NLCP 10-K & 10-Q changes, risk factors and insider trading

We were incorporated in Maryland on April 19,9, 2019. We conduct our business through a traditional umbrella partnership REIT structure, in which properties are owned by an operating partnership, directly or through subsidiaries. We are the sole general partner of our operating partnership and currently own approximately 98% of the OPLimited Units.Partnership Interest (“LPI Units”). We have elected to be taxed as a REIT for U.S. federal income tax purposes beginning with our short taxable year ended December 31, 2019 and intend to operate our business so as to continue to qualify as a REIT.

As of December 31, 2024,2025, we owned a geographically diversified portfolio consisting of 3234 properties across 12 statesstates, with 13 tenants, comprisedconsisting of 1719 dispensaries and 15 cultivation facilities. The 34 properties included 31 properties leased to 11 state-licensed operators and 3 properties which were vacant.

We may take advantage of the other provisions for up to five years or such earlier time that we are no longer an emerging growth company. We will cease to be an emerging growth company upon the earliest to occur of: (i) the last day of the first fiscal year in which our annual gross revenues exceed $1.2 billion (subject to adjustment for inflation), (ii) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter, (iii) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three-year period or (iv) the last day of the fiscal year ending December 31, 2026, following the fifth anniversary of our initial public offering.

•RentTenant collection,performance whichand rent collection. Collections primarily relatesrelate to each of our currenttenants’ and future tenant’s or guarantor’sguarantors’ financial condition and their ability to make rent payments to us on time.

Regulatory UpdateEnvironment - Industry Impacts

InvestmentInvestments in Real Estate

Lease classification for leases under which we are the lessor are evaluated at lease commencement and leases not classified as sales-type leases or direct financing leases are classified as operating leases. Leases qualify as sales-type leases if the contract includes transfer of ownership clauses, certain purchase options, a lease term representing a major part of the economic life of the asset, or the present value of the lease payments and residual guarantees provided by the lessee exceeds substantially all of the fair value of the asset. Additionally, leasing an asset so specialized that it is not deemed to have any value to us at the end of the lease term may also result in classification as a sales-type lease. Leases qualify as direct financing leases when the present value of the lease payments and residual value guarantees provided by the lessee and unrelated third parties exceeds substantially all of the fair value of the asset and collection of the payments is probable. The determination of lease classification requires the calculation of the rate implicit in the lease or the use of an appropriate capitalization rate which requires significant judgement.judgment.

Operating leases where the minimum lease payments are not reasonably predictable are recognized on a cash basis. The collectability criteria for our operating leases is assessed quarterly on an individual basis, incorporating several financial metrics, which include but are not limited to, free cash flow, profitability, debt profile and federal tax liability. In our assessment, we also consider the impact of federal regulatory uncertainty and state regulatory challenges in the cannabis industry, including the fact that cannabis remains illegal under federal law. These environmental factors are significant in our assessment of collectability of lease payments given the pervasive impacts on our tenants' financial performance and ability to continue as a going concern. Based on this assessment, we determined collectibilitycollectability of rent for each of our tenants is uncertain and rental income was recorded on a cash basis. We will continue to assess quarterly the collectability of lease payments for each tenant as required by ASC 842.

We adopted ASC 326, Financial Instruments - Credit Losses ("CECL") on January 1, 2023. The CECL expected loss model requires an allowance for all expected credit losses for the life of a loan be recognized when the loan is either originated or acquired. The allowance for credit losses is a valuation account that is deducted from, or added to, the amortized cost basis of the financial asset(s) to present the net amount expected to be collected on the financial asset(s). At each reporting period, we will update the estimate and adjust the allowance for credit losses accordingly. Increases in the allowance are recorded through net income as credit loss expense. Decreases in the allowance are recorded through net income as a reversal of credit loss expense. This standard does not specify a specific measurement technique for estimating expected credit losses and the approach used to estimate credit losses requires judgement.judgment. We generally use a discounted cash flow model approach to determine the credit loss. Determining the appropriate discount rate that reflects the risk inherent in future cash flow requires significant judgement.judgment. If the discount rates differ significantly from our estimates, the provision for current credit loss could be materially affected.

InDuring Maythe 2024,year ended December 31, 2025, we purchasedacquired athree cultivation facility in Connecticutdispensaries for approximately $4.0$1.7 million and committed to fund approximately $12.0$1.1 million in improvements.improvements (refer to the 2025 Improvement Allowances table below for details).

