NewLake Capital Partners (NLCP) Risk Analysis

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Public companies are required to disclose risks that can affect the business and impact the stock. These disclosures are known as “Risk Factors”. Companies disclose these risks in their yearly (Form 10-K), quarterly earnings (Form 10-Q), or “foreign private issuer” reports (Form 20-F). Risk factors show the challenges a company faces. Investors can consider the worst-case scenarios before making an investment. TipRanks’ Risk Analysis categorizes risks based on proprietary classification algorithms and machine learning.

NewLake Capital Partners disclosed 14 risk factors in its most recent earnings report. NewLake Capital Partners reported the most risks in the “Finance & Corporate” category.

Risk Overview Q2, 2025

Risk Distribution

29% Finance & Corporate

29% Production

21% Legal & Regulatory

14% Tech & Innovation

7% Ability to Sell

0% Macro & Political

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

This chart displays the stock's most recent risk distribution according to category. TipRanks has identified 6 major categories: Finance & corporate, legal & regulatory, macro & political, production, tech & innovation, and ability to sell.

Risk Change Over Time

S&P500 Average

Sector Average

Risks removed

Risks added

Risks changed

NewLake Capital Partners Risk Factors

New Risk (0)

Risk Changed (0)

Risk Removed (0)

No changes from previous report

The chart shows the number of risks a company has disclosed. You can compare this to the sector average or S&P 500 average.

The quarters shown in the chart are according to the calendar year (January to December). Businesses set their own financial calendar, known as a fiscal year. For example, Walmart ends their financial year at the end of January to accommodate the holiday season.

Risk Highlights Q2, 2025

Main Risk Category

Finance & Corporate

With 4 Risks

Finance & Corporate

With 4 Risks

Number of Disclosed Risks

No changes from last report

S&P 500 Average: 31

No changes from last report

S&P 500 Average: 31

Recent Changes

1Risks added

0Risks removed

0Risks changed

Since Jun 2025

1Risks added

0Risks removed

0Risks changed

Since Jun 2025

Number of Risk Changed

No changes from last report

S&P 500 Average: 3

No changes from last report

S&P 500 Average: 3

See the risk highlights of NewLake Capital Partners in the last period.

Risk Word Cloud

The most common phrases about risk factors from the most recent report. Larger texts indicate more widely used phrases.

Risk Factors Full Breakdown - Total Risks 14

Finance & Corporate

Total Risks: 4/14 (29%)Below Sector Average

Share Price & Shareholder Rights2 | 14.3%

Share Price & Shareholder Rights - Risk 1

Risks related to engaging in certain capital raising activities and secondary trading in our common stock

• Risks related to engaging in certain capital raising activities and secondary trading in our common stock • Risks related to engaging in certain capital raising activities and secondary trading in our common stock 9999 Many clearing firms in the United States are prohibited or very limited in their ability to settle securities of companies engaged in the cannabis industry, which could adversely impact our ability to raise funds in the capital markets. In the United States, many clearing firms for broker-dealers are prohibited by their internal policies or otherwise have refused to settle sales of securities offerings of companies engaged in the cannabis industry. We lease cultivation properties and dispensaries to tenants who operate in the cannabis industry, and thus many clearing firms and other market participants consider us to be engaged in the cannabis industry. Therefore, the number of clearing firms that will settle our securities offerings, or secondary sales of our common stock, is extremely limited. This means that broker-dealers that we may engage to sell our securities, will have few alternatives for clearing firms that will settle such transactions. This limitation is more pronounced for companies, like ours, that have securities that trade on the OTCQX® Best Market rather than on a national securities exchange. Therefore, our access to the capital markets may be constrained, including having to rely on best efforts securities offerings as opposed to more traditional underwritten securities offerings. Additionally, limitations on settling secondary sales of our securities may limit the marketability and daily trading volume of our securities. These conditions may adversely impact our ability to raise funds in the capital markets and fully execute our business plans as, the amount of proceeds we raise in best efforts securities offerings may be substantially less than the amount that we expect. Given the level of regulation and scrutiny of the cannabis industry by stock exchanges and other regulators, this condition may continue or become more pronounced in the future.

