govinfo:USCOURTS-mdd-1_25-cv-00182-1

IN THE UNITED STATES DISTRICT COURT 
FOR THE DISTRICT OF MARYLAND 
 
ALAIN GIRAUDON, individually and 
on behalf of all others similarly situated, 
 
 Plaintiffs, 
 
v. 
 
INNOVATIVE INDUSTRIAL 
PROPERTIES, INC., et al., 
 
 Defendants. 
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Civil Action No. GLR-25-182 
 
 
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MEMORANDUM OPINION 
 THIS MATTER is before the Court on Defendants Innovative Industrial Properties, 
Inc. (“IIPR”), Alan Gold, Paul Smithers, David Smith, Benjamin C. Regin, and Catherine 
Hastings’ (collectively, “Defendants”) Motion to Dismiss (ECF No. 60). The Motion is 
ripe for disposition, and no hearing is necessary. See Local Rule 105.6 (D.Md. 2025). For 
the reasons set forth below, the Court will grant the Motion. 
I. BACKGROUND 
This litigation arises from alleged violations of the Securities Exchange Act of 1934 
(“SEA”). (Am. Compl. ¶ 1, ECF No. 50). Lead Plaintiff City of Birmingham Retirement 
and Relief System (“ Birmingham”) brings this action individually and on behalf of all 
others who acquired IIPR securities between February 26, 2024, and March 28, 2025, (the 
“Class Period”). (Id. at 4).1 
 
1 Unless otherwise noted, citations to page numbers refer to the pagination assigned 
by the Court’s Case Management/Electronic Files (“CM/ECF”) system. 

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A. Factual Background2 
IIPR is a publicly traded real estate investment trust that invests in and rents 
properties to state -licensed cannabis companies, primarily. ( Id. ¶¶ 13, 21). Via sale-
leaseback transactions, IIPR purchases properties from these companies, then leases those 
properties back to the companies. (Id. ¶ 56). The tenant-companies pay rent monthly, and 
a portion of the rent proceeds—IIPR’s primary source of income—goes to IIPR’s investors 
as dividends and stock buybacks. (Id. ¶¶ 2, 22). 
IIPR’s focus on the cannabis industry involves some risk. Most significantly, the 
sale of recreational cannabis remains illegal under federal law, exposing IIPR’s tenants to 
unfavorable tax treatment and lower profitability. (Id. ¶¶ 57–58). IIPR also has 
acknowledged some recent industry drawbacks: declining cannabis prices; increased labor 
and production costs; labor shortages; and “global supply chain issues.” (Id. ¶ 59). Despite 
these risks, Defendant Gold —IIPR’s co -founder and Executive Chairman, ( id. ¶ 14)—
stated that the sale -leaseback model has produced “above average returns” for IIPR , (id. 
¶ 57). Indeed, the federal illegality of selling recreational cannabis precludes cannabis 
companies from obtaining traditional bank loans, which enables IIPR, operating as a sort 
of non -traditional bank for the cannabis companies, to charge higher rents than the 
companies may have paid in interest on traditional bank loans. (Id.). 
 
2 Unless otherwise noted, the Court takes the following facts from the Consolidated 
Class Action Complaint (ECF No. 50) and accepts them as true. See Erickson v. Pardus, 
551 U.S. 89, 94 (2007). 

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IIPR’s investors, including Birmingham, were aware of the risks involved in IIPR’s 
business model. (Id. ¶ 60). As such, they valued the risk mitigation efforts that IIPR said it 
implemented: “robust due diligence practices”; monitoring tenants’ finances; visits to 
tenants’ operation sites; and meetings with tenants. (Id.). According to Birmingham, even 
as some tenants experienced losses and increased expenses during the Class Period , IIPR 
made new investments in its tenants and assured its investors that it continued to monitor 
its tenants’ finances regularly. ( Id. ¶¶ 60–61). Birmingham now allege s that these 
assurances were materially false or misleading. (Id. ¶¶ 64–65). 
1. The Defaulting Tenants 
Birmingham asserts that four of IIPR’s largest tenants —PharmaCann, Inc. 
(“PharmaCann”), 4Front Ventures Corp. (“4Front”), Gold Flora, LLC, and Tilt Holdings, 
Inc. (“Tilt”) (collectively, the “Defaulting Tenants”) —were struggling during the Class 
Period and that IIPR misled investors into believing Defendants were monitoring the 
situation closely and that business remained good. (Id. ¶¶ 3–4, 27). Specifically, before and 
during the Class Period, the Defaulting Tenants were failing to pay taxes and invoices, 
warning investors that the companies may not be able to continue as going concerns, 
experiencing “mounting expenses” and “limited cash flow,” and struggling to raise capital. 
(See id. ¶¶ 67–74). Eventually, in March 2025, all four companies defaulted on their 
obligations to IIPR , and the price of IIPR’s common stock plummeted as a result . ( Id. 
¶¶ 82–83). 

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a. PharmaCann, Inc. 
PharmaCann, a vertically integrated cannabis company, was IIPR’s “largest and 
longest-standing tenant.” (Id. ¶ 29). It had eleven leases with IIPR that constituted 17% of 
IIPR’s total contractual rent as of December 31, 2024. (Id. ¶ 30). Birmingham points to one 
of those leases as having a financial disclosure agreement that required PharmaCann to 
provide IIPR audited annual financial statements, unaudited quarterly financial statements, 
and copies of “budgets, forecasts and investor materials”—information that would not have 
been available to the public. (Id. ¶ 32). In February 2024, IIPR added a “cross -default 
provision” to PharmaCann’s lease s such that a default under any one of PharmaCann’s 
leases would trigger a default under all its leases. (Id. ¶ 33). 
Before and during the Class Period, PharmaCann was unable to pay its taxes in 
multiple states, which led to tax liens against it totaling approximately $500,000 by March 
2025. (Id. ¶ 67). PharmaCann also failed to pay many vendors and third parties, prompting 
one vendor to file a lawsuit in December 2024 for over $1,000,000 in unpaid invoices. (Id. 
¶ 68(a)). PharmaCann defaulted on six of its leases in December 2024, which triggered 
defaults under all eleven leases. (Id. ¶ 82). IIPR and PharmaCann reached an agreement to 
resolve the defaults in January 2025. (Id.). PharmaCann defaulted again under nine of its 
leases in March 2025, and IIPR announced its plan to evict PharmaCann. (Id.). 
b. 4Front Ventures Corp. 
4Front “owns, operates, and manages cannabis cultivation and manufacturing 
facilities” in a few states. ( Id. ¶ 34). It had four leases with IIPR that constituted 5.7% of 
IIPR’s total contractual rents as of December 31, 2024. ( Id. ¶ 35). Birmingham points to 

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one of 4Front’s leases as having a financial disclosure provision that required 4Front and 
the tenant-subsidiary of 4Front to provide IIPR audited quarterly financial documents and 
consolidated annual financial statements—non-public information. (Id. ¶ 36). 
4Front failed to pay all its tax obligations for the 2022 to 2023 period . (Id. ¶ 67). 
Consequently, i n April 2024, Illinois and California filed tax liens against 4Front for 
$1,561,245 and $19,648 in back taxes, respectively, and in January 2025, the U.S. 
government filed a tax lien against 4Front for $15,000,000. (Id.). 4Front also failed to pay 
third parties, leading to at least three lawsuits in 2024—one for $68,000 in unpaid invoices, 
another for $25,000 in unpaid marketing fees, and a third for over $100,000 in unpaid 
invoices. (Id. ¶ 68(b)). 4Front experienced net losses and had negative working capital in 
2022, 2023, and 2024 (during th e Class Period) and warned its investors that auditors 
doubted whether 4Front could continue as a going concern. (Id. ¶¶ 69–70). 4Front 
struggled to cover its expenses and attempted to obtain a $10,000,000 loan from a specialty 
finance firm in 2023 but received only $4,400,000 “due to its inability to satisfy certain 
covenants.” (Id. ¶ 73(b)). Ultimately, 4Front defaulted on its rent obligations in March 
2025, and IIPR announced its intent to evict 4Front. (Id. ¶ 83). 
c. Gold Flora, LLC 
Gold Flora, like PharmaCann, is a vertically integrated cannabis company. ( Id. 
¶ 38). It had three leases with IIPR that constituted 2.9% of IIPR’s total contractual rent as 
of December 31, 2024. ( Id. ¶ 39). Like PharmaCann and 4Front, Gold Flora struggled to 
pay its vendors, resulting in lawsuits. (Id. ¶ 68(c)). In September 2024, a California court 
entered a $6,000,000 judgment against Gold Flora for failure t o pay the consideration in 

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an asset purchase agreement, and in October 2024, a supplier sued Gold Flora for more 
than $250,000 in unpaid invoices. (Id.). Gold Flora also suffered from net losses and had 
negative working capital in 2022, 2023, and 2024 (during the Class Period), and it warned 
investors of auditors’ doubts that Gold Flora could continue as a going concern. (Id. ¶¶ 69–
70). Gold Flora struggled to raise funding to pay off its debts and, faced with limited 
options, secured a private loan of $6,900,000 with a high interest rate of about 40%. ( Id. 
¶ 73(a)). By March 27, 2025, Gold Flora owed over $52,000,000 to lenders and over 
$60,000,000 to unsecured creditors and filed a petition for dissolution. ( Id. ¶ 68(d)). Gold 
Flora ultimately defaulted on its rent obligations to IIPR in March 2025, and IIPR 
announced its intent to evict Gold Flora. (Id. ¶ 83). 
d. Tilt Holdings, Inc. 
Tilt is “a business solutions provider to the global cannabis industry” that had two 
leases with IIPR constituting 2.2% of IIPR’s total contractual rent as of December 31, 2024. 
(Id. ¶ 42–43). Tilt, like 4Front and Gold Flora, reported net losses and had negative 
working capital in 2022, 2023, and 2024 (during the Class Period) and warned investors of 
auditors’ doubts that it could continue as a going concern. ( Id. ¶¶ 69–70). Tilt also had 
difficulties raising capital after a change in one supplier’s payment terms in 2023 forced 
Tilt to obtain additional financing and seek waiver s from default provisions in other 
agreements. ( Id. ¶ 73(c)). Tilt was still paying default rates of 24% and 25% as of 
December 31, 2024. (Id.). Tilt eventually defaulted on its obligations to IIPR alongside the 
other Defaulting Tenants in March 2025 , and IIPR announced its intent to evict Tilt. (Id. 
¶¶ 82–83). 

