will need to get cut," because typically, REITs should not be paying out more than their free cash flow. And so I think we get painted a little bit with that as well. And so, people then ask, "Well, if it's not leverage, and if it's not dividend, then why are you trading at this high yield?" And I think it's because we are trading on the OTC. Again, we qualify in all respects to be New York and Nasdaq, but I think the fact that there is limited institutional demand for NewLake stock because of the custody issues that a lot of people have talked about, because of the custody issues, I think that limits the amount of institutional investor base that is available to recognize that high dividend yield disconnected with the reality of where the balance sheet is and what our payout ratio is. And look, I mean, the last question in terms of, on the same topic, and I'm sorry to go back to it, but, in terms of talking to investors, right? Let's say I'm an investor, I'm looking at buying NewLake shares, just very focused on the dividend yield, attractive, well-covered, like you mentioned. But I think as an investor, I also can be worried about the discount to NAV, right? This is not a fixed income security, and although your NAV has been stable for the most part, right, the discount has moved, right? So as an investor, if I'm coming to the stock, but not fully educated on the story, right, I'm looking at that mid- low mid-teens dividend yield. Should I worry that the discount to NAV could expand, or what could cause that discount? Or maybe it's pretty safe. There's not much room for it to expand in terms of discount to NAV. Listen, any investor that's looking at an investment in NewLake or any other company should worry about it at all, right? So absolutely they should be looking at that. So let's talk about what impacts net asset value per share. It's obviously the share price going up or down on a constant NAV. The other aspect that'll impact that would be if we were to sell a property at a loss, right? And so when we book, we're not marking up the value of our assets, right? Our assets are booked at our acquisition cost. And we're depreciating those assets, you know, over the standard 38-year depreciation. And so the things that could impact that NAV would, on our balance sheet, would be if we were to take an impairment, if we were to sell a property at a loss. Those are the types of things. But I believe when you look at investing in REITs, you should be looking at that yield. I just keep coming back to it. And so the value of our properties, if we're getting a 12% yield, 12.5% or 13% yield off of our rented properties, that's much more valuable than if the same properties were rented out at a 6% yield, if we were focusing on car washes, as an example, or we were focusing on strip malls, where maybe that yield is less. So obviously, if a property can generate more cash flow over a longer period of time, that property should be worth more. Okay. Got it. Thank you. Look, I'm gonna shift the conversation now in terms of opportunities for you outside of plant-touching companies in the U.S. I want to ask a few, and you can touch on them. Would you enter tenancy agreements outside cannabis? You mentioned them at the beginning, I think you may be looking at them. Can you like deal with—c an you also deal with non-touching, non-plant touching companies in the cannabis ecosystem? I don't know if still this one would apply to a company, you know, offering picks and shovel services or tech services or others. Do you see opportunities for NewLake in the hemp industry, or is that off limits due to clear regulations? Could you also enter deals with customers outside the U.S., right? You mentioned Canada, what about Europe? If you can touch on all of that, please. Yeah. Quick answer, and then I'll go into detail, is yes to all of it, except for hemp, and we'll, we'll talk about it. So the first was outside of cannabis. We were asked a question during the third quarter about do we ever look at deals outside of the cannabis sector, and the answer is yes. But I want to be clear, it's not a haphazard, "Hey, we'll look at anything." We think that we've built a core competency, excuse me, a core competency around, complex operating businesses that are highly regulated and often out of favor with mainline, mainline funding organizations. And so we're looking to extend, we're looking to extend that capability to other asset classes, and so that's the screen through which we are evaluating other opportunities. And so we, we've been doing that for a while, and we always do that. In terms of non-plant touching companies in the cannabis ecosystem, for sure, yes. I mean, there's less real estate requirement for the non-plant touching companies, you know, particularly if you're a software provider, if you're a Flowhub or if you're, you know, some of the other organizations, very, very light real estate footprint— Right. That is typically more office space than it is industrial, or retail. But yes, no, no reason we couldn't provide capital to those organizations. And then you mentioned overseas, and then we'll finish up with hemp. You mentioned overseas, yes. You know, you and I saw each other in Europe a couple of times last year. We've been paying attention to that market for about 18 months now, watching it. We've even looked at a couple of deals, whether it be in Germany or in Portugal. In