Share Price & Shareholder Rights - Risk 2

Risks related to the volatility of the market price of our common stock

• Risks related to the volatility of the market price of our common stock • Risks related to the volatility of the market price of our common stock • Risks related to common stock and preferred stock eligible for future sale on share price • Risks related to common stock and preferred stock eligible for future sale on share price • Risks related to our ability to make distributions and their reflection of our performance • Risks related to our ability to make distributions and their reflection of our performance • Risks related to the effect of distributions on the price of our common stock • Risks related to the effect of distributions on the price of our common stock • Risks related to securities analysts, effect on the price of our common stock • Risks related to securities analysts, effect on the price of our common stock Detailed description: The market price for our common stock may be highly volatile and subject to fluctuations influenced by our operating results, financial condition, and the overall performance of the cannabis and real estate markets. Investor perceptions, analyst ratings and broader market conditions may lead to significant price fluctuations, regardless of our underlying performance.

Accounting & Financial Operations1 | 7.1%

Accounting & Financial Operations - Risk 1

ITEM 1C. CYBERSECURITY - Risk Management and Strategy

ITEM 1C. CYBERSECURITY Risk Management and Strategy We employ a risk management strategy for the assessment, identification and management of material risks stemming from cybersecurity threats. Our methodologies involve a systematic evaluation of potential threats, vulnerabilities, and their potential impacts on our organization’s operations, data, and systems. Our cybersecurity risk management program includes: • Risk assessments designed to help identify material cybersecurity risks to our critical systems, and our IT environment; • The use of third-party service providers to assess, test or otherwise assist with aspects of our security controls; • Cybersecurity awareness training of our employees and senior management through the use of third-party providers for regular mandatory trainings; • A cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; and • We design and assess our program using the National Institute Cybersecurity Framework (“NIST CSF”) as a set of guiding principles. Our third-party service providers are primarily responsible for the security of their own information technology environments and in certain instances we rely significantly on third-party service providers to supply and store our sensitive data in a secure manner. All of these third parties face potential risks relating to cybersecurity similar to ours which could disrupt their businesses and therefore adversely impact us. While we provide guidance and specific requirements in some cases, we do not directly control any of these parties' information technology security operations, or the amount of investment they place in guarding against cybersecurity threats. Accordingly, we are subject to any flaws or breaches in their systems, which could have a material adverse effect on our financial condition and results of operations.

Debt & Financing1 | 7.1%

Debt & Financing - Risk 1

Risks related to external sources of capital

• Risks related to external sources of capital • Risks related to external sources of capital • Risks related to significant debt • Risks related to significant debt • Risks related to inflation • Risks related to inflation • Risks related to interest rate fluctuations • Risks related to interest rate fluctuations • Risks related to our Revolving Credit Facility • Risks related to our Revolving Credit Facility Detailed description: We expect to acquire additional real estate assets, which we intend to finance primarily through newly issued equity or debt. However, market conditions, shifts in investor sentiment and changes in the regulatory environment—particularly relating to the cannabis industry—could make access to external financing more difficult or expensive. As such, our ability to secure funding on favorable terms is subject to conditions beyond our control, and adverse financing conditions could impede our growth.

Production

Total Risks: 4/14 (29%)Above Sector Average

Employment / Personnel3 | 21.4%

Employment / Personnel - Risk 1

Risks related to our senior management

• Risks related to our senior management • Risks related to our senior management • Risks related to key personnel • Risks related to key personnel • Risks related to certain stockholders’ rights to nominate members of our board • Risks related to certain stockholders’ rights to nominate members of our board • Risks related to changes to our investment strategies by our board • Risks related to changes to our investment strategies by our board Detailed description: Our senior management team manages our portfolio subject to very broad investment guidelines. The effectiveness of our business strategy heavily depends on the continued service and expertise of our key personnel. In addition, certain stockholder agreements may limit the ability of other stockholders to influence board composition, thereby reducing oversight and flexibility in our investment strategies.