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2. Defendants’ Statements During the Class Period 
Birmingham alleges that, as the Defaulting Tenants’ financial conditions declined, 
Defendants made either materially false or materially misleading statements regarding 
IIPR’s oversight of its tenants and its investments in the Defaulting Tenants during the 
Class Period. (Id. at 29, 67). Birmingham specifically points to statements in IIPR’s U.S. 
Securities and Exchange Commission (“SEC”) filings, press releases, earnings conference 
calls, and analyst and media reports as the bases of its allegations. (Id. at 4). 
a. Oversight and Monitoring of Tenants 
On February 27, 2024, IIPR filed a Form 10 -K with the SEC (“FY23 10 -K”) in 
which it stated that it “utilitze[d] rigorous underwriting standards for evaluating 
acquisitions and potential tenants to ensure that they meet our strategic and financial 
criteria,” “evaluate[d] the credit quality of [its] tenants and any guarantors on an ongoing 
basis,” “monitor[ed] the payment history data for all of [its] tenants and, in some 
instances, . . . monitor[ed] [its] tenants by periodically conducting site visits and me eting 
with the tenants to discuss their operations.” (Id. ¶¶ 86–87, 89). The FY23 10-K also stated 
that IIPR’s management team “perform[ed] due diligence investigations of [IIPR’s] 
potential tenants, related guarantors and their properties, operations and prospects, of 
which there is generally little or no publicly available operating and financial information.” 
(Id. ¶ 91). 
On March 4, 2024, IIPR published a “Company Presentation” on its website. (Id. 
¶ 95). One slide in the presentation covered IIPR’s “Underwriting & Monitoring” 
processes, which included “[e]valuation of financial projections,” “ [d]etailed review of 

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financial statements, strategic initiatives, and growth plans,” [q]uarterly reviews and 
requests for information pertaining to financials and ongoing operations of all properties,” 
and “[m]eetings with tenants to talk through operations and financials.” (Id. at 34). 
On August 6, 2024, Defendants held a conference call with investors and investment 
analysts in which Defendants Gold, Regin (IIPR’s Chief Investment Officer , (id. ¶ 17)), 
and Smithers (IIPR’s co -founder, President, and Chief Executive Officer , (id. ¶ 15)) 
commented on IIPR’s “highly selective” underwriting process, the continued success of 
the sale-leaseback concept, and the “quality and strength of [their] tenants” as “some of the 
best operators in the industry,” (id. ¶¶ 101, 103, 106, 110, 114). 
On November 7, 2024, Defendants held an earnings call with investors and 
investment analysts. (Id. ¶ 117). Analysts asked about tenants that paid partial or no rent in 
the past, how Defendants handled those situations , and Defendants’ decision to continue 
investing in those tenants’ businesses. ( Id. ¶¶ 118, 127, 134). Gold and Smithers 
emphasized their continued monitoring of their tenants and discussed their varying 
approach to unusual issues, like supply chain issues during the COVID -19 pandemic, 
versus their “aggressive” approach when a tenant stops paying rent altogether. (Id. ¶¶ 119, 
123). Gold also, in response to a question about Defendants’ continued investments in 
tenants even though issues seemed to arise just as quickly as they were resolved, stated that 
“we’ve been paid a very high adjusted rate of return for what we believe is a very—a much 
lower risk—risk profile.” (Id. ¶¶ 127–28). Regin further defended Defendants’ investments 
in tenants that had faced some issues recently, explaining that they “look at each of these 

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situations individually, and we’re looking to maximize [the] value of our portfolio, and we 
feel very positive about the future resolution for these issues.” (Id. ¶ 131). 
On December 20, 2024, IIPR announced that PharmaCann defaulted on all its 
leases. (Id. ¶ 139). Birmingham alleges that “Defendants moved quickly to assure investors 
that matters with PharmaCann were being handled appropriately and being resolved 
quickly.” (Id. ¶ 140). Then, on January 30, 2025, IIPR issued a press release stating that it 
reached an agreement with PharmaCann to resolve the defaults. (Id. ¶ 141). IIPR reiterated 
the resolution of those defaults in another press release on February 19, 2025. ( Id. ¶ 145). 
Then on February 21, 2025, IIPR filed a Form 10 -K with the SEC (the “FY24 10 -K”), 
reporting its financial results for the fourth quarter and 2024 overall. (Id. ¶ 149). The FY24 
10-K explained that PharmaCann defaulted in December 2024 and that IIPR and 
PharmaCann resolved the defaults in January 2025 by amending PharmaCann’s leases such 
that rent was reduced or abated for all its properties. (Id.). IIPR stated that it used security 
deposits to cover the two months of defaulted rent. ( Id.). According to Birmingham, the 
FY24 10-K also “reiterated the many misstatements made in the FY23 10-K . . . .” (Id.). 
On February 20, 2025, Defendants held another conference call in which Smithers 
told investors and investment analysts that Defendants “reached a comprehensive 
resolution to PharmaCann’s defaults that included, among other things, PharmaCann 
recommencing rent payments on 9 of 11 leases in February, a required capital infusion by 
PharmaCann investors and a junior secured note issued to [IIPR].” (Id. ¶¶ 152–53). When 
asked about the risk for Defendants’ tenant base moving forward, particularly for the year 
2026, Gold suggested that such concerns were premature , and that Defendants were 

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monitoring the maturity of their tenants’ debts closely. ( Id. ¶¶ 156–57). Gold and Regin 
also reiterated Defendants’ commitment to monitoring and working closely with their 
tenants. (Id. ¶¶ 161, 164, 168, 172). 
Birmingham alleges that all these statements were materially false or misleading 
because Defendants “misled investors into believing that IIPR performed sufficiently 
robust and comprehensive due diligence on, and monitoring of, its tenants” when in fact 
their tenants were struggling financially. (Id. ¶ 173) In Birmingham’s view, Defendants 
either did not conduct the monitoring that they told investors they had, or Defendants did 
conduct such monitoring and concealed or misrepresented the truth of the tenants’ financial 
situations. (Id. ¶ 173) 
b. Investments in the Defaulting Tenants 
In its February 26, 2024 press release and FY23 10 -K, IIPR stated that it amended 
one of its lease agreements with PharmaCann “to increase the improvement allowance by 
$16.0 million, adjust base rent accordingly and extend the lease term.” ( Id. ¶¶ 176, 178). 
Regin mentioned this lease amendment during the February 27, 2024 conference call . (Id. 
¶ 184). IIPR also “touted a new amend ment to 4Front’s lease” in the FY23 10 -K that 
reduced the base rent for nine months (until September 30, 2024), deferred the payback of 
the security deposit, and increased the base rent for the rest of the lease term. (Id. ¶ 180). 
During the February 27, 2024 conference call, Regin informed investors and 
analysts that IIPR executed a lease amendment with PharmaCann to provide an additional 
$16 million of construction funding for a property in New York “as PharmaCann executes 
on its strategy to expand production capacity after being awarded an adult -use production 

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license” in late 2023. (Id. ¶ 184). One analyst asked what Defendants were “seeing on the 
ground” in New York and asked how they “expect[ed] the market to evolve going 
forward.” (Id. ¶ 187). Regin stated that Defendants were “happy to see the additional retail 
licenses being issued” and that, despite “some historical challenges,” Defendants “very 
much like[d] the position that [their] tenant partners [were] in” in New York. (Id.). Regin 
commented that there was a “tremendous amount of value in” PharmaCann’s New York 
property and said, “I think it sets PharmaCann up very well to take advantage of the 
wholesale opportunities that we’re going to see.” (Id.). 
During the same conference call, Defendant Hastings —IIPR’s Chief Operating 
Officer, (id. ¶ 18)—explained that IIPR amended one of 4Front’s leases for a property in 
Illinois to reduce the base rent through September 2024 because the property had been 
“under development since August 2021” and “experienced significant delays to get 
permanent power delivered to the building,” (id. ¶ 190). Hastings said the building secured 
permanent power in January 2024 and that Defendants “look[ ed] forward to this project’s 
completion in the near future.” (Id.). Hastings also reported that IIPR extended the term of 
all four of its leases with 4Front. (Id.). 
On May 8, 2024, IIPR released its financial results for the first quarter of 2024. (Id. 
¶ 193). IIPR filed its Form 10-Q with the SEC (the “1Q24 10-Q”) the following day. (Id.). 
The 1Q24 10 -Q reported IIPR’s $16 million construction funding investment in 
PharmaCann’s New York property and the extension of the lease on that property. ( Id. 
¶ 194). The 1Q24 10 -Q also reported the extensions of 4Front’s leases and the January 
2024 amendment to 4Front ’s lease on the Illinois property that had construction delays . 