Canada, we've looked at some as well. You know, the cannabis industry is international, but it continues to evolve, and one of the reasons we haven't yet pulled the trigger internationally is because I think the sands are still shifting when it comes to a regulatory environment. So even in Germany, where there's a lot of excitement and there's a lot of growth, I still think that you could see a regulatory structure that's different three years from now in Germany than it is today. It doesn't mean that they'll roll back adult use, but that does have an impact, depending on the regulatory structure, it does have an impact on a particular property and its value in the cannabis ecosystem for that jurisdiction. So yes, we're always looking at international opportunities. And then lastly, on hemp. I just think it's way too much volatility for us to spend time looking at hemp right now. There's an existential risk on the horizon. I think it's November 12th. Maybe it's extended, maybe it doesn't. How do you underwrite that? And so for us right now, we're gonna hold off on focusing on those types of opportunities. And just on the point on Europe, you know, although Germany continues to grow, what we are seeing is just imports grow, right? And more Canadian producers expanding capacity in the case of, in Canada or even, you know, acquiring capacity. So there, I wouldn't be surprised to see opportunities for you all in Canada. So just moving on now to rescheduling. We want to touch on it from different points of view, but first, the impact from the positive cannabis regulatory news flow in your business, is there more demand for your services, let's say, since December 18th, because of the announcements that came out of the White House? And also, while operator cash flow should improve because of the removal of 280E and the increasing credit quality of your tenants—t here could also be more competition, right, from other credit suppliers. I mean, I don't know if this is true or not, but what are you seeing so far, in terms of, demand for your services, and given the positive news flow, and more competition potentially on the, on the credit side? Yeah. So it's still new. Let's remember, this is only six or seven weeks, well, six, there I go, right, six, seven. Six or seven weeks ago, the announcement happened, and then we had holidays in between. I would say there's definitely more chatter. We've seen just the level of dialogue we're having with different participants in cannabis is definitely elevated over the course of January. Does that result in future deal flow? Yeah, it probably does. You know, we look at Schedule III really as the, as the catalyst. It's a catalyst for so many things. It's a catalyst for potential credit improvement. It's a catalyst for new investors to come into the sector. It's a catalyst for states to expand medical programs, catalyst for states to potentially convert from medical to adult use. New states to adopt a medical cannabis program, and so that'll lead to, we think, a series of opportunities over the course of 2026 and 2027. And so it's an undeniable positive to have had that executive order. The reason I say chatter and not deal activity is because I still think this is very much a, "Hey, we've got an executive order, but we need to see it filed." Right. I think people certainly expect that there will be lawsuits once the final rule is filed in the Federal Register. But people want to see the rule get filed in the Federal Register, so it's not just another politician saying, "Hey, we're going to do this," without getting that actual real reform. Now, I think most of, most people believe that will happen, and as you started this segment off, we, you started off with, "Well, people were waiting for January 31st. Is it February 15th?" You know, who knows? None of us know. But I do believe it'll happen. I really, truly do believe it'll happen, and that's when I think that chatter converts into more tangible opportunities. Right. And on the same topic, right, and this is an assumption: Let's say we get a final rule by December, by February 28th. When does Schedule III become effective for trading purposes? And from what you are hearing, there's some debate on that. Does 280E get removed from January 1? Does it get removed from the day of the final rule, or do we have to wait for it to be enacted after the litigation is cleared? What, what, what's your opinion in that regard? That's certainly a question for a tax accountant. Based on the conversations we've had, it would apply for the tax year. That's what I've heard. Now, I think that could be a fluid conversation. I think it depends what is filed, if anything is filed in the Federal Register, or if there's any guidance that that comes out with that. But, you know, that's what I've heard most people talk about, which is when you look at 280E, it says that you can't deduct—i t doesn't say for the day specific. It just says you can't deduct for it. And so, unless there's a specific date in there related to 280E, I think people will take the liberty and assume it's for the full taxable year, and then let the IRS come back and tell them otherwise. One more. I know this is again, a question for a tax accountant, but just what you are hearing or what you think, any predictions on what happens to the unpaid portion of past 280E tax liabilities, on the balance sheets? Most operators, they call them, long-term