Employment / Personnel - Risk 2

Item 1b. Unresolved staff comments

ITEM 1B. UNRESOLVED STAFF COMMENTS None. None.

Employment / Personnel - Risk 3

ITEM 1C. CYBERSECURITY - Governance

ITEM 1C. CYBERSECURITY Governance Our board of directors considers cybersecurity risk as part of its risk oversight function and has delegated to the Audit Committee oversight of cybersecurity and other information technology risks. The Committee receives periodic reports from management on our potential cybersecurity risks and threats and receives presentations on cybersecurity topics. In addition, management oversees and identifies such risks from cybersecurity threats associated with our use of third-party service providers and works collaboratively with our third-party providers to test our system security processes and to prevent, monitor, detect, mediate and remediate cybersecurity threats and incidents, and will report such threats and incidents to the Audit Committee when appropriate. The Committee reports to the full board of directors regarding its activities, including those related to cybersecurity.

Costs1 | 7.1%

Costs - Risk 1

Summary of Risk Factors

ITEM IA. RISK FACTORS ITEM IA. RISK FACTORS Summary of Risk Factors Summary of Risk Factors • Risks related to engaging in certain capital raising activities and secondary trading in our common stock • Risks related to engaging in certain capital raising activities and secondary trading in our common stock 9999 Risks Related to Our Business Risks Related to Our Business • Risks related to our limited number of tenants, and the inability of any of our tenants to make their lease payments • Risks related to our limited number of tenants, and the inability of any of our tenants to make their lease payments • Risks related to the limited operating history of our tenants • Risks related to the limited operating history of our tenants • Risks related to real estate assets and the real estate industry • Risks related to real estate assets and the real estate industry • Risks related to the guarantors of our tenant leases being unable to satisfy their obligations • Risks related to the guarantors of our tenant leases being unable to satisfy their obligations • Risks related to our ability to consummate future acquisitions • Risks related to our ability to consummate future acquisitions • Risks related to the limited number of cannabis-related facilities • Risks related to the limited number of cannabis-related facilities • Risks related to the concentration of our properties in states allowing cannabis operations • Risks related to the concentration of our properties in states allowing cannabis operations • Risks related to the demand for properties suitable for cannabis operations • Risks related to the demand for properties suitable for cannabis operations • Risks related to our acquisitions of dispensaries and entrance into leases with licensed operators for these properties • Risks related to our acquisitions of dispensaries and entrance into leases with licensed operators for these properties • Risks related to the sale or re-leasing of properties suitable for cannabis operations • Risks related to the sale or re-leasing of properties suitable for cannabis operations • Risks related to impairment charges • Risks related to impairment charges • Risks related to our tenants’ ability to maintain their licenses for cannabis operations • Risks related to our tenants’ ability to maintain their licenses for cannabis operations • Risks related to the acquisition of properties “as-is” • Risks related to the acquisition of properties “as-is” • Risks related to competition for the acquisition of properties • Risks related to competition for the acquisition of properties • Risks related to potential liability for environmental matters and climate change • Risks related to potential liability for environmental matters and climate change • Risks related to the development and redevelopment of properties we acquire • Risks related to the development and redevelopment of properties we acquire • Risks related to our tenants’ susceptibility to bankruptcy • Risks related to our tenants’ susceptibility to bankruptcy • Risks related to Section 280E of the Internal Revenue Code (the “Code”) and its effects on our tenants • Risks related to Section 280E of the Internal Revenue Code (the “Code”) and its effects on our tenants • Risks related to liability of uninsured losses • Risks related to liability of uninsured losses • Risks related to our properties’ access to adequate water and power supplies • Risks related to our properties’ access to adequate water and power supplies • Risks related to obtaining various insurance policies • Risks related to obtaining various insurance policies • Risks related to purchase of properties subject to ground leases • Risks related to purchase of properties subject to ground leases • Risks related to making investments in asset classes outside of our core investment strategy • Risks related to making investments in asset classes outside of our core investment strategy • Risks related to our status as an emerging growth company and smaller reporting company • Risks related to our status as an emerging growth company and smaller reporting company • Risks related to the Sarbanes-Oxley Act • Risks related to the Sarbanes-Oxley Act • Risks related to assets held at financial institutions • Risks related to assets held at financial institutions Risks Related to Regulation Risks Related to Regulation • Risks related to enforcement of federal laws regarding cannabis • Risks related to enforcement of federal laws regarding cannabis • Risks related to engaging in operations for the adult-use of cannabis • Risks related to engaging in operations for the adult-use of cannabis • Risks related to the potential for new federal, state or local laws • Risks related to the potential for new federal, state or local laws • Risks related to FDA regulation of cannabis • Risks related to FDA regulation of cannabis • Risks related to the service of