12 
(Id. ¶ 196). Additionally, the 1Q24 10-Q stated that in April 2024, IIPR amended 4Front’s 
lease on the Illinois property “to provide an additional improvement allowance of $1.6 
million” and to adjust the base rent. ( Id.). Finally, the 1Q24 10-Q announced a new lease, 
executed in March 2024, with a tenant later identified as Gold Flora. (Id. ¶ 198). 
On May 9, 2024, Defendants held a conference call with investors and analysts to 
discuss IIPR’s 2024 first quarter results. (Id. ¶ 201). Regin Stated that IIPR executed two 
new leases with Gold Flora . (Id. ¶ 202). In discussing these and other new leases, Regin 
commented on “the strength of the [tenant-]operators and the credit upgrades ” that 
Defendants felt they received from the new leases. (Id.). Regin also mentioned the 
additional $1.6 million that IIPR invested in 4Front’s Illinois property “to round o ut 
development” of that facility. (Id. ¶ 205). 
On August 5, 2024, IIPR released its financial results for the second quarter of 2024. 
(Id. ¶ 208). IIPR filed its Form 10 -Q with the SEC (the “2Q24 10 -Q”) the following day. 
(Id.). Birmingham highlights the same information in the 2Q24 10-Q as in the 1Q24 10-Q 
regarding the $16 million investment in PharmaCann’s New York property, the extension 
of that lease, the extension of 4Front’s four leases, and the amendments to 4Front’s lease 
on the Illinois property, including the $1.6 million improvement allowanc e. (Id. ¶¶ 209, 
211). The 2Q24 10 -Q also stated that IIPR executed two new leases with Gold Flora in 
March 2024 (as reported in the 1Q24 10-Q) and May 2024. (Id. ¶ 213). 
On November 6, 2024, IIPR released its financial results for the third quarter of 
2024. (Id. ¶ 216). IIPR filed its Form 10-Q with the SEC (the “3Q24 10-Q”) the following 
day. (Id.). The 3Q24 -10-Q repeated the same information from the 1Q24 10 -Q and the 

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2Q24 10 -Q regarding the investments in PharmaCann ’s and 4Front’s properties, the 
amendments to some of those leases, and the new leases with Gold Flora. (Id. ¶¶ 217, 219, 
221). 
Birmingham alleges that by “touting” their investments in the Defaulting Tenants 
without disclosing the Defaulting Tenants’ dire financial situations, Defendants misled 
investors into believing that those investments would bring in more revenue when in fac t 
the Defaulting Tenants were on their way to defaulting on their rent obligations. (Id. ¶ 220). 
3. IIPR Stock Fluctuations 
After reporting its financial results for the third quarter of 2024, IIPR issued a press 
release on November 6, 2024, explaining that it applied $1.4 million of security deposits 
towards unpaid rents on four properties leased to 4Front, one property leased to Tilt, and 
one property leased to another tenant. (Id. ¶ 225). The press release also stated that IIPR 
collected partial rent payments from 4Front, Tilt, and another tenant in October 2024 and 
applied $0.9 million in security deposits to those rents. (Id.). On November 6, 2024, IIPR’s 
common stock price fell $9.34 per share (7.06%) down to $123 per share. (Id. ¶ 227). 
On November 7, 2024, IIPR held an earnings call in which it reported revenue of 
$76.5 million, which was less than the consensus estimate of $77.5 million and less than 
the $77.8 million in revenue reported for the same period in 2023. (Id. ¶ 224). Birmingham 
alleges that IIPR blamed the 2023 to 2024 revenue decrease, in part, on $1.3 million of 
uncollected rents and fees during the third quarter of 2024. ( Id.). During the earnings call, 
Smith also explained that IIPR applied the rest of 4Front’s security d eposits, $0.5 million, 
to cover October rents and that IIPR expected to collect rent from 4Front that was “well 

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below what [was] contractually do [sic] for the fourth quarter.” (Id. ¶ 226). On November 
7, 2024, IIPR’s common stock price fell another $12.93 per share (10.51%) down to about 
$110.70 per share. (Id. ¶ 227). According to Birmingham, investment analysts believed the 
drop in IIPR’s stock price was the result of the unpaid rents and raised concerns regarding 
IIPR’s “emergent tenant issues.” (Id. ¶ 228). 
On December 20, 2024, IIPR issued a press release explaining that, on December 
19, PharmaCann defaulted on six of its eleven leases, resulting in $4.2 million in unpaid 
rent, fees, and tax and insurance payments. (Id. ¶¶ 230–31). IIPR applied security deposits 
to cover the unpaid rent and imposed late penalties , plus interest. (Id.). The press release 
further stated that, due to the recent lease amendments, the six defaults triggered defaults 
under all eleven of PharmaCann’s leases, and that IIPR intended to “enforce its rights under 
the Leases aggressively,” potentially through eviction proceedings . (Id. ¶¶ 232–33). After 
the press release was issued on December 20, 2024, IIPR’s common stock price fell $21.68 
per share (22.74%) to about $73.66 per share. ( Id. ¶ 234). Investment analysts expressed 
concerns regarding “the magnitude of PharmaCann’s default” and the “[h]ealth of IIPR’s 
[t]enant [b]ase,” particularly as to whether other tenants were in “similar distress.” (Id. 
¶¶ 235–37). 
On January 30, 2024, IIPR issued another press release reporting that IIPR resolved 
the PharmaCann defaults by, among other things, covering rent for December 2024 and 
January 2025 with security deposits and imposing penalties. ( Id. ¶ 239). Investment 
analysts considered this a “welcome, but partial remedy of investor concerns.” (Id. ¶ 241). 

15 
That day, IIPR’s common stock price increased $6.71 per share (10.11%) to about $73.05 
per share. (Id. ¶ 240). 
On March 14, 2025, after the markets closed, IIPR issued a press release stating that 
PharmaCann defaulted on nine of its eleven leases for the month of March 2025, leading 
to $2.7 million in unpaid rent, fees, and tax and insurance payments. ( Id. ¶ 242). As in 
December 2024, IIPR explained that it intended to “enforce its rights under the Leases 
aggressively,” potentially through eviction proceedings. ( Id.). IIPR’s common stock price 
fell $5.41 per share (7.7%) to $64.21 by March 17, 2025. (Id. ¶ 243). Investment analysts 
expressed concerns regarding the second default, suggested that “other tenants might be 
facing similar difficulties,” and advised against investing in IIPR at that time. (Id. ¶ 244). 
On March 28, 2025, after the markets closed, IIPR issued another press release 
stating that 4Front, Gold Flora, and Tilt defaulted, leading to $13.1 million in unpaid rent, 
fees, and tax and insurance payments. ( Id. ¶ 246). Again, IIPR stated that it intended to 
“pursue its rights under such leases aggressively,” including through eviction, if necessary. 
(Id.). According to Birmingham, “IIPR presented these defaults as part of ‘a significant 
tenant replacement and renewal initiative aimed at enhancing the performance of its real 
estate portfolio and driving long -term value for shareholders.’” (Id. ¶ 247). IIPR 
acknowledged that challenges in the cannabis industry “negatively impacted the ability of 
certain of [its] tenants to make their lease payments,” and stated that it “believes that it will 
be better served by proactively seeking to refresh a substantial portion of its tenant base 
with more financially viable l ong-term tenants to better position [IIPR] for sustainable 
growth and improved financial performance.” (Id.) After IIPR issued this press release, its 

16 
common stock price fell $9.66 per share (15.15%) to $54.09 per share by March 31, 2025. 
(Id. ¶ 248). 
Birmingham contends that Defendants engaged in a “fraudulent scheme to 
artificially inflate the price of [IIPR’s] securities” through allegedly false or misleading 
statements and that, once “Defendants’ prior misrepresentation s and other fraudulent 
conduct were revealed” in November 2024 t hrough March 2025, IIPR’s stock price 
plummeted. (Id. ¶ 250). 
B. Procedural Background 
On January 17, 2025, Alain Giraudon filed a Class Action Complaint in this Court, 
individually and on behalf of all others who acquired IIPR securities during the Class 
Period, alleging violations of the SEA. (Compl. at 1–2, 18–22, ECF No. 1). The Court later 
appointed Birmingham as Lead Plaintiff. (Apr. 22, 2025 Mem. Op. at 11, ECF No. 38; Apr. 
4, 2025 Order at 2, ECF No. 39). On June 23, 2025, Birmingham filed an Amended 
Complaint, alleging two counts against all Defendants for: violations of § 10(b) of the SEA 
and SEC Rule 10b -5 (Count I); and violation s of § 20(a) of the SEA (Count II) . (Am. 
Compl. ¶¶ 274–80). Defendants filed the instant Motion to Dismiss on August 22, 2025. 
(ECF No. 60). Birmingham filed an Opposition on October 21, 2025, (ECF No. 65), and 
Defendants filed a Reply on November 20, 2025, (ECF No. 68). 
II. DISCUSSION 
A. Standard of Review 
The purpose of a Rule 12(b)(6) motion is to “test[] the sufficiency of a complaint,” 
not to “resolve contests surrounding the facts, the merits of a claim, or the applicability of 

17 
defenses.” King v. Rubenstein, 825 F.3d 206, 214 (4th Cir. 2016) (quoting Edwards v. City 
of Goldsboro, 178 F.3d 231, 243 (4th Cir. 1999)). A complaint fails to state a claim if it 
does not contain “a short and plain statement of the claim showing that the pleader is 
entitled to relief,” Fed.R.Civ.P. 8(a)(2), or does not “state a claim to relief that is plausible 
on its face,” Ashcroft v. Iqbal , 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. 
Twombly, 550 U.S. 544, 570 (2007)). A claim is facially plau sible “when the plaintiff 
pleads factual content that allows the court to draw the reasonable inference that the 
defendant is liable for the misconduct alleged.” Id. “Threadbare recitals of the elements of 
a cause of action, supported by mere conclusory statements, do not suffice.” Id. Though 
the plaintiff is not required to forecast evidence to prove the elements of the claim, the 
complaint must allege sufficient facts to establish each element. Goss v. Bank of Am., 
N.A., 917 F.Supp.2d 445, 449 (D.Md. 2013) (quoting Walters v. McMahen, 684 F.3d 435, 
439 (4th Cir. 2012)), aff’d, 546 F.App’x 165 (4th Cir. 2013). 
In considering a Rule 12(b)(6) motion, a court must examine the complaint as a 
whole, accept the factual allegations in the complaint as true, and construe the factual 
allegations in the light most favorable to the plaintiff. See Albright v. Oliver, 510 U.S. 266, 
268 (1994); Lambeth v. Bd. of Comm’rs of Davidson Cnty. , 407 F.3d 266, 268 (4th Cir. 
2005). But the court need not accept unsupported or conclusory factual allegations devoid 
of any reference to actual events, United Black Firefighters v. Hirst, 604 F.2d 844, 847 (4th 
Cir. 1979), or legal conclusions couched as factual allegations, Iqbal, 556 U.S. at 678 
(quoting Twombly, 550 U.S. at 555). 