uncertain tax benefits. Is that a pardon, a full pardon, a haircut, restructuring payment plans? What, how, how do you see that happening? Yeah. So here I have an opinion. I don't think it's a free lunch at all. I think the IRS is going to want to get paid for the past taxes. I think that the IRS is not in the business of putting companies out of business, otherwise they won't get paid. So my best guess is that we will see deals cut, and there'll be payment plans for those past taxes for the IRS to get paid over time. Now, I know there's some court cases where people are challenging the applicability of 280E to the IRS. I'll leave it for those legal folks to argue if there's really something there to win. We hope they do, because that would be a huge win for the sector. We're, you know, our underwriting and our approach is the expectation that the bill will need to get paid. It just will become an installment loan that'll get paid over time, and probably sized with the expected cash flows, that organization, and in some cases, maybe even discounted for the expected cash flows. Okay. And obviously, I mean, if we get 280E, valuations will go up, you know, companies will be able to issue, issue equity or be in a better position to, to borrow at lower cost, so they'll be in a better position to, to pay that and enter those agreements, right? So that's, that's the good news there. Look, again— Yeah. Crystal ball question before we go back to New Lake. Okay, let's say we get rescheduling. It's we get a final rule, it's enacted, implemented. Do we get anything else before November? Meaning, you know, SAFER or other types of cannabis-related bills? And I know it's a crystal ball question. Yeah. I mean, I'm not going to prognosticate. I've been wrong in most of the things, so— Mm-hmm. Even if I told you something. I think I could paint a very credible argument for why something should happen before November, and I could equally paint a credible argument why something is not going to happen until November. Notoriously difficult to get legislation done in an election year. And, you know, unless this is going to be about Section 10, which is that anti-discriminatory language, anti-Operation Chokepoint language— Mm-hmm. The debanking language that is. Sure. You know, unless it becomes about that and wanting to really get that across the finish line as a political win before the midterms, I'm not sure cannabis banking is the type of political win that legislators in Washington, D.C., feel they need to have heading into the midterms. Right. Before we go back to NewLake, on the same topic of regulatory news flow. If we get rescheduling, I will assume that you, NewLake, would be in a better position to talk to Nasdaq, and get a listing for your stock. Is that wishful thinking? I'm not talking about a plant touching company, although you are indirectly or directly because you own the assets, but you have the argument that IIPR is in way as it is. If you get rescheduling, am I exaggerating and saying that you'll be in a great position to get Nasdaq listing at least? Yeah, listen, I can't be a cheerleader on that point. I'd love for it to happen. I focus on the facts, and they are as follows: they will not list us, New York and Nasdaq, because we currently violate federal law doing what we do. And yes, they've grandfathered IIPR. Schedule III doesn't change that. Right. So unless they have a change in sentiment, unless they have a change in policy, unless they have a change in perspective, which is entirely possible, I don't see it. I think it would need a safe harbor. I mean, any anti-money laundering laws, Bank Secrecy Act, all of those regulatory acts that have significant consequences for the exchanges and the custody agents, are significant enough that I think they say the opportunity isn't meaningful enough for us to pivot without having that safe harbor. Now listen, they could totally change their mind. Right. That's my view, and that's the assumption we're gonna make, and we're gonna push for, once we get Schedule III, we're gonna push hard for SAFER Banking with the right safe harbor language, so that this industry can have regulatory access to the U.S. capital markets. I'm sorry to keep pushing on the same point. It's fine. I know you're sharing your opinions, and we very much appreciate that, and I'm not gonna ask you to share private conversations with the, with the exchanges, but I would assume that you are constantly in touch with the exchanges, right? So when you're giving us these answers, it's not based on an opinion, it's based on the feedback they are giving you pretty much week- to- week. Yeah. Listen, we're not talking to exchanges on a week-to-week basis. It's kind of silly because there's really not much to talk about. Even with the executive order, and it's an executive order, you actually need to see the regulatory reform. But yes, we've talked to the exchanges on a fairly regular basis since before our IPO, because we wanted to get on the exchanges directly through our 2021 IPO. So that dialogue has been there for over five years. We have relationships there now and a consistent dialogue. I'd say I've not seen much daylight from conversation to conversation in terms of a change in attitude. Never say never, but we're gonna operate as if we need to get SAFER Banking done with the right safe harbor language so that we can have access, but. Thank you. Going back