Innovative Industrial Properties Inc (IIPR) saw its stock price plummet 5.30% during intraday trading on Wednesday, as investors reacted negatively to the company's recent financing move.

The cannabis-focused real estate investment trust announced it has closed a $56.5 million secured term loan, with the three-year facility priced at one-month SOFR plus 500 basis points and featuring an interest-only structure. The loan is secured by certain company properties, and proceeds are earmarked to repay unsecured notes maturing at the end of the month.

Market participants appear to be concerned about the terms of the financing, which carries a relatively high interest rate and requires the company to pledge its properties as collateral. This move to secure debt to repay maturing unsecured obligations may have raised questions among investors about the company's financial position and liquidity needs.