NewLake CEO on Dividends, Tenant Risk and ‘Getting Paid to Wait’

NewLake Capital Partners collected all contractual rent in the first half of 2026, maintained its $0.43 quarterly dividend, and extended its credit facility to 2029 at a lower borrowing spread. CEO Anthony Coniglio sees those results as part of a longer task: keeping the company’s income and balance sheet strong while the cannabis industry waits for changes to its access to capital.

In an exclusive interview with IgniteIt, Coniglio explained what would make a previously rejected operator an acceptable tenant, how he separates stronger cash flow from a temporary improvement, when a vacant cannabis property might be better leased for another use, why NewLake extended its credit facility before maturity, and why some investors see its dividend as income. At the same time, they wait for a possible listing on a major exchange.

He also laid out the case he hears investors make for collecting the dividend while they wait for a potential major-exchange listing.

That case depends in part on the tenants paying NewLake’s rent—and on which operators the company is willing to back.

What would turn a rejected operator into an acceptable tenant?

Asked whether the prospect of a move to Schedule III had changed NewLake’s underwriting over the past nine months, Coniglio’s answer was direct: “Nothing.” The more consequential question, he said, is what an operator might do after durable reform improves its access to equity.

To clarify, he offered an example: an operator with substantial debt and a maturity approaching within a year might currently be too risky for a long-term lease. If that operator could raise equity, reduce its debt, and refinance the remaining obligation, NewLake might reassess it.

“Now they’ve taken advantage of better access to capital, recapitalized that balance sheet, and now it’s a much more attractive [company] to enter into a transaction with,” Coniglio said.

The lease or capitalization rate reflects the tenant’s risk, NewLake’s own cost of capital, and demand for financing. A lower-risk industry could eventually obtain capital at a lower cost, he said, but NewLake would also need its own capital costs to fall to preserve a return for shareholders.

“This is not a light switch,” Coniglio said, and described tax relief, stronger tenant cash flows, broader access to capital and, potentially, ordinary credit card transactions as a “stacking set of catalysts” that would develop at different speeds.

Cash flow still separates operators

I asked how he distinguishes a durable turnaround from an operator that merely postpones taxes, debt obligations or expansion spending, and he separated the answer into regulatory benefits and operating performance.

Many companies could benefit from a change in tax treatment, he said. Their ability to turn that benefit into a viable business would still depend on execution: selecting dispensary locations, running efficient cultivation facilities and competing for retail sales.

“How are they performing on an operating cash flow basis? How are they growing their business?” he asked. “There are some companies that struggle in a particular state, and other companies that thrive in a particular state.”

That distinction also shapes NewLake’s view of new markets. When asked whether an incumbent, a new licensee or a distressed-asset buyer would become financeable first in 2027, Coniglio put the operator with the strongest balance sheet and operating capabilities at the top.

Kentucky illustrates the difference. It was a new state for NewLake, but its dispensary transaction was with C3 Industries, an existing tenant whose operations the company already knew.

When does a cannabis property become an ordinary industrial property?

Vacant properties present a different calculation. Coniglio contrasted an available Pennsylvania facility, where a medical-only market and the prospect of adult-use legalization may support future cultivation demand.

But a non-cannabis tenant could ultimately provide the better outcome.

“We look at all of these decisions on what we call an NPV basis, or a net present value,” Coniglio said. “Is it better to hold out for some reason and wait for a cannabis tenant because we think there’s a meaningful premium we can get from a cannabis tenant, or is it better to reposition that asset more quickly to an industrial asset?”

The same question applies to a dispensary that might be leased to another cannabis retailer or converted to conventional retail use. NewLake’s August investor presentation identified approximately 240,000 square feet across three properties available for lease following tenant disruptions.

Coniglio explained this requires interdisciplinary work. His team examines power, security, license-transfer rules, local politics, medical-program participation, and the competitive landscape years into the future.

In some states, transferring the licensed entity rather than the license itself can mean a buyer must investigate and potentially assume legacy liabilities. For a long-term lease, the key is whether those local restrictions and the resulting demand will persist.

Why NewLake extended its bank line early

NewLake extended its $90 million credit facility to May 2029 and lowered its borrowing spread from prime plus one percentage point to prime. It had drawn $7.6 million as of June 30. “You take capital when it’s available,” Coniglio said. “Hope isn’t a strategy.” He sees the bank’s willingness to extend the line at a lower rate as a vote of confidence in NewLake’s portfolio and underwriting.

The question investors keep asking

The conversation with investors often begins with NewLake’s share price.

“I don’t get it. Why are you trading the way you’re trading? What am I missing? I looked at your balance sheet and you have net cash. I just don’t get it. You collected 100% rent. What am I missing?”

There are risks to explain, including a tenant in bankruptcy. But the discussion often turns to a restriction prospective investors had not considered.

“When we focus on the custody issue, people aren’t even aware of that. ‘What do you mean custody?’ And you explain that you’re on the OTC because you can’t be on New York or Nasdaq, and as a result there’s no custody available. Then the light starts to go off.”

In Coniglio’s account, investors begin to ask what could happen if NewLake eventually lists on a major exchange and institutions gain access to its shares. He is careful about where that reasoning ends.

“‘That should move the stock, shouldn’t it, Anthony?’ I say, ‘Well, I can’t get into forward-looking statements. I can’t even predict what the market’s going to do, but that’s logical.’”

The dividend gives them another reason to consider the wait.

Coniglio described the question this way: “Wait a minute, then I get paid 11% yield while I’m waiting for that? … I get paid to wait for the catalyst.” The yield was his figure at the time of the interview; it will change with the share price.

Uplisting is only one part of the case he lays out.

He pointed to rescheduling, better access to capital for cannabis operators, potential credit card transactions, new state markets and reduced competition from intoxicating hemp products: all prospective changes NewLake can count on happening together.

“Usually, it’s about how do I grow sales, how do I grow revenue. … We’ve yet to find an industry that actually has the stacking set of catalysts that are so monumental, in my opinion, for the cannabis industry. Like getting uplisted, not just us, everybody getting uplisted to exchanges. Better access to capital for the entire industry. Normalization of cost structure. Credit cards. How many businesses can’t have the convenience of a credit card for their customers?”

Before closing, he returned to what investors can examine today: NewLake’s balance sheet and dividend coverage. Its payout ratio was 88%, he said, leaving room for further vacancies while still covering the dividend.

“When you look at a real estate investment trust, it’s all about paying dividends. What you get worried about is that a REIT will cut their dividend. … We could have additional vacancies and continue to cover the dividend.”

That is the investment case he wants them to understand. Shareholders collect a dividend while they wait for a possible change in market access, but the timing of an uplisting and the value the market might assign to it remain uncertain.

The same questions about capital, operating performance, and regulatory change will be part of the conversation at IgniteIt’s Market Spotlight: California 2026 in Los Angeles on October 7.