banks and other financial institutions • Risks related to the service of banks and other financial institutions • Risks related to owners of properties located in close proximity to our properties • Risks related to owners of properties located in close proximity to our properties • Risks related to changing laws and regulations affecting the regulated cannabis industry • Risks related to changing laws and regulations affecting the regulated cannabis industry • Risks related to the potential forfeit of assets leased to cannabis businesses • Risks related to the potential forfeit of assets leased to cannabis businesses • Risks related to accessing bankruptcy courts • Risks related to accessing bankruptcy courts • Risks related to our properties being subject to extensive regulations • Risks related to our properties being subject to extensive regulations Risks Related to Financing Our Business Risks Related to Financing Our Business • Risks related to external sources of capital • Risks related to external sources of capital • Risks related to significant debt • Risks related to significant debt • Risks related to inflation • Risks related to inflation • Risks related to interest rate fluctuations • Risks related to interest rate fluctuations • Risks related to our Revolving Credit Facility • Risks related to our Revolving Credit Facility Risks Related to Our Organization and Structure Risks Related to Our Organization and Structure • Risks related to our senior management • Risks related to our senior management • Risks related to key personnel • Risks related to key personnel • Risks related to certain stockholders’ rights to nominate members of our board • Risks related to certain stockholders’ rights to nominate members of our board • Risks related to changes to our investment strategies by our board • Risks related to changes to our investment strategies by our board Risks Related to Our Securities Risks Related to Our Securities • Risks related to the volatility of the market price of our common stock • Risks related to the volatility of the market price of our common stock • Risks related to common stock and preferred stock eligible for future sale on share price • Risks related to common stock and preferred stock eligible for future sale on share price • Risks related to our ability to make distributions and their reflection of our performance • Risks related to our ability to make distributions and their reflection of our performance • Risks related to the effect of distributions on the price of our common stock • Risks related to the effect of distributions on the price of our common stock • Risks related to securities analysts, effect on the price of our common stock • Risks related to securities analysts, effect on the price of our common stock Risks Related to Our Taxation as a REIT Risks Related to Our Taxation as a REIT • Risks related to failure to maintain our qualification as a REIT • Risks related to failure to maintain our qualification as a REIT • Risks related to REIT distribution requirements • Risks related to REIT distribution requirements • Risks related to Section 280E of the Code and the possible effect on our REIT status • Risks related to Section 280E of the Code and the possible effect on our REIT status • Risks related to complying with REIT requirements • Risks related to complying with REIT requirements • Risks related to the tax on prohibited transactions • Risks related to the tax on prohibited transactions • Risks related to the ability of our board to revoke our REIT election • Risks related to the ability of our board to revoke our REIT election • Risks related to our Taxable REIT Subsidiary (“TRS”) • Risks related to our Taxable REIT Subsidiary (“TRS”) • Risks related to dividends payable by REITs and their tax implications • Risks related to dividends payable by REITs and their tax implications • Risks related to re-characterization of sale-leaseback transactions • Risks related to re-characterization of sale-leaseback transactions • Risks related to non-U.S. stockholders • Risks related to non-U.S. stockholders General Risk Factors General Risk Factors • Risks related to cyberattacks • Risks related to cyberattacks • Risks related to events not discussed herein • Risks related to events not discussed herein The following risk factors may adversely affect our overall business, financial condition, results of operations, and cash flows; our ability to make distributions to our stockholders; our access to capital; or the market price of our common stock, as further described in each risk factor below. In addition to the information set forth herein, one should carefully review and consider the information contained in our other reports and filings that we make with the SEC from time to time. The risks that we describe in our public filings are not the only risks that we face. Additional risks and uncertainties not presently known to us or are out of our control, or that we currently consider immaterial, also may materially adversely affect our business, financial condition, and results of operations. Additional information regarding forward-looking statements is included herein. The following risk factors may adversely affect our overall business, financial condition, results of operations, and cash flows; our ability to make distributions to our stockholders; our access to capital; or the market price of our common stock, as further described in each risk factor below. In addition to the information set forth herein, one should carefully review and consider the information contained in our other reports and filings that we make with the SEC from time to time. The risks that we describe in our public filings are not the only risks that we face. Additional risks and uncertainties not presently known to us or are out of our control, or that we currently consider immaterial, also may materially adversely affect our business, financial condition, and results of operations. Additional information regarding forward-looking statements is included herein.