to NewLake, give a brief recap of third quarter results, but more than that, because we all have access to them. Any comments on tenant issues that happened recently or have happened over the last one or two years? You know, specifically, I'm talking about Ayr, I'm talking about, which you touched on, REV Clinics and Calypso. Any color you want to give there? A brief recap of the year. Yeah. So what I can speak to is our last reported information, as you know, which was Q3. We recovered the Ayr properties, the two Ayr properties that they vacated. We've cleaned them up. We've been in active dialogue trying to retenant the properties, one in Pennsylvania and one in Nevada. I'm sorry, re-tenant for cannabis purposes, obviously. For cannabis purposes, correct. That's what we're actively trying to do. We always have the option to go non-cannabis, but we think the best use for these properties are, is indeed cannabis, and that, that'll be the best value for our shareholders. On the REV Clinics front, that property came back to us over the summer. Same thing, cleaned it out, have a broker, and we're actively looking to market to bring in operator, or potentially multiple operators to that property. Calypso is really a non-event. Yes, no issues. Like, that's, that's not been really a discussion for at least a year or two. Right. And so, you know, that's where we, that's where we stand on our portfolio. No, that's good. And you already explained why the dividends were covered, so we'll not touch on that. I think in the past you made a point that NewLake is somewhat different from other, let's call them lenders or service operators out there, in terms of whether you work together with tenants in solving, problem situations. So again, I don't want to exaggerate, but is that something that makes you really unique and different? Well, whenever you say unique and different, it means different things to different people. We try. Let's say it this way: we try to service our clients and not just do deals and forget them. We recognize, particularly when you have a longer dated, a longer dated relationship with somebody, like a 15-year lease, your success is really tied to each other, and we underwrite properties looking at the cash flow at the particular property. And so we could see through the regular quarterly reporting, how a particular property is cash flowing. Is the cash flow improving? Is it decreasing? And we could have proactive conversations, and we have, with operators around the property or around the state or around a particular license, in order to maximize the overall return for them and for us. And one example was last year, we announced that we had moved a dispensary with Curaleaf. They had a dispensary in Illinois that when we first did the transaction, it was a medical market. This was a medical dispensary. As that market, a few years ago, transitioned to adult use, the community in which that dispensary did exist did not embrace or allow adult use, so that dispensary was only relegated to medical sales, which is an impact, right? They're utilizing a license. They could be getting better return if that was situated elsewhere. We could have been difficult and said: "Sorry, you got to pay us. That's you- that decision is on you." Instead, we worked collaboratively to find a solution where they could have a dispensary in another location and do a deed-for-deed swap, so that we can continue to get the return for our investors, and they could move out of that facility into a different facility and get a better yield or better return for their investors. We've done that now a handful of times across cultivation and dispensary assets. We think it's important to do, to not just optimize the value for our shareholders, but to be a good partner. And we think that if you're building a long-term business, being a good partner is one of those attributes that will have tenants coming back to you for future transactions. Thank you. Now, I know you, you can't really make forward comments here, and you haven't reported 4Q results yet, but what can you say about 2026 in general? Can we see more growth in your book than in 2025? You know, based on your disclosure, all other tenants are current, so there's not much to say, right? But, I could argue that, you know, based on the news flow, cannabis, PharmaCann, are potentially could be problematic. A creage seems to be, you know, or, we don't have data on Acreage because it's private now. But what, what can you comment in general, just about how to think about 2026 for NewLake? Yeah, I can't give any forward-looking comments around what we expect in terms of financial performance for the year. I can tell you what I can tell you, though, is I think the operating landscape in cannabis hasn't changed from where it was in 2025. It continues to be a difficult environment with a lack of access to regulatory capital markets. I think the industry got a shot in the arm at the end of last year with that executive order, which could bring some additional new capital to the table if there's follow-through. But people still need to be executing their business model and generating sufficient cash flow at the property level. What we also saw, and we see a lot of people talking about, prognosticating about, is an increase in M&A activity. We know there are certain states where there are opportunities for M&A activity and growth for companies through