18 
B. Analysis 
Defendants move to dismiss the Amended Complaint for failure to state a claim. 
(Defs.’s Mem. L. Supp. Mot. Dismiss [“Mot. Dismiss”] at 18 –36, ECF No. 60 -1).3 As 
explained in greater detail below, t he Court finds that Birmingham fail s to allege facts 
sufficient to satisfy the elements of its two claims and will dismiss the Amended 
Complaint. 
1. Count I – Violations of § 10(b) of the SEA and SEC Rule 10b-5 
In Count I of the Amended Complaint, Birmingham asserts violations of § 10(b) of 
the SEA and SEC Rule 10b -5 against all Defendants. (Am. Compl. ¶¶ 274–78). “Section 
10(b) of the [SEA] prohibits the use of ‘any manipulative or deceptive device or 
contrivance’ in connection with the sale of a security in violation of the SEC rules.” Yates 
v. Mun. Mortg. & Equity, LLC , 744 F.3d 874 , 884 (2014) (quoting 15 U.S.C. § 78j(b)). 
SEC Rule 10b-5, in turn, makes it unlawful: 
 
3 Defendants first move to dismiss the Amended Complaint as prolix. (Mot. Dismiss 
at 15). A plaintiff’s compliance with Rule 8’s “short and plain statement” requirement is 
left to the Court’s discretion. Plumhoff v. Cent . Mortg. Co., 286 F.Supp.3d 699, 702 
(D.Md. 2017) (quoting Stone v. Warfield , 184 F.R.D. 553, 555 (D.Md. 1999)). 
Birmingham’s Amended Complaint is lengthy, but Defendants consented to, and the Court 
granted, Birmingham’s request to file the excess pages. (See Mot. File Excess Pages at 1–
2, ECF No. 49; June 24, 2025 Order, ECF No. 53). Although the Amended Complaint is 
sometimes repetitive, it is not so redundant, disorganized, or uninterpretable to warrant 
dismissal under Rule 8, particularly given the heighten ed pleading standard Birmingham 
must satisfy. Contra Plumhoff, 286 F.Supp.3d at 704 (dismissing complaint under Rule 8 
because it was “way too long, detailed and verbose for either the Court or the defendants 
to sort out the nature of the claims or evaluate whether the claims are actually supported 
by any comprehensible factual basis” (quoting Belanger v. BNY Mellon Asset Mgmt., 
LLC, 307 F.R.D. 55, 58 (D.Mass 2015))). The Court, therefore, will not dismiss the 
Amended Complaint on this ground. 

19 
(a) To employ any device, scheme, or artifice to defraud, 
(b) To make any untrue statement of a material fact or to omit 
to state a material fact necessary in order to make the 
statements made, in the light of the circumstances under which 
they were made, not misleading, or 
(c) To engage in any act, practice, or course of business which 
operates or would operate as a fraud or deceit upon any person. 
17 C.F.R. § 240.10b-5. To state a claim under § 10(b), a plaintiff must allege: “(1) a 
material misrepresentation or omission by the defendant; (2) scienter; (3) a connection 
between the misrepresentation or omission and the purchase or sale of a security; (4) 
reliance upon the misrepresentation or omission; (5) economic loss; and (6) loss causation.” 
Yates, 744 F.3d at 884 (quoting Stoneridge Inv. Partners v. Scientific –Atlanta, Inc., 552 
U.S. 148, 157 (2008)). The plaintiff also must satisfy the heightened pleading requirements 
of Federal Rule of Civil Procedure 9(b) and the Private Securities Litigation Reform Act 
(“PSLRA”). Rule 9(b) requires a plaintiff to “state with particularity the circumstances 
constituting fraud,” which include “the time, place, and contents of the false 
representations, as well as the identity of the person making the misrepresentation and what 
he obtained thereby.” Weidman v. Exxon Mobil Corp., 776 F.3d 214, 219 (4th Cir. 2015 ) 
(quoting Harrison v. Westinghouse Savannah River Co. , 176 F.3d 776, 784 (4th Cir. 
1999)). Likewise, the PSLRA demands a heightened level of specificity: 
[As to any misleading statements or omissions,] the complaint 
shall specify each statement alleged to have been misleading, 
the reason or reasons why the statement is misleading, and, if 
an allegation regarding the statement or omission is made on 
information and belief, the complaint shall state with 
particularity all facts on which that belief is formed. 
[As to scienter,] the complaint shall, with respect to each act or 
omission alleged to violate this chapter, state with particularity 

20 
facts giving rise to a strong inference that the defendant acted 
with the required state of mind. 
15 U.S.C. § 78u-4(b)(1), (b)(2)(A). 
 Here, Defendants challenge the sufficiency of the Amended Complaint as to 
elements one (material misrepresentation or omission) and two (scienter).4 (Mot. Dismiss 
at 19, 28–29). The Court will address each element in turn. 
a. Material Misrepresentation or Omission 
As to the first element, Birmingham points to thirty -four statements Defendants 
made during the Class Period as allegedly material misrepresentations or omissions. (See 
Am. Compl. ¶¶ 87, 89, 91, 95, 103, 106, 110, 114, 119, 123, 128, 131, 141, 145, 149, 153, 
161, 168, 177, 178, 180, 184, 190, 194, 196, 198, 202, 205, 209, 211, 213, 217, 219, 221). 
To be actionable, these statements and omissions must meet three requirements: (1) they 
must be factual (i.e., “demonstrable as being true or false”); (2) the sta tements must be 
false or the alleged omissions “must render the statement [s] misleading”; and (3) the 
statements or omissions must be material. In re Marriot Int’l, Inc. Customer Data Sec. 
Breach Litig., 543 F.Supp.3d 96, 110 (D.Md. 2021) (quoting Longman v. Food Lion, Inc., 
197 F.3d 675, 682 (4th Cir. 1999)). As to materiality: 
A statement or omission of fact is material if there is a 
substantial likelihood that a reasonable purchaser or seller of a 
security (1) would consider the fact important in deciding 
whether to buy or sell the security or (2) would have viewed 
 
4 In one sentence, Defendants argue briefly that Birmingham also fails to establish 
elements four (reliance) and six (loss causation). (Mot. Dismiss at 33 –34). Defendants, 
however, provide no legal analysis to support this contention, either in their Motion or in 
their Reply, and the Court will not provide such analysis for them. ( See generally id.; 
Reply). 

21 
the total mix of information made available to be significantly 
altered by disclosure of the fact. 
Id. (quoting Longman, 197 F.3d at 683). Regarding omitted information, “Section 10(b) 
and Rule 10b -5 ‘do not create an affirmative duty to disclose any and all material 
information.’” In re Marriot , 543 F.Supp.3d at 111 (quoting Matrixx Initiatives, Inc. v. 
Siracusano, 563 U.S. 27, 44 (2011)). But disclosure is required “when necessary to 
make . . . statements made, in the light of the circumstances under which they were made, 
not misleading.” Id. (quoting Matrixx, 563 U.S. at 44). Thus, “companies can control what 
they have to disclose under [ § 10(b) and Rule 10b -5] by controlling what they say to the 
market.” Id. (quoting Matrixx, 563 U.S. at 45). 
i. Statements about Tenant Oversight and Due Diligence 
As described above, Birmingham alleges that Defendants made material 
misrepresentations and omissions during the Class Period regarding their due diligence 
practices and monitoring of their tenants. (See Am. Compl. at 29–66). The focus of these 
statements, generally, is that Defendants “utilize[d] rigorous underwriting standards,” 
conducted thorough due diligence investigations of potential tenants, and were “aware of 
what[] [was] going on with [their] tenants” during the Class Period. (Am. Compl. ¶¶ 87, 
119; see id. at 29–66). Birmingham alleges that these statements were materially false or 
misleading because at the time they were made, the Defaulting Tenants were struggling 
financially, which adequate due diligence and monitoring would have revealed, and 
because they gave investors the false impression that Defendants conducted sufficient 

22 
oversight “such that IIPR would have known the true financial condition of the Defaulting 
Tenants well before those tenants defaulted.” (Id. ¶ 88). 
To start, some of the challenged statements constitute “puffery” or opinions and, 
consequently, are not actionable. In re Marriot , 543 F.Supp.3d at 111 (“Statements of 
opinion or puffery generally are not actionable.”). Statements of puffery are “loosely 
optimistic statements that are so vague, so lacking in specificity, or so clearly constituting 
the opinions of the speaker, that no reasonable investor could find them important to the 
total mix of information available.” In re Emergent BioSolutions Inc. Secs. Litig. , No. 
DLB-21-955, 2023 WL 5671608, at *16 (D.Md. Sep. 1, 2023) (quoting Sinnathurai v. 
Novavax, Inc., No. TDC -21-2910, 2022 WL 17585715, at *18 (D.Md. Dec. 12, 2022)). 
Such statements are unactionable unless they are worded as guarantees or the speaker does 
not reasonably believe their statement. In re Marriot, 543 F.Supp.3d at 119 (quoting IBEW 
Local Union No. 58 Pension Tr. Fund & Annuity Fund v. Royal Bank of Scot. Grp., PLC, 
783 F.3d 383, 392 (2d Cir. 2015)). 
Here, Gold stated during the August 6, 2024 earnings call that “the sale -leaseback 
concept is our basic business model that we’ve been following since [sic] for the last 8 
years, and it seems to be —it has continued to produce what we think are below average 
risks with above average returns.” (Am. Compl. ¶ 103). Also during that call, Regin stated, 
“we really feel that we have some of the best operators in the industry in our portfolio and 
have continued to support them over the years,” and Smithers later stated, “we believe that 
there are tenants that because of supply chain issues or getting up to speed with the 
changing environment that there will be some difficulties. But in general, we’re very —as 