During the year ended December 31, 2024,2025, we funded approximately $15.1$0.7 million of improvements totowards our cultivationcommitted facilitiesimprovement allowance at a dispensary in Arizona, Connecticut, Missouri and Pennsylvania.Ohio.

NewLake Capital Partners, Inc. ("the "Company," "we," "our," "us,") makes statements in this Quarterly Report on Form 10-Q (“Form 10-Q”) that are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In particular, statements pertaining to our capital resources, property performance, leasing rental rates, future dividends and results of operations contain forward-looking statements. Likewise, all of our statements regarding anticipated growth in our funds from operations, adjusted funds from operations, anticipated market conditions, demographics, and results of operations are forward-looking statements. You can identify forward-looking statements by the use of forward-looking terminology such as “believe,” “continue,” "remain," “could,” “expect,” “may,” “will,” “should,” “would,” “seek,” “approximately,” “intend,” “plan,” “pro forma,” “estimates,” “forecast,” “project,” or “anticipate” or the negative of these words and phrases or similar words or phrases which are predictions of or indicate future events or trends and which do not relate solely to historical matters. You can also identify forward-looking statements by discussions of strategy, plans or intentions.

•actions and initiatives of the U.S. or state governments and changes to government policies and the execution and impact of these actions, initiatives and policies, including changes to the factfederal thatand state regulation of cannabis remainsand illegalthe continuing uncertainty regarding the treatment of cannabis under federal law;

•reduced liquidity of our common stock resulting from the limited availability of clearing firmsfirms, thatbroker-dealers, willinvestment settlebanks and other financial institutions willing to support trading in our securities andor settle our securitiesparticipate in secondary offerings involving our securities;

•the lack of tenant security deposits will impact our ability to recover rents should our tenants default under their respective lease agreementagreements;

NewLake Capital Partners, Inc., ("the “"Company,”" "we," "our," "us,") is an internally managed REIT and a leading provider of real estate capital to state-licensed cannabis operators primarily through sale-leaseback transactions, third-party purchases and funding for build-to-suit projects. Our properties are leased to single tenants on a long-term, triple-net basis, which obligates the tenant for the ongoing expenses of the leased property, in addition to its rent obligations.

As of MarchJune 31,30, 2026, we owned 34 properties across 12 states, consisting of 19 dispensaries and 15 cultivation facilities which included 31 properties leased to state-licensed operators and 3 properties which were vacant.available for lease.

Tenant performance and rent collection.collection: Collections primarily relate to tenants' and guarantors' financial condition and ability to make rent payments on time.

Industry and regulatory conditions.conditions: Our tenants operate in the cannabis industry. Changes in federal, state or local laws, or in their interpretation or enforcement, may adversely affect our tenants' ability to fulfill lease obligations, which could adversely affect our ability to maintain or increase rental rates.

Tenant operating history.history: Certain tenants have limited operating histories and may be more susceptible to payment or other lease defaults. Accordingly, our operating results may be influenced by the financial performance and creditworthiness of our tenants.

Ability to re‑lease vacantavailable properties and manage tenant issues.issues: Our operating results may also be affected by our ability to re‑lease vacantavailable properties in a timely manner and to manage and resolve tenant‑related issues, including rent defaults, lease restructurings or other credit challenges.

For the three and six months ended MarchJune 31,30, 2026, all rental income was derived from triple-net leases. Under these leases, tenants are generally responsible for real estate taxes, insurance, maintenance and utilities, and most leases include a parent, affiliate or other guaranty. DuringAs theof threeJune months ended March 31,30, 2026, we had rental31 agreementsleased withproperties across 12 tenants and three properties remainedavailable vacant,for lease, which we are actively working to re-lease.

On March 24, 2026, The Cannabist Company ("Cannabist"), which operates at four of our properties, including two properties located in Illinois and two properties located in Massachusetts, publicly announced that it hashad entered into definitive agreements to sell certain assets and has commenced restructuring proceedings under the Cannabist's Creditors Arrangement Act in Canada, with the intention to seek recognition of such proceedings in the United States under Chapter 15 of the U.S. Bankruptcy Code. As disclosed by The Cannabist, they entered into a non-binding memorandum of understanding for the sale of certain of its production, manufacturing, distribution and sale operations (through the sale of equity or assets) in six states, including Illinois and Massachusetts, where we lease properties to TheCannabist, Cannabist.and commenced restructuring proceedings under the Companies Creditors Arrangement Act ("CCAA") in Canada. On May 9, 2026, the U.S. Bankruptcy Court for the District of Delaware granted recognition of the Canadian restructuring proceedings under Chapter 15 of the U.S. Bankruptcy Code. We continue to monitor developments related to this tenant and its restructuring proceedings.