M&A, people to consolidate states that maybe they already have a dominant position in. Our tenants are no different in that regard. Some of them will participate that, and some of them won't participate in that. I think, as an outlook for 2026, we all should expect continued volatility across the cannabis sector, and continued distress where there is distress until we get finalization of Schedule III, or at least the filing of the Federal Register, to solidify some of the new interest in this sector that seems to be circling. Right. Now, let's talk about, you know, NewLake's ability to raise funds, assuming that you have growth opportunities in 2026. You know, how high can you take that leverage? Remind us about your existing credit lines, further borrowing potential. Also, you know, can you raise equity or not if you're trading at a discount to NAV? How do you think about that? And then related to that, just remind us of the spread, like your cost of funds versus your yield to maturity in the book. Thanks. Yeah. So, we have a $90 million credit facility, a little over $7 million outstanding. So we have ample, ample credit capacity to execute new transactions. And as you pointed out, we've been fairly slow and cautious on deploying new capital. The cost of our capital, for that credit line, because we'd be issuing debt for doing new transactions, we actually have some excess cash, and we could utilize some of our cash. But if we were to draw down on our credit facility, that's priced at prime plus 1. So at today's rates, you know, SEB was at 7.5%, I believe, right now, 7.75%. So, you know, that's what that cost to capital would be. So there would be a nice, healthy margin between the new cap rate and the borrowing rate, and that's what we need for our shareholders. In terms of opportunities, I, I want to come back to that point, which is we're only going to do deals that we think are quality deals. We're not going to do transactions, we're not going to try to put $20 million, $30 million, $40 million, $50 million of new deals out there if we're going to worry about collecting rent. These, again, these are long-term leases, and you have to collect the rent on a monthly basis. And so, we're only going to do deals that we feel very confident in the operator and very confident in the cash flow profile of the property. Right. That's good. Thank you. Look, I know we're running out of time here, but you know, I'm gonna ask you to comment on some of the states in which you have exposure, right? Obviously, in your disclosure, it's all very clear how much of the book is in what states, you even indicating what, with what operators. We touched on Pennsylvania, Florida, Illinois, Missouri, Massachusetts. Those are your five states. Any prognosis you want to give on those states, right? We all read the same news, right? The governor in Pennsylvania continues to push for recreational legalization, and clearly it will happen. Florida, we know what's happening there with the Supreme Court and the attorney general. But again, your thoughts and brief views on those five states, and how to think about, you know, NewLake's exposure in those five states. Do things get better, the same, or worse in 2026? And again, I know we have to be mindful about forward commentary here. Yes, yes. So I'll touch on the states, but I did realize I didn't answer part of your previous question on yield, and I, I want to make sure I communicate to folks. You asked about how much we could potentially lever up the REIT, because some investors may be thinking REITs use significant leverage. And if you are a mortgage REIT, then you may be thinking about some of the agency mortgage REITs as an investor, that were problems back in the last financial crisis, where they used 6x-7x leverage. That's nothing like what we would do. As an equity REIT, and particularly one focused on the cannabis sector, we have no interest in taking leverage up significantly for here. And so, you know, that $90 million credit facility on nearly $450 million balance sheet, it would still be one of the lower levered REITs out there, so it'd be very modest. You could even do more leverage than that and feel very, very comfortable. But for the near, for the near term, I don't see us going anywhere near, or above what, what we have available to us today. All right, let's focus on the states. Boy, Pennsylvania, I think all of us would have expected that, Pennsylvania would have moved to, to a recreational state, particularly given that five of the six states surrounding it already have adult use, and they know that they're losing tax revenue to people that are going to adjacent states. So here we are. We have the budget that's been presented. Yet again, it's been presented in the budget. I can't tell you. I thought last year it was gonna happen. I was wrong. I'm hoping this year is the year it gets across the finish line. I think a move to Schedule III does make that easier. I know it may seem weird to say, "Well, how does a move to Schedule III, which is medical, really get support for adult use?" I just think it's a little bit safer, it's a little bit more mainstream for folks to get behind it. But it's very clear to me now, as we sit here today, and we saw what happened last year with the budget discussions, this is a political football in Pennsylvania, or actually in most states, but in Pennsylvania. There, there's gonna be a horse