23 
[Regin] and [Hastings] has [sic] indicated, we’re very pleased with the quality and strength 
of our tenants.” (Id. ¶¶ 110, 114). Additionally, during the November 7, 2024 earnings call, 
Gold stated, “[t]he difference [between IIPR and other real estate companies] is we’ve been 
paid a very high adjusted rate of return for what we believe is a very—a much lower risk—
risk profile.” (Id. ¶ 128). These statements, which “utilize[e] opinion and exaggeration” to 
describe the strengths of IIPR’s tenants and busines s model generally are not worded as 
guarantees, and Birmingham does not allege that Defendants did not believe these opinions 
at the time they expressed them. In re Emergent, 2023 WL 5671608, at *16 (quoting Dunn 
v. Borta, 369 F.3d 421, 431 (4th Cir. 2004)). The statements, therefore, are unactionable 
under § 10(b). 
Statements of opinion, like statements of puffery, are unactionable under § 10(b), 
unless (1) “the speaker does not actually hold the stated belief”; (2) the statement “contains 
an embedded statement of fact that is false”; or (3) “the statement omits material facts about 
the speaker ’s ‘inquiry into or knowledge concerning a statement of opinion’ and those 
facts ‘conflict with what a reasonable investor would take from the statement itself.’” In re 
Marriot, 543 F.Supp.3d at 119 (quoting Omnicare, Inc. v. Laborers Dist. Council Const. 
Indus. Pension Fund, 575 U.S. 175, 184–85 (2015) ). As to the third category , “[t] he 
investor must identify particular (and material) facts going to the basis for the issuer’s 
opinion . . . whose omission makes the opinion statement at issue misleading to a 
reasonable person reading the statement fairly and in context.” Omnicare, 575 U.S. at 194. 

24 
In this case, during the November 7, 2024 earnings call, Regin stated: 
I just wanted to touch on your question on [4Front]. I mean we 
did make an investment in the Illinois facility to round out 
construction there. We do have four individual lease s with 
[4Front], but that is by far the largest, and there was significant 
delays in construction, which understandably had an impact on 
the overall cash flow. 
That asset is in Illinois, which is one of the top 5 markets in the 
U.S. We feel very confident in the Illinois market. And as 
[Smithers] described, we look at each of these situations 
individually, and we’re looking to maximize value of our 
portfolio, and we feel very positive about the future resolution 
for these issues [in the Illinois facility]. 
* * * 
This asset, given the size and what we think this is going to 
produce once this is fully up and running, is going to be very 
meaningful to their business overall going into 2025. We really 
like the Illinois market. We think it’s going to be a tremendous 
boost to their business once . . . [the] Illinois building is fully 
operational. 
(Am. Compl. ¶¶ 131, 135). Birmingham alleges that these statements are misleading 
because Regin omitted facts regarding Defendants’ allegedly insufficient due diligence and 
the Defaulting Tenants’ financial situations. ( Id. ¶¶ 132, 136 ). As explained below, 
however, Birmingham does not allege sufficient facts demonstrating that Defendants did 
not conduct due diligence or relevant research before Regin expressed this opinion. 
Birmingham also does not allege what information Defendants knew about the Defaulting 
Tenants’ financial situations when Regin made this statement. See Handal v. Innovative 
Indus. Props., Inc., 157 F.4th 279, 297 (3d Cir. 2025) (“[I]n the third Omnicare scenario, 
the speaker is aware of what she is omitting or that there is foreseeably material information 
that could affect the veracity of her opinion and that she has failed to investigate.”). Even 

25 
assuming Regin knew that 4Front was struggling with taxes, unpaid invoices, and raising 
capital before the November 7 earnings call, this information would not render misleading 
Regin’s opinions regarding the business potential of 4Front’s Illinois facility following 
IIPR’s construction investment. 
As to the remaining statements, Birmingham’s allegations that Defendants “did not 
have a rigorous tenant -oversight process” or did not conduct “sufficiently robust and 
comprehensive due diligence on, and monitoring of, its tenants” fail for a few reasons . 
(Am. Compl. ¶ 88). To start, in some of the challenged statements, Defendants did not 
“promise[] that [their] diligence would meet any particular standard of thoroughness.” 
Handal, 157 F.4th at 295. For example, in the FY23 10-K and FY24 10-K, IIPR states: 
We evaluate the credit quality of our tenants and any 
guarantors on an ongoing basis. In addition, we monitor the 
payment history data for all of our tenants and, in some 
instances, we monitor our tenants by periodically conducting 
site visits and meeting with the tenants to discuss their 
operations. 
* * * 
We rely on our management team to perform due diligence 
investigations of our potential tenants, related guarantors and 
their properties, operations and prospects, of which there is 
generally little or no publicly available operating and financial 
information. 
(Am. Compl. ¶¶ 89, 91, 149). 5 Even if Defendants conducted subpar due diligence and 
“missed obvious red flags,” that fact would not render these statements false or misleading 
 
5 Defendants make similar statements in the investor presentation (specifically those 
regarding quarterly reviews and meetings with tenants) and during the February 20, 2025 
earnings call. (Am. Compl. ¶¶ 95, 114, 119, 168). 

26 
because they contain no promises that Defendants’ due diligence would meet a certain 
standard. See Handal, 157 F.4th at 295. 
 In other statements, Defendants characterize their underwriting and oversight 
practices as meeting a certain degree of thoroughness. For example, in the FY23 10-K and 
FY24 10 -K, IIPR states: “We utilize rigorous underwriting standards for evaluating 
acquisitions and potential tenants to ensure that they met our strategic and financial 
criteria.” (Am. Compl. ¶¶ 87, 149). Similarly, d uring the August 6, 2024 earnings call, 
Regin stated: 
[Defendants] are still highly selective on the types of 
opportunities in markets we like with tenants we like as we 
have been since our inception. 
* * * 
We, of course, will look at new opportunities to work with new 
operators as we see fit with management teams that we like that 
have strong financials, track record of performance in the same 
rigorous underwriting criteria that we’ve used historically for 
our existing tenants. 
(Id. ¶¶ 106, 110). 6 Birmingham, however, relies on mere speculation to reach the 
conclusion that Defendants’ due diligence efforts did not meet the standards described in 
the challenged statements. The two cases that Birmingham cites for support are 
distinguishable. (See Lead Pl.’s Opp’n Def.s’ Mot. Dismiss [“Opp’n”] at 20–21, ECF No. 
65). In In re Genworth Fin ancial Inc. Securities Litigation, 103 F.Supp.3d 759 (E.D.Va. 
2015), the defendant told investors in 2013 that it was conducting a “deep review” of its 
 
6 Defendants make similar statements in the investor presentation (specifically those 
regarding “detailed” reviews of background and management and “detailed” financial 
underwriting) and during the February 20, 2025 earnings call . (Am. Compl. ¶¶ 95, 157, 
161, 164, 172). 

27 
business, but the defendant later admitted that its last “deep review” occurred in 2012 and 
that the scope of the 2013 review was much narrower. Id. at 766–67, 772–74. Similarly, in 
In re James River Group Holdings, Ltd. Securities Litigation, No. 3:21-cv-444 (DJN), 2023 
WL 5538218 (E.D.Va. Aug. 28, 2023), the defendants told investors that they “continually 
monitor[ed] reserves using new information” and concluded that their reserves were 
“reasonable” and “appropriate,” but former employees’ deposition testimonies and the 
defendants’ internal documents showed that the defendants had no internal policy for 
monitoring reserves and that they kept reserves artificially low . Id. at *3 –4, 11. Here, 
Birmingham does not allege that Defendants admitted to not conducting the due diligence 
they described, nor does Birmingham cite to testimony or internal documents 
demonstrating the falsity or misleading nature of Defendants’ due diligence statements.7 
Even if not false, Birmingham alleges that Defendants’ statements are “‘materially 
misleading’ half-truths” in that Defendants conducted due diligence and regular monitoring 
of its tenants but “‘failed to disclose to investors what they knew about the Defaulting 
Tenants’ and their dire financial positions, which misled investors as to the risk of investing 
in IIPR.” (Opp’n at 20 (quoting Am. Compl. ¶¶ 87–88)). This argument fails as well. 
 
7 In another portion of the challenged statements, Defendants do not mention their 
due diligence practices at a ll. (See Am. Compl. ¶ 123 (discussing how Defendants work 
with tenants who face operating issues ); id. ¶¶ 141, 145, 149, 153 (announcing and 
discussing the resolution of PharmaCann’s first default)). Birmingham alleges that these 
statements are false for the same reason as the due diligence -related statements: because 
IIPR allegedly “did not have a rigorous t enant-oversight process . . . .” (Id. ¶¶ 125, 142, 
146, 150, 154). The absence of rigorous due diligence practices, however, would not render 
these statements false, as Defendants do not mention such practices in these statements. 

