Best Cannabis Stocks For Long-Term Investing In 2023
Are you looking for the top marijuana stocks for 2023? The federal cannabis law’s slow implementation has hurt the American cannabis business, which generates billions of dollars annually. In general, investors might be able to profit from the present market trend by using the sector’s downturn. Over the next five years, the cannabis market is anticipated to more than double in size, allowing marijuana REITs to expand continuously in value.
Long-term cannabis investors get dividend payments from cannabis REITs. Also, one of the things luring long-term investors to these cannabis stocks is the relative rarity of dividends in the cannabis sector. Cannabis REITs have provided the strongest dividend increase over the preceding five years, averaging over 20% annually. Cannabis REITs do, however, payout at a higher rate than is typical for the REIT sector, at roughly 70% of their available FFO. If you want to invest long-term in the cannabis sector, let’s look at 3 of the best cannabis stocks for your portfolio right now.
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Top Cannabis REITs For Cannabis Investors In March
- Innovative Industrial Properties, Inc. (NYSE: IIPR)
- AFC Gamma, Inc. (NASDAQ: AFCG)
- NewLake Capital Partners, Inc. (OTC: NLCP)
Innovative Industrial Properties, Inc.
Innovative Industrial Properties, Inc. is an American cannabis-focused real estate investment firm. The firm presently has 8.7 million square feet of rentable space available, and 2.5 million square feet more will do so soon. With an average lease duration of 16.4 years, the majority of these structures are entirely leased. The company currently has 111 properties dispersed throughout 19 states. IIP has already spent $2.4 billion on property improvements as of April, in addition to the extra $227.1 million in projected rent payments. IIP estimates its lease portfolio will grow significantly in 2022 due to its ongoing real estate investments, particularly in Pennsylvania and Massachusetts.
The company surpassed expectations by reporting its fourth quarter and full-year 2022 results on February 27. With regard to Q4 2022, IIP produced total revenues of around $70.5 million, up from about $58.9 million for the same period in 2021 and a 20% rise. IIP produced total revenues of around $276.4 million for 2022 as opposed to about $204.6 million in 2021, a 35% increase.
Also, for the entire year 2022, IIP reported FFO (diluted) and FFO (diluted) per diluted share of approximately $211.3 million and $7.64, respectively, as well as net income attributable to common stockholders (diluted) of approximately $153.0 million and net income attributable to common stockholders (diluted) per diluted share of approximately $5.52. IIP distributed a quarterly dividend of $1.80 per common share, or an annualized dividend of $7.20 per share, on January 13, 2023, to stockholders of record as of December 30, 2022. IIP had an AFFO payout ratio of 85% in Q4 2022.
IIPR Stock Performance
On March 3rd, IIPR stock closed at $87.34, down 6.22% in the last month of trading. The stock is trading in a 52-week price range of $81-$211.17, down 13.82% year to date. IIPR stock has a 12-month median price target of $125 per share, according to Tip Ranks analysts. In this forecast, this would be a 43.09% increase over the previous trade price of $87.34.
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AFC Gamma, Inc.
AFC Gamma, Inc. is a well-known cannabis ancillary company with a healthy cash flow and capable management. In 2020, the business was established with a focus on supply and demand theories, markets for those theories, real estate security, and other types of collateral. Among AFCG’s specialties are first-lien loans, mortgage loans, construction loans, bridge financings, and other unconventional financings. In addition, the recent marketing attempts of AFC Gamma have been centered on the quickly growing cannabis market. Also, the company granted Verano Holdings Corp. a $100 million option and a $250 million credit line.
The third quarter of 2021 to the third quarter of 2022 saw a 45% increase in AFC Gamma’s net income, reaching $11.5 million, or $0.57 per basic weighted average share of common stock. Likewise, the company’s distributable earnings1 grew from the third quarter of 2021 to the third quarter of 2022 by 64%, from $6.7 million to $11.8 million, or $0.59 per basic weighted average share of common stock. AFC Gamma also paid out a dividend for the third quarter of 2022 on October 14, 2022, at a rate of $0.56 per common share, a 30% increase from the third quarter of 2021.
By November 1, 2022, the company had closed $203.8 million in new commitments, funded $167.6 million in commitments, both new and old, and refinanced $32.0 million in debt from existing creditors. On October 14, 2022, AFCG distributed a normal quarterly cash dividend of $0.56 per share of ordinary stock to stockholders of record on September 30, 2022. The company will release its fourth quarter and full year 2022 results on March 7th before the opening.
AFCG Stock Performance
On March 3rd, AFCG shares closed at $15.51, a 3.24 percent decline from the previous trading month. The stock, which has a price range of $14.90 to $20.74, is down 1.40% year to date. In this case, analysts at CNN Business predict that the 12-month average price for AFCG shares will be $22. In comparison to the stock’s most recent trading price of $15.51, this prediction shows a gain of 41.94 percent.
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NewLake Capital Partners, Inc.
NewLake Capital Partners is a well-known real estate lender for state-licensed cannabis firms. Via sale-leasebacks, third-party purchases, and build-to-suit initiatives, this triple-net lease REIT invests in commercial real estate, including industrial and retail buildings. In general, its tenants include some of the most well-known companies in the nation’s state-licensed cannabis industry, making it a trustworthy real estate partner. According to the business, sales for the first three months of 2022 were $10.2 million, up 130 percent from the same period in 2021. Common stockholders also received a $5 million net profit distribution in the first quarter of 2022.
Revenue increased to $12.1 million in the third quarter of 2022, up 50% from the previous year’s period. The third quarter of 2022 saw a $6.5 million net profit for regular stockholders and participating securities. Overall, FFO and AFFO totaled $10.3 million. Curaleaf Holdings, Inc. (OTC: CURLF), Cresco Labs Inc. (CRLBF), Trulieve Cannabis Corp. (OTC: TCNNF), and Columbia Care Inc. are a few tenants of NewLake Capital. The company will invest $50 million in three of its current facilities in July.
In addition, The company announced a fourth-quarter dividend in December that will be paid out in the fourth quarter of 2022 at $1.56 per common share annually. This represents a 5.4% increase from quarter to quarter and a 25.8% increase from year to year. This is the company’s sixth consecutive quarterly dividend increase. On March 9, before the opening, the corporation will report its fourth quarter and full-year 2022 results.
NLCP Stock Performance
NLCP stock closed at $16.75 on March 3rd, down 8.32% in the past month of trading. In this case, the stock has a price range of $12.70-$26.00 and is up 4.36% year to date.
Top Cannabis REITs For March 2023
For new investors searching for long-term investments to enter the cannabis business, cannabis REITs can be a solid option. You should always conduct your research before investing in a firm. Additionally, reviewing their financial statements and press releases could only be necessary to determine which companies represent the best investments. These marijuana stocks might be the ones to watch if you want to make long-term investments in 2023.
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