trade, and the Republicans didn't get what they wanted last year in order to give on, on the cannabis legalization. So we'll see if those political winds play out. You have a governor that is running for reelection. He should be more inclined to, to try to cut a deal for a balanced budget, and, and maybe really push hard. He didn't really push that hard. You know, from my understanding is he wasn't putting his shoulder into cannabis legalization last year. So, you know, the question, I think, the big question is: Will the governor really push to get it done? Will he put his shoulder behind it, and will he be able to get it done? But the thing about Pennsylvania is it continues to be a very robust medical state and continues to operate, and provide good return for folks in that market. Right. I mean, you answered my follow-up question on PA, which is exactly that, right? It's still a license-restricted state, attractive economics. There are some medical markets that become very price competitive. We've seen some pressures in PA, but for the most part remains very attractive compared to other states. Yes. Let's go to Florida. I know we're running out of time here. You know, Florida, you know, here we are again in terms of, fights at the state supreme court around, ballots and with the state attorney general for ballots and, are people supporting the ballot initiative, are those signatures valid or not? We'll see how that plays out. It's clear that in Florida, the population wants it. Yes, we couldn't get to 60%. That was with the backdrop of DeSantis running really, really hard at it. I think if we could get the bill done in Florida, I say we, I'm honestly not behind it, but if this bill in Florida can get done, that addresses public consumption, I think it takes a real argument off the table that DeSantis and others were pushing in the last referendum. So, you know, I think we're gonna have to wait and see how that one, I think, is a, is a coin toss. If it does get on and you don't have a DeSantis that's as powerful as he was two years ago, I think it's got a really good shot of passing. You know, Illinois, another strong state that, for some people, is really successful. For others, it's been, it's been a struggle. I think the growth in dispensaries in there has been very good for that state. I think it creates greater access for the consumer. I think it's provided a little bit more stability for some of the operators that were able to create relationships with the, with the social equity licensees. And so, you know, we like the Illinois market, but you need to be careful in it. Missouri. Missouri has been consolidating, and there's really a handful of large, or what I would call, leaders in that market, couple of which we have in our portfolio with the exposure we have there. Missouri is a little bit wonky from a regulator perspective. It, it's not always, and I'm not as close to it as some of our tenants and others that are in the industry, but it appears to me to be one in which the regulator has been, volatile and inconsistent in the way they've policed and approached the department. And so we're gonna watch Missouri to see if there's any changes, in that state regulatory construct. But a nice, nice growth in store count and, we're aware of people in that state that are doing quite well. And then lastly, Massachusetts. I mean, REV Clinics is one that we talked about in Massachusetts, and we've said for the last couple of calls that we thought it would be difficult and would take us some time to backfill that property, given the dynamics at play in Mass. We've actually been seeing in the data and anecdotally talking to those in Massachusetts, that it's stabilized in terms of pricing, and in some cases, I've actually heard some people say it's turning into an okay market, not a good, but a better market. As we've absorbed new dispensaries coming online, as we've opened up availability to the consumer, and we've seen some stabilization in pricing over the past year. But what's exciting people in Massachusetts are competing bills out of the state senate and the state legislature to increase the cap on dispensaries from three. One proposal is, I think, four, the other one is five, you know, or one is six. So there's gonna be a reconciliation. So people are optimistic in Massachusetts that at some point this year, we could see the cap raised. And then maybe there might be some movement also in the ability to affiliate with other dispensaries. And so with that, that growth in the cap, you might see some additional consolidation around dispensaries create better economics for operators. And so we're, we're hopeful that we can see some tailwinds in Massachusetts if we can get that, that cap. I mean, honestly, though, the cap five or six is still, still, I think the state would be better served increasing the cap beyond that, but y ou know, but that's, that's a positive momentum there. That's great color on those five states, Anthony. I know we're almost out of time. Look, I'm gonna just read some brief questions from the audience, but just brief answers. Someone asking, and I think this comes up even every now and then, "Isn't it a big risk to have a tenant who accounts for 24% of your revenues, when you want to diversify your holdings in the future?" Absolutely want to diversify the holdings in the future. The 24% is across multiple properties. We have over 10 properties