28 
First, as to the “red flags” described in the Amended Complaint, Birmingham does 
not allege whether or when Defendants became aware of such information. For example, 
Birmingham alleges that: 
no later than January 30, 2024, PharmaCann was unable to pay 
its state tax obligations in Ohio, New York, and Illinoi s, 
resulting in these states filing numerous tax liens against 
PharmaCann for unpaid taxes totaling nearly half a million 
dollars by the end of the Class Period. Similarly, 4Front was 
not paying all of its federal income taxes for the period 2022 to 
2023, w hich on January 3, 2025, result ed in the U.S. 
government filing a tax lien against 4Front for $15,000,000. 
Illinois and California also placed tax liens on 4Front in April 
2024 for failure to pay $1,561,245 and $19,648 in back taxes, 
respectively. 
(Am. Compl. ¶ 67). Birmingham does not allege that Defendants learned of these unpaid 
taxes before, contemporaneously with, or after the filings of the tax liens and, therefore, 
does not adequately allege that Defendant knew about these tax issues before making any 
of the challenged statements. The same can be said regarding the unpaid invoices and 
resulting lawsuits, the Defaulting Tenants’ “going concern” warnings, and the issues with 
raising capital , (see id. ¶¶ 68–73)—Birmingham does not allege when Defendants 
allegedly learned of those red flags and, therefore, does not adequately allege that 
Defendants knew of this information prior to any of the challenged statements, In re Under 
Armour Sec. Litig., 342 F.Supp.3d 658, 680 (D.Md. 2018) (“To be actionable, a statement 
or omission must have been misleading at the time it was made; liability cannot be imposed 
on the basis of subsequent events.” (quoting In re NAHC, Inc. Sec. Litig., 306 F.3d 1314, 
1330 (3d Cir. 2002))). 

29 
 Even if Defendants did learn of these red flags prior to making the challenged 
statements, investors also had access to that information through public records (i.e., tax 
liens, court filings, and SEC filings). (Opp’n at 12 (stating that “facts about each Defaulting 
Tenant’s dire financial distress . . . c[a]me from SEC disclosures, public sources, and court 
filings”)). Disclosure of information that is “already publicly available does not materially 
alter the ‘total mix’ of available information” and, therefore, omission of that information 
is immaterial. Smith v. Cir. City Stores, Inc., 286 F.Supp.2d 707, 721 (E.D.Va. 2003); see 
also Hillson Partners Ltd. P ’ship v. Adage, Inc. , 42 F.3d 204 (4th Cir. 1994) (“‘The 
securities laws require disclosure of information that is not otherwise in the public 
domain,’ not information that has already been publicly—indeed, officially—disclosed by 
the company.” (quoting Sailors v. N. States Power Co., 4 F.3d 610, 613 (8th Cir.1993) )). 
Consequently, Defendants’ alleged failure to disclose the red flags contemporaneously 
with the challenged statements is excusable because that information was “made credibly 
available to the market by other sources.” Raab v. Gen. Physics Corp., 4 F.3d 286, 289 (4th 
Cir. 1993) (quoting In re Apple Computer Sec. Litig. , 886 F.2d 1109, 1115 (9th Cir. 
1989)); see also In re Constellation Energy Grp., Inc. Secs. Litig., 738 F.Supp.2d 614, 628 
(D.Md. 2010) (finding no material misrepresentation in part because plaintiff failed to 
allege that defendant “knew more than the market did about [financial services firm’s] 
volatile situation prior to [its] bankruptcy such that [defendant] should have specifically 
disclosed the risks posed by [defendant’s] counterparty relationship to” th e financial 
services firm). 

30 
Second, Birmingham fails to plead materiality as to any non-public information that 
Defendants allegedly obtained from the Defaulting Tenants. Birmingham alleges that 
Defendants had access to non -public financial information from the Defaulting Tenants 
due to the disclosure requirements in some tenants’ leases. (See Am. Compl. ¶¶ 32, 36, 40, 
44, 75–76). Birmingham, however, does not state what information Defendants allegedly 
obtained or if it differed from what was available to the market via public record and, 
consequently, has not demonstrated that a reasonable investor “would have viewed the total 
mix of information made available to be significantly altered by disclosure of” th at 
information. In re Marriot, 543 F.Supp.3d at 110 (quoting Longman, 197 F.3d at 683). 
Birmingham also does not allege when Defendants allegedly obtained non -public 
financial information from the Defaulting Tenants. Birmingham assumes that Defendants 
obtained financial information from all four Defaulting Tenants based on disclosure 
requirements in one of IIPR’s leases with PharmaCann and one of its leases with a Gold 
Flora subsidiary. (Am. Compl. ¶¶ 32, 36, 40, 44). Per those two disclosure requirements—
which, based on Birmingham’s descriptions, were not exactly the same , (id. ¶¶ 32, 36)—
Birmingham speculates that all the Defaulting Tenants were required to, and did, provide 
quarterly and year-end financial information to Defendants , (id. ¶¶ 40, 44). Although the 
Court views all allegations in the light most favorable to Birmingham at this stage of the 
proceedings, see Albright, 510 U.S. at 268, the Court need not “accept as true allegations 
that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences ,” 
Veney v. Wyche , 293 F.3d 726 , 730 (4th Cir. 2002) (quoting Sprewell v. Golden State 
Warriors, 266 F.3d 979, 988 (9th Cir. 2001)); see also Twombly, 550 U.S. at 555 (“Factual 

31 
allegations must be enough to raise a right to relief above the speculative level . . . .”). And 
the Court declines to accept as true these conclusory inferences within inferences. 
Finally, Birmingham’s overall argument that Defendants misled investors about the 
risks of investing in IIPR by touting their due diligence and monitoring practices is 
unreasonable given the detailed and repeated warnings Defendants made regarding such 
risks, including the possibility that IIPR’s tenants could default. For example, in IIPR’s 
FY23 10-K, after stating that its management team conducts due diligence investigations , 
IIPR acknowledged the potential limitations of its due diligence efforts and the possibility 
of default: 
We may not learn of all the material information we need to 
know regarding these businesses through our investigations , 
and these businesses are subject to numerous risks and 
uncertainties, including but not limited to regulatory risks and 
the rapidly evolving market dynamics of each state’s regulated 
cannabis program. As a result, it is possible that we could enter 
into a sale -leaseback arrangement with tenants or otherwise 
lease properties to tenants that ultimately are unable to pay rent 
to us , which cou ld adversely impact our cash available for 
distributions. 
Many of our existing tenants are, and we expect that many of 
our future tenants will be, companies with limited histories of 
operations that are not profitable when they enter triple -net 
leasing arrangements with us and, therefore, may be unable to 
pay rent with funds from operations. 
* * * 
Some of our tenants may be subject to significant debt 
obligations and may rely on debt financing to make rent 
payments to us. Tenants that are subject to significant debt 
obligations may be unable to make their rent payments if there 
are adverse changes in their business plans or prospects, the 
regulatory environment in which they operat e or in general 
economic conditions. In addition, the payment of rent and debt 

32 
service may reduce the working capital available to tenants for 
the start-up phase of their business. Furthermore, we may be 
unable to monitor and evaluate tenant credit quality on an on -
going basis. 
(FY23 10-K at 26, ECF No. 60 -5 (emphasis added)). 8 IIPR also notified investors of 
previous defaults by other tenants: 
In July 2022, Kings Garden defaulted on its obligations to pay 
rent at all of the properties it leases with us, and pursuant to a 
confidential, conditional settlement agreement executed on 
September 11, 2022 between us and Kings Garden, we 
terminated the l eases for two properties that were in 
development or redevelopment as of December 31, 2023 and 
regained possession of those properties. In September 2023, 
we regained possession of the four remaining properties that 
Kings Garden had occupied, where Kings G arden paid 
stipulated rent during its period of occupancy until September 
20, 2023. 
In November 2022, Parallel defaulted on its obligations to pay 
rent at one of our properties in Pennsylvania, and we regained 
possession of that property in October 2023. In February 2023, 
Parallel also defaulted on its obligations to pay rent at one of 
our properties in Texas, and we regained possession of that 
property in March 2023. 
In November 2022, Green Peak defaulted on its obligations to 
pay rent at one of our properties in Michigan. In March 2023, 
a receiver was appointed over substantially all of Green Peak’s 
assets, and we subsequently regained possession of one 
property that was under redevelopment as a regulated cannabis 
cultivation and processing facility and three retail properties in 
 
8 The parties do not challenge the authenticity of the documents that Birmingham 
references in its Amended Complaint and which Defendants attach as exhibits. The Court, 
therefore, may rely on these documents when ruling on Defendants’ motion to dismiss. In 
re USEC Sec. Litig. , 190 F.Supp.2d 808 , 812–13 (D.Md. 2002) (“In ruling on a motion 
to dismiss a securities fraud complaint, the Court is entitled to rely on public documents 
quoted by, relied upon, incorporated by reference in or otherwise integral to the complaint, 
and such reliance does not convert such a motion into one for summary judgment.”), aff’d 
and remanded sub nom., Cohen v. USEC, Inc., 70 F.App’x 679 (4th Cir. 2003). 

33 
Michigan. We also expect to regain possession of the 
remaining regulated cannabis cultivation and processing 
facility still occupied by the receiver on March 1, 2024. 
(Id. at 27). IIPR references or restates the same warnings and the same or additional default 
notifications in its other SEC filings and at the beginning of each conference call that 
Birmingham quotes in the Amended Complaint. ( See FY24 10-K at 26–28, ECF No. 60 -
6; 1Q24 10 -Q at 65, ECF No. 60 -7; 2Q24 10 -Q at 39, ECF No. 60 -8; 3Q24 10 -Q at 71, 
ECF No. 60-9; Feb. 27, 2024 Earnings Call at 3, ECF No. 60 -11; May 9, 2024 Earnings 
Call at 3, ECF No. 60 -12; Aug. 6, 2024 Earnings Call at 3, ECF No. 60 -13; Nov. 7, 2024 
Earnings Call at 3, ECF No. 60 -14; Feb. 20, 2025 Earnings Call at 3, ECF No. 60 -15). 
Conducting thorough due diligence does not mean that the risks Defendants warned its 
investors about would not materialize, and Birmingham provides no allegations to suggest 
that a reasonable investor would believe otherwise. See In re Marriot , 543 F.Supp.3d at 
115 (rejecting plaintiff’s argument that defendant’s statements regarding due diligence 
related to its integration with another entity misled investors into thin king there were “no 
issues that would impede the merger” because “‘[w]orking hard’ on due diligence and 
integration does not mean that there would be no issues, and Plaintiff provide[d] no factual 
allegations to support the proposition that a reasonable investor would believe otherwise”). 
For all the reasons stated above, Birmingham fails to allege sufficient facts showing 
that Defendants’ statements regarding due diligence and monitoring were either false or 
materially misleading. 