Legal & Regulatory

Total Risks: 3/14 (21%)Below Sector Average

Regulation3 | 21.4%

Regulation - Risk 1

Risks related to enforcement of federal laws regarding cannabis

• Risks related to enforcement of federal laws regarding cannabis • Risks related to enforcement of federal laws regarding cannabis • Risks related to engaging in operations for the adult-use of cannabis • Risks related to engaging in operations for the adult-use of cannabis • Risks related to the potential for new federal, state or local laws • Risks related to the potential for new federal, state or local laws • Risks related to FDA regulation of cannabis • Risks related to FDA regulation of cannabis • Risks related to the service of banks and other financial institutions • Risks related to the service of banks and other financial institutions • Risks related to owners of properties located in close proximity to our properties • Risks related to owners of properties located in close proximity to our properties • Risks related to changing laws and regulations affecting the regulated cannabis industry • Risks related to changing laws and regulations affecting the regulated cannabis industry • Risks related to the potential forfeit of assets leased to cannabis businesses • Risks related to the potential forfeit of assets leased to cannabis businesses • Risks related to accessing bankruptcy courts • Risks related to accessing bankruptcy courts • Risks related to our properties being subject to extensive regulations • Risks related to our properties being subject to extensive regulations Detailed description: In the United States, despite state-level legalization in many jurisdictions, cannabis remains illegal under federal law. As a result, strict enforcement of federal cannabis laws could prevent our tenants from executing their business plans and adversely affect our ability to operate our properties. Further, even where state law permits cannabis operations, evolving and conflicting regulations may impose additional costs and uncertainties on our business.

Regulation - Risk 2

Risks related to failure to maintain our qualification as a REIT

• Risks related to failure to maintain our qualification as a REIT • Risks related to failure to maintain our qualification as a REIT • Risks related to REIT distribution requirements • Risks related to REIT distribution requirements • Risks related to Section 280E of the Code and the possible effect on our REIT status • Risks related to Section 280E of the Code and the possible effect on our REIT status • Risks related to complying with REIT requirements • Risks related to complying with REIT requirements • Risks related to the tax on prohibited transactions • Risks related to the tax on prohibited transactions • Risks related to the ability of our board to revoke our REIT election • Risks related to the ability of our board to revoke our REIT election • Risks related to our Taxable REIT Subsidiary (“TRS”) • Risks related to our Taxable REIT Subsidiary (“TRS”) • Risks related to dividends payable by REITs and their tax implications • Risks related to dividends payable by REITs and their tax implications • Risks related to re-characterization of sale-leaseback transactions • Risks related to re-characterization of sale-leaseback transactions • Risks related to non-U.S. stockholders • Risks related to non-U.S. stockholders Detailed description: To maintain our REIT status, we must comply with numerous complex requirements regarding asset composition, income, and distribution levels. Failure to meet these requirements—or adverse interpretations of federal tax code provisions such as Section 280E—could force us to pay corporate income taxes on otherwise deductible expenses, thereby reducing cash available for distributions. Additionally, our ability to structure transactions on arm’s length terms is critical to avoiding re-characterization that might jeopardize our REIT qualification.