During the threesix months ended MarchJune 31,30, 2026, we collected full rent for each of the 4four properties leased to Cannabist and the tenant remains current on its contractual lease obligations to us. We hold aggregate security deposits totaling approximately $481.6 thousand across these 4four properties.

On January 28, 2026, we entered into a First Amendment to the Lease Agreement (the “Amendment”) for our dispensary property located in San Diego, California. Pursuant to the Amendment, we consented to a change in control of the tenant, pursuant to which Wellgreens acquired the tenant entity formerly operated by the Cannabist. In connection with the Amendment, the lease term was extended by five years, through December 31, 2034, and thewith three renewal options and annual contractual rent escalators. In addition, the existing purchase option under the lease remained with the tenant. All other material terms of the lease remain unchanged.

As of MarchJune 31,30, 2026, three of our cultivation facilities, located in Pottsville, PA,Pennsylvania; Sparks, NV,Nevada; and Fitchburg, MA,Massachusetts, remainedwere vacantavailable for lease following tenant departures in 2025. DuringWe the three months ended March 31, 2026, we continuedcontinue to actively market these properties for lease. There was no rental income recognized for these properties during the three months ended March 31, 2026.

U.S. monetary policy remains restrictive relative to historical norms, and interest rates continue to be elevated compared to prior years, providing only limited relief to borrowers.years. Capital availability remains constrained,selective, particularly for emerging and specialized sectors such as cannabis. ManyWhile certain operators acrosshave thesuccessfully industryrefinanced or extended debt maturities, many continue to experience margin pressure, elevated leverage,leverage and limited access to traditional financing sourcessources. as significant amounts ofSignificant debt maturematurities duringremain outstanding across the industry through 2026 and 2027, creatingleading heightenedto ongoing refinancing risk. Industry‑wideIndustry-wide credit stress has ledcontributed to several notable restructurings and insolvency proceedings across the sector, including at the parent‑companyparent-company level of certain private and public multi‑statemulti-state operators.

Broader macroeconomic uncertainty persists, including sensitivityinflationary topressures, inflation trends, mixed signalsuncertainty regarding economicfuture growth,interest rate policy and cautious investor sentiment. These conditions have contributed to a more conservativedisciplined approach to capital deployment across equity and credit markets, with increased emphasis on liquidity, balance‑sheetbalance-sheet strength,strength and risk management.

As a REIT focused on leasing properties to cannabis tenants, we continue to closely monitor these evolving market dynamics. Disciplined underwriting, proactive tenant engagement,engagement and active portfolio management remain central to our strategy as we operate in an environment characterized by elevated borrowing costs, selective capital availability,availability and sector‑specificsector-specific regulatory and credit risks. We believe the ongoing financial pressures withinaffecting portions of the cannabis industry, including refinancing challenges associated with upcoming debt maturities, underscore the importance of prudent tenant evaluation and thoughtful portfolio construction.

As of June 30, 2026, the federal regulatory environment for cannabis continued to evolve. In April  2026, the U.S. Department of Justice (“"DOJ”") issued an order rescheduling medical cannabis sold under aqualifying state-legalstate-licensed medical Marijuanamarijuana programprograms from aSchedule Schedule I to Schedule  III of the Controlled Substances Act (“"CSA”"). The order reflectspermits qualifying state-licensed medical marijuana operators that obtain and maintain the required DEA registrations to operate under a federal recognitionSchedule ofIII acceptable medical use and lower abuse potential for these products. While this action does not constitute federal legalization of cannabis and does not apply to recreational marijuana, it reduces regulatory restrictionsframework and eliminates the application of Internal Revenue Code Section  280E for qualifying state‑licensedstate-licensed medical marijuana businesses. InAs addition,a theresult, Drugqualifying Enforcementoperators Administrationmay (“DEA”)benefit initiatedfrom anreduced expeditedfederal administrativetax processburdens, improved operating cash flows and enhanced access to consider broader rescheduling of cannabis, with an administrative hearing scheduled to begin on June 29, 2026.capital.

We believe these regulatory developments represent a meaningfulsignificant milestone for the regulated cannabis industry and may improve operating cash flows, credit profiles,profiles and access to capital for certain operators over time. Reduced tax burdens associated withHowever, the eliminationultimate impact of Section 280Ethese coulddevelopments enhancewill liquiditydepend on the outcome of pending legal challenges, ongoing administrative proceedings, future federal regulatory actions, and potentiallythe expand participation by lendersimplementation and investorsinterpretation thatof haveapplicable historicallyfederal limitedand exposurestate requirements. We continue to monitor these developments and their potential impact on our tenants and the broader cannabis sector.industry.