34 
ii. Statements about Investments in Defaulting Tenants 
In the second category of statements , Birmingham alleges that Defendants made 
material misrepresentations and omissions during the Class Period regarding their 
investments in the Defaulting Tenants and amendments to their leases . (See Am. Compl. 
at 67–89). Birmingham alleges that these statements were materially misleading because 
such statements “put in play the issue of what Defendants knew about [the Defaulting 
Tenants] that would undercut Defendants’ touting of IIPR’s new investment[s],” and by 
failing to disclose such information, the challenged statements “misled investors into 
believing that additional investments in [the Defaulting Tenants] were beneficial to IIPR” 
and would “generate additional rental revenues, when, in reality, . . . [the Defaultin g 
Tenants were] in dire financial straits and would soon not be able to pay rent.” (Id. ¶ 179). 
Birmingham’s allegations that these statements are misleading fail for some of the 
same reasons as above . First, information about the red flags was available in the public 
record. ( See Opp’n at 12). Thus, Defendants’ failure to disclose those red flags to its 
investors contemporaneously with their statements regarding investments in the Defaulting 
Tenants and amendments to their leases is excusable because information on those red flags 
was “made credibly available to the market by other sources.” Raab, 4 F.3d at 289 
(quoting In re Apple , 886 F.2d at 1115). Second, Birmingham pleads insufficient facts 
demonstrating what non-public information Defendants knew and when they learned that 
information and, as a result, has not demonstrated that a reasonable investor “would have 
viewed the total mix of information made available to be significantly altered by disclosure 
of” that information. In re Marriot, 543 F.Supp.3d at 110 (quoting Longman, 197 F.3d at 

35 
683). Birmingham, therefore, has failed to plead sufficient facts to satisfy element one as 
to any of the challenged statements. 
a. Scienter 
Even if Birmingham had satisfied the first element, the Complaint fails on the 
second element: scienter. “To meet the scienter requirement for a Section 10(b) and Rule 
10b-5 claim, a plaintiff ‘must show that the defendant acted with “a mental state embracing 
intent to deceive, manipulate, or defraud.”’” Id. at 142 (quoting Zak v. Chelsea 
Therapeutics Int’l Ltd. , 780 F.3d 597, 606 (4th Cir. 2015)). To make this showing, “a 
plaintiff must allege that the defendant made the misleading statement or omission 
intentionally or with ‘severe recklessness’ regarding the danger of deceiving the 
plaintiff . . . A showing of mere negligence will not suffice.” Id. (quoting Tchrs.’ Ret. Sys. 
of LA v. Hun ter, 477 F.3d 162, 183 –84 (4th Cir. 2007)). Recklessness, in this context, 
encompasses acts that are “so highly unreasonable and such an extreme departure from the 
standard of ordinary care as to present a danger of misleading the plaintiff to the extent that 
the danger was either known to the defe ndant or so obvious that t he defendant must have 
been aware of it.” Id. (quoting Matrix Cap. Mgmt. Fund, LP v. BearingPoint, Inc., 576 F.3d 
172, 181 (4th Cir. 2009)). 
The PSLRA further imposes a heightened pleading standard for this element : a 
plaintiff must allege particularized facts demonstrating a “strong inference that the 
defendant acted with the required state of mind.” 15 U.S.C. § 78u-4(b)(2)(A). A “strong 
inference” is “more than merely plausible or reasonable—it must be cogent and at least as 
compelling as any opposing inference of nonfraudulent intent.” Tellabs v. Makor Issues & 

36 
Rts., Ltd., 551 U.S. 308, 314 (2007). The plaintiff must satisfy this pleading requirement 
as to each individual defendant and, for corporate defendants, the plaintiff must 
demonstrate that at least one authorized agent of the corporation acted with the requisite 
state of mind. In re Marriot, 543 F.Supp.3d at 142 (citing Tchrs.’ Ret. Sys. of LA, 477 F.3d 
at 183–84). 
To determine whether a plaintiff has satisfied this standard, a court must engage in 
a holistic analysis, considering “whether all of the facts alleged, taken collectively, give 
rise to a strong inference of scienter, not whether any individual allegation, scrutinized in 
isolation, meets that standard.” Tellabs, 551 U.S. at 323. Additionally, the court’s analysis 
must be comparative, considering “not only inferences urged by the plaintiff . . . but also 
competing inferences rationally drawn from the facts alleged.” Id. at 314. A complaint will 
survive this analysis only “if the malicious inference is at least as compelling as any 
opposing innocent inference.” Yates, 744 F.3d at 885 (quoting Zucco Partners, LLC v. 
Digimore Corp., 552 F.3d 981, 991 (9th Cir. 2009)). 
Here, Birmingham alleges that there is a strong inference of scienter because: 
(1) Defendants repeatedly told investors tha t they were 
engaged in oversight of IIPR’s tenants through due diligence 
and ongoing monitoring; (2) there were myriad red flags with 
the finances at four of IIPR’s largest tenants, which showed 
that these tenants were at high risk of default; (3) IIPR’s 
“robust due diligence” and “ongoing monitoring,” as the 
process was explained by Defendants, should have detected 
these red flags; therefore, it is plausible to infer either (a) IIPR 
was not doing the oversight it represented to investors, and 
Defendants’ st atements like “ we have said that we are 
monitoring all of our tenants, and we are monitoring all our 
tenants” ([ Am. Compl.] ¶ 165) were intentionally meant to 
deceive; or (b) the oversight did happen and Defendants either 

37 
chose not to share the known red flags with investors or 
disregarded those red flags. 
(Opp’n at 29). In support of this argument, Birmingham cites Gold, Regin, Smithers, and 
Hastings’ (collectively, the “Individual Defendants”) senior positions at IIPR and IIPR’s 
small size; their personal involvement in the tenant oversight process and the preparation, 
filing, and review of IIPR’s SEC filings; the alleged nature of due diligence investigations 
as a “core operation” of IIPR’s business; and Gold, Smithers, and Hastings’ alleged 
financial motives to engage in fraud. (Opp’n at 30–33; Am. Compl. ¶¶ 252–54). Even when 
viewed holistically, these allegations do not support a strong inference of scienter. 
 Birmingham is correct that, as stated in several challenged statements, the Individual 
Defendants held senior positions within IIPR and were involved in due diligence 
investigations and monitoring of potential and current tenants. (See, e.g., March 4, 2024 
Presentation at 17, ECF No. 60 -16 (identifying Individual Defendants as members of 
“Senior Management Team”); FY23 10 -K at 26 (“We rely on our management team to 
perform due diligence investigations of our potential tenants, related guarant ors and their 
properties, operations and prospects . . . .”); Feb. 20, 2025 Earnings Call at 9, 13 (“[W]e 
are, of course, watching each of our tenants and working with them very 
closely. . . . [W]e’re watching all of our tenants. We are doing deep dives into every single 
one of our tenants, including the strongest ones and the single state operators.” )). 
Defendants do not dispute that due diligence is a core operation of IIPR, nor do they dispute 
that the Individual Defendants assisted in preparing, filing, and reviewing IIPR’s SEC 

38 
filings. ( See, e.g. , FY23 10 -K at 87 (showing signatures of Smithers and Gold, among 
others not named in this lawsuit)). 
Allegations regarding seniority and involvement in core operations are relevant to 
the Court’s analysis , “provided, of course, that they are accompanied by particularized 
allegations that a defendant was aware of problems in those operations.” In re Emergent, 
2023 WL 5671608, at *26. “[W]e cannot impute factual knowledge to individuals merely 
based on their professional position or because ‘such knowledge relates to the business’s 
core operations.’” San Antonio Fire & Police Pension Fund v. Syneos Health Inc., 75 F.4th 
232, 242 (4th Cir. 2023) (quoting KBC Asset Mgmt. NV v. DXC Tech. Co., 19 F.4th 601, 
612 (4th Cir. 2021)). 
In this case, Birmingham does not provide detailed allegations demonstrating that 
the Individual Defendants knew that their due diligence process was deficient, if indeed it 
was. Birmingham suggests that, had sufficient due diligence investigations occurred, then 
the Individual Defendants would have known that the Defaulting Tenants were heading 
towards default. (Opp’n at 30 ). “But that proposition, in effect, merely argues that [the 
Individual] Defendants negligently performed due diligence . . . [a]nd mer e negligence 
cannot support a § 10(b) claim.” San Antonio Fire & Police Pension Fund, 75 F.4th at 242. 
Birmingham also fails to provide particularized allegations demonstrating whether 
or when the Individual Defendants learned of the red flags. See In re Emergent, 2023 WL 
5671608, at *26–27 (finding inference of scienter as to certain defendants who—as shown 
in emails , confidential witness testimonies, and personal admissions—had actual 
knowledge of “red flags,” but not as to other defendants for whom plaintiffs did not include 