Regulation - Risk 3

Added

There have been no material changes to the risk factors set forth in the section titled “Risk Factors” included in our Annual Report on Form 10-K, dated March 6, 2025, filed with the SEC. Our business involves significant risks. You should carefully consider the risks and uncertainties described in our Annual Report on Form 10-K, together with all of the other information in this Quarterly Report on Form 10-Q, as well as our audited consolidated financial statements and related notes as disclosed in our Annual Report. The risks and uncertainties described in our Annual Report are not the only ones we face. Additional risk and uncertainties that we are unaware of or that we deem immaterial may also become important factors that adversely affect our business. The realization of any of these risks and uncertainties could have a material adverse effect on our reputation, business, financial condition, results of operations, growth and future prospects as well as our ability to accomplish our strategic objectives. In that event, the market price of our common stock could decline and you could lose part or all of your investment.43

Tech & Innovation

Total Risks: 2/14 (14%)Above Sector Average

Cyber Security2 | 14.3%

Cyber Security - Risk 1

Risks related to cyberattacks

• Risks related to cyberattacks • Risks related to cyberattacks • Risks related to events not discussed herein • Risks related to events not discussed herein Detailed description: The occurrence of cyber incidents or cyberattacks could disrupt our operations, result in the loss of confidential information and/or damage our business relationships and reputation. The risk of a security breach or disruption, particularly through cyberattack or cyber intrusion – including from hackers, foreign governments or cyber terrorists – has increased in recent years. We rely on complex IT systems and third-party service providers for the secure handling of data, and any breach in these systems could have a material adverse effect on our financial performance, condition and reputation.

Cyber Security - Risk 2

ITEM 1C. CYBERSECURITY - Additional Cybersecurity Risks

ITEM 1C. CYBERSECURITY Additional Cybersecurity Risks We face certain ongoing risks from cybersecurity threats that, if realized, are reasonably likely to materially affect our operations, business strategy, results of operations, or financial condition. These risks include, without limitation, potential loss of confidential information, disruption of operations and damage to our reputation. We cannot guarantee that our current cybersecurity measures will be effective against future threats, and any successful cyberattack could have a material adverse impact on our business, financial condition and results of operations.

Ability to Sell

Total Risks: 1/14 (7%)Above Sector Average

Demand1 | 7.1%

Demand - Risk 1

Risks related to our limited number of tenants, and the inability of any of our tenants to make their lease payments