The Consumer Price Index ("CPI") rose by approximately 3.3%3.5% for the twelve months ended MarchJune 31,30, 2026. While inflation remains well below the peaks experienced during 2022, recent data indicates renewed upward pressure, particularly related to energy costs. It remains above the Federal Reserve’s long-term 2% target, contributing to higher costs across labor, materials, and services.

We believe that all of the decisions and assessments upon which our consolidated financial statements have been based were reasonable at the time made and based upon information available to us at that time. There have been no changes to our critical accounting estimates included in "Management’s Discussion and Analysis of Financial Condition and Results of Operations" section of our Annual Report on Form 10-K for the year ended December 31, 2025.

FirstSecond Quarter 2026 Highlights

On MarchJune 4,12, 2026, our Board of Directors declared a firstsecond quarter 2026 cash dividend of $0.43 per share of common stock, equivalent to an annualized dividend of $1.72 per share of common stock. The dividend was paid on AprilJuly 15, 2026, to stockholders of record at the close of business on MarchJune 31,30, 2026.

During the three months ended MarchJune 31,30, 2026, we derived substantially all of our revenue from rental income generated by 31 leased properties, each of which is leased to a single tenant under a triple‑net lease. We continue to actively work to re‑tenantmarket our three vacantavailable cultivation facilities located in Pottsville, Pennsylvania; Sparks, Nevada; and Fitchburg, Massachusetts.Massachusetts, for lease and are actively seeking replacement tenants. As of MarchJune 31,30, 2026, our portfolio remainsremained conservatively leveraged, with only $7.6 million outstanding under our Revolving Credit Facility. Additionally,Our we maintained lowannualized general and administrative expenses with an annualizedexpense ratio ofwas 1.5% of total assets.

Comparison of the three months ended MarchJune 31,30, 2026 and 2025 (in thousands):

Rental income for the three months ended MarchJune 31,30, 2026 decreased by approximately $0.8 million, to approximately $11.8 million, compared to approximately $12.6 million for the three months ended MarchJune 31,30, 2025. The decrease in rental income was primarily attributable to:

•Approximately $0.4 million related to our Fitchburg, Massachusetts property,cultivation facility, which was vacantavailable for lease during the three months ended MarchJune 31,30, 2026. RevolutionaryThe Clinicsproperty vacatedbecame available following the propertydeparture of the prior tenant in July 2025, and we are actively marketing the property for lease.2025.

•Approximately $0.7 million related to two cultivation facilities located in Sparks, Nevada and Pottsville, Pennsylvania, which were vacantavailable for lease during the three months ended MarchJune 31,30, 2026. AYR Wellness, Inc. vacated theseThe properties became available following the departure of the prior tenant in August 2025 and are actively marketing both facilities for lease.2025.

The decreases in rental income described above were partially offset by increases in rental income primarily attributable to:

•Annual rent escalations onacross our portfolio, which generatedincreased anrental increaseincome ofby approximately $0.3 million of rental income during the three months ended MarchJune 31,30, 2026.

Fees and reimbursables decreased slightly due to timing of revenue reimbursements during the three months ended MarchJune 31,30, 2026, compared to the three months ended MarchJune 31,30, 2025.

Property carrying costs represent expenses incurred to maintain vacant or partially vacant properties inthat aare condition suitableavailable for re-leasing.lease. These costs generally include real estate taxes, utilities, property management fees, security, and other expenses necessary to keep the properties functional and marketable. We didincurred not incur anyminimal property carrying costs during the three months ended MarchJune 31,30, 2025, as allonly propertiesone wereproperty fullyincurred leasedsuch during that period.costs. During the three months ended MarchJune 31,30, 2026, we incurred approximately $0.2$0.1 million of property carrying costs related to three vacant cultivation facilities located in Fitchburg, MA,Massachusetts; Pottsville, PAPennsylvania; and Sparks, NV.Nevada that were available for lease during the period.

Total general and administrative expenses for the three months ended MarchJune 31,30, 2026 decreasedincreased by approximately $0.3$0.5 million to approximately $1.9 million, compared to $2.2$1.4 million for the three months ended MarchJune 31,30, 2025. The decreaseincrease in total general and administrative expense is described below by category.