GOODNESS GROWTH HOLDINGS, INC. : entering into a material definitive agreement, creating a direct financial obligation or obligation under a registrant’s off-balance sheet arrangement, disclosure of FD regulations, financial statements and supporting documents (Form 8-K )

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Item 1.01 Conclusion of a Material Definitive Agreement

At September 1, 2021, a wholly owned subsidiary of Goodness Growth Holdings, Inc. (the “Company”) entered into a purchase and sale agreement with IIP-NY 2 LLC (“IIP”) under which the parties agreed that the Company would exercise its previously announced option to purchase 92.3 acres ( the “Property”) adjacent to its existing cannabis cultivation facility at Johnstown, New York and simultaneously enter into a sale-leaseback transaction of the Property (the “Sale-Leaseback”) with IIP. At September 24, 2021 (the “Closing Date”), the parties have completed the sale-leaseback. The purchase price of the property was approximately $ 1.2 million, excluding transaction fees. As part of the sale-leaseback, on the closing date, the Company and IIP entered into an amendment to their existing rental agreement (the “Lease Amendment”) for the
Johnstown culture property to add the property. Under the lease amendment, IIP agreed to reimburse the Company for leasehold improvements of approximately $ 55 million for the construction of a new 324,000 square foot cannabis cultivation, processing and research and development facility on the property, approximately $ 9 million of which was reimbursed on the Closing Date.

The initial annualized base rent for the Property is 10.5% of the rental improvement budget plus the purchase price, for a twenty-year term. The lease amendment contains a rent escalation clause that is triggered in 18 months if the Company does not meet certain strategic criteria as specified in the lease amendment, which would increase the annualized base rent by $ 1. 5% of the rental improvement budget plus the purchase price. The base rent will be phased in over a 16-month period and will be subject to annual increases of 2.75%.

Article 2.03. Creation of a direct financial obligation or obligation under an off-balance sheet arrangement of a registrant

The information set out in Section 1.01 is incorporated herein by reference in this Section 2.03.

Article 7.01. FD Regulation Disclosure

At September 28, 2021, the Company has issued a press release announcing the completion of the Sale-Leaseback, a copy of which is attached hereto as Exhibit 99.1 and incorporated by reference herein.

Article 9.01. Financial statements and supporting documents

(d) Exhibitions.

Part # Description

99.1 Company press release, dated September 28, 2021
104 Interactive cover page data file (integrated into the online XBRL

            document)

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