Best Cannabis Stocks For Long Term Investments In 2021
Are you looking for ways to invest in top marijuana stocks while the market is down? There is currently one part of the cannabis sector that has not experienced as much of a downtrend as the rest in 2021. In the US cannabis REITs have continued to see some upside in the market as the declines continued in other areas. In October vertically integrated pot stocks are trading near their lowest values so far in 2021. This is due to the inaction in the Senate on cannabis legalization.
But marijuana REITs are not affected by the legalization because they are ancillary companies that are federally legal. In 2021 cannabis REITs are well-positioned to grow alongside the cannabis industry. With few players in the game, the leading companies have established solid long-term portfolios with some of the top US MSOs and private companies. Because of these companies long-term leases, they could produce consistent long-term revenue and grow alongside the industry.
For investors, some of these cannabis stocks also provide a dividend for long-term investors. For example, Innovative Industrial Properties, Inc. (NYSE:IIPR) has been the best performing cannabis REIT and offers an annual dividend of $6 per share. IIPR stock has continued performing well for investors even when the rest of the cannabis sector declined in the market.
Researching Cannabis Companies And The Stock Market In 2021
Before investing in any stock, it’s important for investors to do their due diligence on the company. Researching earnings reports and watching how the stock performs in the market are key elements in establishing good positions. Once you have narrowed your list to the top-performing companies some investors make a watchlist of these to pot stocks to see how they move in the market. Establishing a good entry position is important with current market volatility and recent declines.
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As the cannabis sector continues to find a bottom marijuana real estate continues to grow rapidly across the US. For the next five years, the US cannabis market is forecast to double in size ancillary cannabis stocks could be a good way to take advantage of this long-term growth. Cannabis REITs are well-positioned to continue establishing processing and cultivation facilities for leading well-established licensed companies. Let’s look at 2 top marijuana stocks to add to your list in October.
Cannabis Stocks To Watch In Q4 2021
- Power REIT (NYSE:PW)
- AFC Gamma, Inc. (NASDAQ:AFCG)
Power REIT
First on the list is Power REIT a specialized real-estate investment trust focused on sustainable real estate with attractive risk-adjusted returns. At the present time, Power REIT owns a growing portfolio of Controlled Environment Agriculture or CEA properties in the form of greenhouse and associated processing space. Primarily, the properties are leased to tenants that are licensed to produce medical cannabis at the facilities. The properties are targeting expansion and Power REIT has the option to fund the capital costs of property upgrades. Power REIT’s greenhouse properties are an environmentally friendly cultivation solution.
This year, Power REIT expanded its Colorado footprint by acquiring a 10-acre property that includes the construction of a 12,000 square foot greenhouse space. In detail, this gives the company investment properties across Southern Colorado with over 83 acres and 383,328 square feet of CEA facilities. In September the company acquired a 556,146 square foot cannabis greenhouse cultivation and processing facility for $18.4 million. This facility will be the largest cannabis cultivation facility in Michigan and one of the largest in the US. In Power REITs latest results net income per share increase 148% and Core FFO per common share increased 102%. For Q2 the company paid a dividend of $0.4834 per share each quarter which would be a total of $1.9375.
PW Stock Performance
PW stock is trading at $52.16 on October 13th up 4.09% going into the close. Currently, the stock has a 52-week price range of $18.46-$52.50 and is up 12.61% in the last month. According to analysts at CNN Business PW stock has a 12-month median price target of $63.oo per share. In this case, this would represent an upside of 23.43% from its current trading level.
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AFC Gamma, Inc.
Another company AFC Gamma, Inc. is an institutional lender to leading cannabis companies with strong operations and cash-flow prospects. Established in 2020, the company specializes in real estate security and other collateral, and locations in states with favorable supply/demand fundamentals and legislative environments. To highlight, AFCG provides innovative and customized financing solutions through first-lien loans, mortgage loans, construction loans, and bridge financings. In general, AFC Gamma’s principles are now focusing on the exponential growth of the cannabis industry. Recently, AFC Gamma announced it provided Beleaf Medical, LLC a secured credit facility of $23 million to fund its Missouri expansion.
AFC Gamma reported its Q2 2021 financials showing net income of $4.6 million or earnings of $0.34 per basic weighted average share of common stock. Additionally, the company saw distributable earnings of $5.8 million or $0.43 per basic average share of common stock. To highlight, in Q2 the company closed $71.3 million of new commitments and funded $77.8 million of new and existing commitments. AFC has paid its dividend for Q2 2021 of $0.38 per common share. As of August 1st, the company has a portfolio consisting of loan commitments worth $195.3 with $175.3 million of outstanding principal across 14 portfolio companies. In September the company raised its quarterly dividend by 13.2% to $0.43 per share. On October 4th the company posted a record $119.2 million in total new commitments during the third quarter of 2021.
AFCG Stock Performance
AFCG stock is trading at $22.90 on October 13th up 4.04% in the past five trading days. The stock has a 52-week price range of $19.75-$25.05 and is up 9.26% in the last month. According to analysts at Tip Ranks AFCG stock has a 12-month average price target of $26.67 per share. This would represent an upside of 16.46% from its current trading levels.
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