• Risks related to our limited number of tenants, and the inability of any of our tenants to make their lease payments • Risks related to our limited number of tenants, and the inability of any of our tenants to make their lease payments • Risks related to the limited operating history of our tenants • Risks related to the limited operating history of our tenants • Risks related to real estate assets and the real estate industry • Risks related to real estate assets and the real estate industry • Risks related to the guarantors of our tenant leases being unable to satisfy their obligations • Risks related to the guarantors of our tenant leases being unable to satisfy their obligations • Risks related to our ability to consummate future acquisitions • Risks related to our ability to consummate future acquisitions • Risks related to the limited number of cannabis-related facilities • Risks related to the limited number of cannabis-related facilities • Risks related to the concentration of our properties in states allowing cannabis operations • Risks related to the concentration of our properties in states allowing cannabis operations • Risks related to the demand for properties suitable for cannabis operations • Risks related to the demand for properties suitable for cannabis operations • Risks related to our acquisitions of dispensaries and entrance into leases with licensed operators for these properties • Risks related to our acquisitions of dispensaries and entrance into leases with licensed operators for these properties • Risks related to the sale or re-leasing of properties suitable for cannabis operations • Risks related to the sale or re-leasing of properties suitable for cannabis operations • Risks related to impairment charges • Risks related to impairment charges • Risks related to our tenants’ ability to maintain their licenses for cannabis operations • Risks related to our tenants’ ability to maintain their licenses for cannabis operations • Risks related to the acquisition of properties “as-is” • Risks related to the acquisition of properties “as-is” • Risks related to competition for the acquisition of properties • Risks related to competition for the acquisition of properties • Risks related to potential liability for environmental matters and climate change • Risks related to potential liability for environmental matters and climate change • Risks related to the development and redevelopment of properties we acquire • Risks related to the development and redevelopment of properties we acquire • Risks related to our tenants’ susceptibility to bankruptcy • Risks related to our tenants’ susceptibility to bankruptcy • Risks related to Section 280E of the Internal Revenue Code (the “Code”) and its effects on our tenants • Risks related to Section 280E of the Internal Revenue Code (the “Code”) and its effects on our tenants • Risks related to liability of uninsured losses • Risks related to liability of uninsured losses • Risks related to our properties’ access to adequate water and power supplies • Risks related to our properties’ access to adequate water and power supplies • Risks related to obtaining various insurance policies • Risks related to obtaining various insurance policies • Risks related to purchase of properties subject to ground leases • Risks related to purchase of properties subject to ground leases • Risks related to making investments in asset classes outside of our core investment strategy • Risks related to making investments in asset classes outside of our core investment strategy • Risks related to our status as an emerging growth company and smaller reporting company • Risks related to our status as an emerging growth company and smaller reporting company • Risks related to the Sarbanes-Oxley Act • Risks related to the Sarbanes-Oxley Act • Risks related to assets held at financial institutions • Risks related to assets held at financial institutions We have a very limited number of tenants. As of December 31, 2024, we owned 32 total properties that were leased to a total of 13 tenants. Our 13 tenants each represent aggregate annualized rental revenues [...] Any adverse change in the financial condition of any of our tenants, including but not limited to [...] would subject us to a significant risk of loss. In addition, failure by any of our tenants to comply with the terms of its lease agreement with us could require us to find another lessee for the applicable property. We may experience delays in enforcing our rights as landlord and may incur substantial costs in protecting our investment and re-leasing that property. Furthermore, we cannot assure you that we will be able to re-lease that property for the rent we currently receive, or at all, or that a lease termination would not result in our having to sell the property at a loss. The tenant concentration risk (and related risk of tenant defaults) may be more pronounced in the cannabis industry due to the fact that some of our tenants have limited operating histories. [...] Some of our tenants have limited operating histories and may be more susceptible to payment and other lease defaults, which could materially and adversely affect our business (including our financial performance and condition).” The result of any of the foregoing risks could materially and adversely affect our business (including our financial performance and condition). Some of our tenants and borrower have limited operating histories and may be more susceptible to payment and other lease and loan defaults, which could materially and adversely affect our business (including our financial performance and condition). As of December 31, 2024, our properties were 100% leased to 13 tenants with one loan to one of the Company’s existing tenants. Single tenants currently occupy our properties, and we expect that single tenants will occupy our properties that we acquire in the future. Therefore, the success of our investments will be materially dependent on the financial stability of these tenants. We rely on our management team to perform due diligence investigations [...] [...]

See a full breakdown of risk according to category and subcategory. The list starts with the category with the most risk. Click on subcategories to read relevant extracts from the most recent report.

FAQ

What are “Risk Factors”?

Risk factors are any situations or occurrences that could make investing in a company risky.