with them, and we look at each property from a cash flow perspective. How is that property cash flowing? And so, so yes, you don't, you don't really wanna—y ou don't enjoy having that level of concentration, but where we're gonna have that type of concentration is gonna be what we think are the long-term winners in the space, like a Cresco, a Curaleaf, and a Trulieve. Right. Someone asking about, you know, whether management owns shares in the business. I don't know if you wanna touch on that or remind us of the shareholder structure of NewLake. Yeah, it's, it's public. Insiders, if you look at the board and management, we own, roughly 5% of the company, 6% of the company. If you look at insiders, which are some of our foundational investors, the institutions that were there from the beginning, you have roughly 1/3 of the company is owned by those, what are called insiders. You can take a look at our proxy, and all of that information is there. I've never sold a share, and in fact, I bought some back in December. Okay. That's great. Thank you. Look, and one last one. This, this question is a bit political. I'm gonna try to phrase it the right way. Someone is, I guess someone is implicitly making the assumption that as long as President Trump remains president, rescheduling will happen this year 100%. So the only risk for rescheduling, according to the question, would be, you know, a 25th amendment or impeachment. And I'm not gonna ask you to comment on that, but, I mean, do you agree with the setup of the question? Pretty much the only risk is that President Trump is not president, you know, the only risk to rescheduling is that. I mean, I'll— don't answer it. Yeah. I, you know, would first define what does rescheduling mean. And it's an important distinction because does it mean the filing in the Federal Register, or does it mean the actual final implementation after legislation? So, I think if it was the former, if it was the actual filing, it's hard for me to expect that this is gonna leak into 2027. It just, it would be unconscionable. But then again, we don't know what happens on the horizon. Look what happened last year. We had a government shutdown. Yeah. We did have a government shutdown this past weekend, but it was limited. Do we have another government shutdown? Is there a war with Iran? Is Pam Bondi fired? Right. Do you get a new DOJ? Like, there's so many variables that are going to impact the timing. Right. But I would generally agree that we should see the final rule filed in the Federal Register by the end of the year. Yeah, I would tend to agree with that. You know, take off the table war with Iran, take off the table, you know, some— Right. G reat exogenous factor. But I want to come at the point around Trump staying in office. Let's actually say Trump is removed from office. And I say, "Well, okay, then what?" Let's say JD Vance is put in there. Is Vance gonna go back on what was done? Well, why was it done in the first place? I think it was done because it was wildly popular. I'm not sure Vance is going to unwind something that Trump did. Even if he doesn't agree with it, I don't think he'd be garnering new support because he went and undid something. He's either gonna have that support or he's not. And if a Democrat was put in for some reason, let's say something happened where it switched parties— Mm-hmm. You know, I think the Democrats started this under Biden. Yeah. You know, regardless of who's in the White House— Mm-hmm. I think we ultimately get this. I don't see it going backwards. I really don't, particularly given the pervasiveness of the hemp-derived products and how popular some of the hemp-derived, low-dose drinks were and how that started to really mainstream THC products. That's great. That's a great color, Anthony. I appreciate you answering that question. Look, closing remarks, if you want to pitch or talk again to investors, but again, thank you very much from our side, from all, all the color you provided here on NewLake. Thanks, and the industry, of course. Yeah, no, you know, listen, thank you for the opportunity to chat with you and chat with the folks that tune in here. If people want more information, I'd encourage you go to newlake.com. There's a lot of information on our website. If you want to talk with us, please feel free to connect with us through the website, and we'll try to set up a call. And again, if you're thinking about investing in businesses that focus on the cannabis sector, I think there's a higher volatility, potentially higher return with the plant-touching businesses, and there's some great quality companies out there. I also think if you look at some of the yield-oriented plays that are REITs, I think there's a real opportunity to invest in a business that has quality portfolio with a quality yield that's well covered with an 82% AFFO payout ratio in the third quarter. That will also respond positively to the catalysts that are on the horizon. Don't expect a 2x or a 3x in our stock to happen overnight, the way you may get with some of the plant touching. But you'll get paid a nice dividend while you wait for those catalysts to occur. And I think those are the some of the differences and the benefits of being in a stock like NewLake. And thanks for giving me the opportunity to chat with your folks about it. That's great. Thank you, Anthony. Everyone, have a good day. Thanks for tuning in. Bye-bye.