$IIPR, the conservative cannabis play

Innovative Industrial properties is a R.E.I.T that operates via a sale-leaseback strategy of which they buy the property of the cannabis grower then lease it back to them. This helps The cannabis company achieve much-needed capital that they can't receive from banks (yet) to fund their operations. I will keep this short but that is the basic gist of the company. What's going for it: All IIPR 82 properties are NNN, triple net lease properties. This means that tenants pay for bills and upgrades for the property and of which the changes must remain there even if they choose to exit their lease agreement. This equates to an ever-evolving cannabis cultivation facility that is always getting better and becoming more efficient for future tenants at no cost to IIPR. Even though IIPR will not benefit from federal Legalisation, this is a great stock to hold until then. ​ Right now : 100% of properties are leased out. The average tenure of these leases spans 16 years. This company trades at a premium but for good reason, they are the only cannabis reit on the Nasdaq, letting them charge higher rent payments to companies because there is no competition. Tenants include notable names such as Canopy growth, Trulieve, Cresco Labs and Green Thumb Industries. FFO growth of 200% each year over the last 3 Years. No debt This stock has great growth potential with a 2.50% dividend yield that is growing each distribution. ​ The Play: Hold the stock and wait to see what the Safe Banking reform will include, assess from there. If Safe banking eventually passes cap rates will be lowered due to more competition on each property in the future. The more cannabis news that is going to come out the higher it will go. 

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Trudog1862

Oct 22, 2021

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$IIPR, the conservative cannabis play

bullish

Innovative Industrial properties is a R.E.I.T that operates via a sale-leaseback strategy of which they buy the property of the cannabis grower then lease it back to them. This helps The cannabis company achieve much-needed capital that they can't receive from banks (yet) to fund their operations. I will keep this short but that is the basic gist of the company.

What's going for it:

All IIPR 82 properties are NNN, triple net lease properties. This means that tenants pay for bills and upgrades for the property and of which the changes must remain there even if they choose to exit their lease agreement. This equates to an ever-evolving cannabis cultivation facility that is always getting better and becoming more efficient for future tenants at no cost to IIPR. Even though IIPR will not benefit from federal Legalisation, this is a great stock to hold until then.

Right now :

  • 100% of properties are leased out.
  • The average tenure of these leases spans 16 years.
  • This company trades at a premium but for good reason, they are the only cannabis reit on the Nasdaq, letting them charge higher rent payments to companies because there is no competition.
  • Tenants include notable names such as Canopy growth, Trulieve, Cresco Labs and Green Thumb Industries.
  • FFO growth of 200% each year over the last 3 Years.
  • No debt

This stock has great growth potential with a 2.50% dividend yield that is growing each distribution.

The Play:

Hold the stock and wait to see what the Safe Banking reform will include, assess from there. If Safe banking eventually passes cap rates will be lowered due to more competition on each property in the future.

The more cannabis news that is going to come out the higher it will go. 

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read-time
1 min

290.00

Target Price

9/ 10

Confidence

2-6 Months

Timeframe
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Earnings Release
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SEC Filing
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