The Securities and Exchange Commission (SEC) requires that publicly traded companies disclose their most significant risk factors. This is so that potential investors can consider any risks before they make an investment.

They also offer companies protection, as a company can use risk factors as liability protection. This could happen if a company underperforms and investors take legal action as a result.

It is worth noting that smaller companies, that is those with a public float of under $75 million on the last business day, do not have to include risk factors in their 10-K and 10-Q forms, although some may choose to do so.

How do companies disclose their risk factors?

Publicly traded companies initially disclose their risk factors to the SEC through their S-1 filings as part of the IPO process.

Additionally, companies must provide a complete list of risk factors in their Annual Reports (Form 10-K) or (Form 20-F) for “foreign private issuers”.

Quarterly Reports also include a section on risk factors (Form 10-Q) where companies are only required to update any changes since the previous report.

According to the SEC, risk factors should be reported concisely, logically and in “plain English” so investors can understand them.

How can I use TipRanks risk factors in my stock research?

Use the Risk Factors tab to get data about the risk factors of any company in which you are considering investing.

You can easily see the most significant risks a company is facing. Additionally, you can find out which risk factors a company has added, removed or adjusted since its previous disclosure. You can also see how a company’s risk factors compare to others in its sector.

Without reading company reports or participating in conference calls, you would most likely not have access to this sort of information, which is usually not included in press releases or other public announcements.

A simplified analysis of risk factors is unique to TipRanks.

What are all the risk factor categories?

TipRanks has identified 6 major categories of risk factors and a number of subcategories for each. You can see how these categories are broken down in the list below.

1. Financial & Corporate

Accounting & Financial Operations - risks related to accounting loss, value of intangible assets, financial statements, value of intangible assets, financial reporting, estimates, guidance, company profitability, dividends, fluctuating results.
Share Price & Shareholder Rights – risks related to things that impact share prices and the rights of shareholders, including analyst ratings, major shareholder activity, trade volatility, liquidity of shares, anti-takeover provisions, international listing, dual listing.
Debt & Financing – risks related to debt, funding, financing and interest rates, financial investments.
Corporate Activity and Growth – risks related to restructuring, M&As, joint ventures, execution of corporate strategy, strategic alliances.

2. Legal & Regulatory

Litigation and Legal Liabilities – risks related to litigation/ lawsuits against the company.
Regulation – risks related to compliance, GDPR, and new legislation.
Environmental / Social – risks related to environmental regulation and to data privacy.
Taxation & Government Incentives – risks related to taxation and changes in government incentives.

3. Production

Costs – risks related to costs of production including commodity prices, future contracts, inventory.
Supply Chain – risks related to the company’s suppliers.
Manufacturing – risks related to the company’s manufacturing process including product quality and product recalls.
Human Capital – risks related to recruitment, training and retention of key employees, employee relationships & unions labor disputes, pension, and post retirement benefits, medical, health and welfare benefits, employee misconduct, employee litigation.

4. Technology & Innovation

Innovation / R&D – risks related to innovation and new product development.
Technology – risks related to the company’s reliance on technology.
Cyber Security – risks related to securing the company’s digital assets and from cyber attacks.
Trade Secrets & Patents – risks related to the company’s ability to protect its intellectual property and to infringement claims against the company as well as piracy and unlicensed copying.

5. Ability to Sell

Demand – risks related to the demand of the company’s goods and services including seasonality, reliance on key customers.
Competition – risks related to the company’s competition including substitutes.
Sales & Marketing – risks related to sales, marketing, and distribution channels, pricing, and market penetration.
Brand & Reputation – risks related to the company’s brand and reputation.

6. Macro & Political

Economy & Political Environment – risks related to changes in economic and political conditions.
Natural and Human Disruptions – risks related to catastrophes, floods, storms, terror, earthquakes, coronavirus pandemic/COVID-19.
International Operations – risks related to the global nature of the company.
Capital Markets – risks related to exchange rates and trade, cryptocurrency.