39 
sufficient allegations of actual knowledge). Birmingham asks the Court to infer from the 
financial disclosure requirements in two of IIPR’s leases —one with PharmaCann and one 
with a subsidiary of 4Front—that all IIPR’s leases have such disclosure requirements; that 
the Individual Defendants receive d financial information from all the Defaulting Tenants 
(i.e., quarterly and annual financial statements and “budgets, forecasts and investor 
materials”); and that the Individual Defendants received that informati on before making 
the challenged statements. (Am. Compl. ¶¶ 32, 36, 40, 44 ). Birmingham also invites the 
Court to infer from descriptions of IIPR’s due diligence processes ( i.e., “Detailed review 
of financial statements, strategic initiatives, and growth plans”; “Quarterly reviews and 
requests for information pertaining to financials and ongoing operations of all properties”; 
“Meetings with tenants to talk through operations and financials ,” (March 4, 2024 
Presentation at 14)) that the Individual Defendants learned about the red flags and other 
unspecified non-public financial information before making the challenged statements, and 
that the information obtained indicated that the Defaulting Tenants were headed towards 
default, (Opp’n at 30 ). While these allegations may support a plausible inference of 
scienter, such stacking of “inference upon inference” cannot satisfy the heightened § 10(b) 
pleading standard. San Antonio Fire & Police Pension Fund, 75 F.4th at 243. 
Even if the Court infers that the Individual Defendants knew of the red flags before 
making the challenged statements, “[s]imply knowing this information would not be 
enough for scienter. [The Individual] Defendants would also have to know —or, at a bare 
minimum, be reckless to a risk —that declining to share that information would render” 
their statements about due diligence, investments, and lease amendments misleadin g to 

40 
investors. Id.; see also In re Constellation , 738 F.Supp.2d at 637 (“Even assuming 
[defendant placed the financial services firm on its internal credit-watch list before the firm 
filed for bankruptcy], it cannot be reasonably inferred that simply because [defendant] was 
concerned, along with the rest of the market, about [the firm’s] financial condition in the 
summer of 2008, it intentionally or recklessly concealed a material exposure to a company 
it somehow knew was on the verge of bankruptcy.”). Birmingham does not plead sufficient 
facts indicating that the Individual Defendants acted with such intent or reckless disregard, 
especially given Defendants’ extensive disclosures regarding the many financial 
challenges IIPR’s tenants likely would face and the risk of default . (See, e.g., FY23 10-K 
at 26–39); see also In re Marriot, 543 F.Supp.3d at 153 (finding that defendants’ repeated 
disclosures that they “may not be able to keep up with information, security, and privacy 
requirements and [were] not impervious to cyberattacks . . .weigh[ed] against an inference 
of scienter that the Individual Defendants were intentional or severely reckless in leading 
investors to believe the opposite”). 
In addition to seniority and involvement in core operations, Birmingham alleges that 
Gold, Smithers, and Hastings were motivated to engage in fraud because a portion of their 
2024 compensation depended on IIPR achieving certain “performance goals.” (Am. 
Compl. ¶¶ 256–59). Gold, Smithers, and Hastings all received Performance Share Units 
(“PSU”) in 2022, each of which “represented the right to receive one share of IIPR common 
stock if the applicable performance goals were achieved” by the end of 2024. (Id. ¶¶ 256, 
258). These PSUs would vest in December 2024, and the value of the PSUs depended on 
the relative performance of IIPR’s common stock from January 2022 to December 2024. 

41 
(Id. ¶ 256). Thus, according to Birmingham, Gold, Smithers, and Hastings had an incentive 
to keep the price of IIPR common stock artificially high to increase the cash dividends they 
would receive on their PSUs. (Id. ¶ 257). 
“Allegations that a defendant ‘would personally benefit from a special bonus ’ may 
support scienter.” City of Southfield Gen. Emps .’ Ret. Sys. v. Advance Auto Parts, Inc. , 
167 F.4th 637, 647 (4th Cir. 2026) (quoting Boykin v. K12, Inc. , 54 F.4th 175, 186 (4th 
Cir. 2022) ). But “motivations to . . . increase one ’s own compensation are common to 
every company and thus add little to an inference of fraud.” Id. (quoting Cozzarelli v. 
Inspire Pharms. Inc., 549 F.3d 618, 627 (4th Cir. 2008)). Moreover, although Defendants 
made sometimes optimistic statements regarding due diligence, investments, and lease 
amendments, they also made lengthy and oft -repeated risk warnings ; they announced 
unfulfilled rent obligations and explained IIPR’s response to such ; and they disclosed the 
first PharmaCann default immediately—just one day after it occurred. (See, e.g., FY23 10-
K at 26–39 (risk disclosures); Nov. 7, 2024 Earnings Call at 5–6 (discussing some tenants’ 
unpaid rent obligations and IIPR’s response); Am. Compl. ¶¶ 230–31 (Dec. 20, 2024 press 
release announced that PharmaCann defaulted on Dec. 19, 2024) ). These risk disclosures, 
discussions of unpaid rent, and quick self-reporting, all of which caused IIPR’s common 
stock price to decrease and resulted in Gold, Smithers, and Hastings having to forfeit their 
PSUs, (Am. Compl. ¶ 260), weigh against an inference of intent to defraud , see In re 
Marriot, 543 F.Supp.3d at 153 (finding that repeated risk disclosures weighed against 
inference of scienter); Yates, 744 F.3d at 892 (finding the fact that defendants “continued 

42 
to update investors about newly discovered weaknesses tend[ed] to negate an inference that 
the defendants acted with an intent to defraud”). 
Overall, Birmingham has shown that the Individual Defendants held senior 
positions at IIPR and participated in IIPR’s core operations. But without detailed 
allegations showing that the Individual Defendants had actual knowledge of any 
deficiencies in their due diligence or actual knowledge of the red flags, these allegations 
“are not sufficient to raise a strong inference of scienter. If they were, every corporate 
executive who participates in the day -to-day management of his company would be 
exposed to liability for securities fraud. ” In re Criimi Mae, Inc. Sec. Litig. , 94 F.Supp.2d 
652, 661 (D.Md. 2000). Birmingham also has shown that Gold, Smithers, and Hastings 
may have been financially motivated to keep IIPR’s common stock price artificially high 
to increase their compensation in December 2024. But Defendants’ regular announcements 
regarding certain tenants’ struggles and quick disclosure of PharmaCann’s first default, 
which, at least in part, caused Gold, Smithers, and Hastings to lose out on their extr a 
compensation, weighs against an inference of scienter. See In re Marriot, 543 F.Supp.3d at 
153; Yates, 744 F.3d at 892. 
As Birmingham says in its Opposition, its allegations arguably create a plausible 
inference that (1) Defendants did not conduct the oversight they claimed to be conducting 
and, thus, intentionally deceived investors when they touted their rigorous due diligence 
processes, or (2) Defendants did conduct such due diligence, discovered the red flags, and 
then intentionally concealed those red flags from investors or recklessly disregarded the 
risk that failing to disclose those red flags would render their stat ements misleading to 

43 
investors. (Opp’n at 2 9). But the PLSRA requires more than a plausible inference of 
scienter; it requires a strong inference of scienter. See Tellabs, 551 U.S. at 314. And the 
facts alleged here do not meet that higher standard. The more compelling inference is that, 
even assuming the Individual Defendants knew of the red flags before making the 
challenged statements, they believed that they adequately warned investors of the risks 
inherent to IIPR’s business, that additional investments and lease amendments would help 
address any financial distress and enable tenants to continue to pay rent , and that signs of 
financial distress among certain tenants did not foreclose or render misleading optimistic 
statements or announcements regarding investments, lease amendments, and due diligence 
processes. Birmingham, therefore, has failed to plead sufficient facts showing that the 
Individual Defendants acted with the requisite state of mind and, as a result, has failed to 
satisfy this element as to IIPR as well . In re Marriot, 543 F.Supp.3d at 142 (citing Tchrs.’ 
Ret. Sys. of LA, 477 F.3d at 183 –84). Accordingly, the Court will dismiss Count I of the 
Amended Complaint. 
2. Count II – Violations of § 20(a) of the SEA 
In Count II of the Amended Complaint, Birmingham alleges violations of § 20(a) 
of the SEA. (Am. Compl. ¶¶ 279–80). Section 20(a) of the SEA imposes joint and several 
liability upon “[e]very person who, directly or indirectly, controls any person liable under 
any provision of [15 U.S.C. §§ 78a–78rr] or of any rule or regulation thereunder” to the 
same extent as the liable, controlled person, “unless the controlling person acted in good 
faith and did not directly or indirectly induce ” the violative actions. 1 5 U.S.C. § 78t(a). 
“[T]o state a claim under § 20(a), a plaintiff must allege: ‘(1) a predicate violation of 

44 
§ 10(b) and (2) control by the defendant over the primary violator .’” In re Constellation , 
738 F.Supp.2d at 638–39 (quoting In re Mut. Funds Inv. Litig., 566 F.3d 111, 129–30 (4th 
Cir. 2009), rev’d sub nom. on other grounds , Janus Cap. Grp., Inc. v. First Derivative 
Traders, 564 U.S. 135 (2011)). Because § 20(a) requires a “predicate violation of § 10(b),” 
if a plaintiff fails to state a claim under § 10(b) or SEC Rule 10b-5, then the plaintiff also 
fails to state a claim under § 20(a). Id. (quoting In re Mut. Funds Inv. Litig. , 566 F.3d at 
130). 
Here, as stated above, Birmingham cannot state a claim under § 10(b) or SEC Rule 
10b-5. Consequently, Birmingham has failed to satisfy the first element of a § 20(a) claim, 
see id. at 638–39 (quoting In re Mut. Funds Inv. Litig., 566 F.3d at 130), and the Court will 
dismiss Count II of the Amended Complaint. 
III. CONCLUSION 
For the foregoing reasons, the Court will grant Defendants’ Motion to Dismiss the 
Consolidated Class Action Complaint (ECF No. 60). A separate Order follows. 
Entered this 27th day of May, 2026. 
 
 
 /s/ 
 George L. Russell, III 
 Chief United States District Judge 

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