Cannabis Real Estate: September 2023’s REITs to Keep an Eye On
Are you looking for the best marijuana stocks to invest in for the long term? Overall, the cannabis sector has emerged as a significant force in recent years, increasing possibilities and financial opportunities. In general, Cannabis Real Estate Investment Trusts, or Cannabis REITs, are an innovative financial vehicle that has captured the attention of investors and intrigued the interest of Wall Street and Main Street alike.
At the present time, The best Cannabis REITs offer a one-of-a-kind business model that focuses on owning and leasing property to licensed cannabis farmers. Cannabis REIT investors anticipate benefiting from these operators’ steady rental revenue and the underlying assets’ future worth. Furthermore, this investing method provides additional diversification because REITs typically maintain a portfolio of properties spread across multiple nations. Cannabis REITs have established themselves as a reliable choice for investors wishing to capitalize on the promise of the cannabis business while limiting the risks associated with legal ambiguity and operational concerns.
Additionally, understanding the dividend stock potential of Cannabis REITs is becoming increasingly important as investors look for methods to diversify their portfolios and participate in the cannabis sector’s growth. By offering an in-depth review of the emerging cannabis market environment and the role of Cannabis REITs within it, this article aims to provide readers with the knowledge they need to make informed investment decisions and capitalize on opportunities in this exciting area of the financial world.
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Cannabis REITs to Watch in September 2023
- Innovative Industrial Properties, Inc. (NYSE: IIPR)
- NewLake Capital Partners, Inc. (OTC: NLCP)
- AFC Gamma, Inc. (NASDAQ: AFCG)
Innovative Industrial Properties, Inc.
Innovative Industrial Properties, Inc. is a cannabis-focused real estate investment corporation based in the United States. The company currently has 8.9 million square feet of rentable property, with an additional 2.5 million square feet coming soon. In addition, the majority of these properties are fully leased, with an average lease length of 16.4 years. Currently, the corporation has 108 locations distributed over 19 states. In April, IIP had already spent $2.4 billion on property upgrades, on top of the $227.1 million in anticipated rent payments. As a result of continuous real estate investments in Pennsylvania and Massachusetts, the company anticipates its portfolio to rise significantly in 2022.
Second Quarter 2023 Financial Highlights
- Generated total revenues of approximately $76.5 million in the quarter, representing an 8% increase from the prior year’s quarter.
- Recorded net income attributable to common stockholders of approximately $40.9 million for the quarter, or $1.44 per diluted share.
- Recorded adjusted fund from operations (AFFO) of approximately $64.0 million, or $2.26 per diluted share, increases of 6% and 5% from the prior year’s quarter, respectively.
- Paid a quarterly dividend of $1.80 per common share on July 14, 2023 to stockholders of record as of June 30, 2023. The common stock dividends declared for the twelve months ended June 30, 2023 of $7.20 per common share represent an increase of $0.70, or 11%, over dividends declared for the twelve months ended June 30, 2022.
IIPR Stock Performance
On August 29th, IIPR stock closed at $78.63, up 2.40% in the last month of trading. The stock is trading in a 52-week price range of $63.36-$125.38, down 22.42% year to date. In this case, IIPR stock has a 12-month median price target of $95 per share, according to CNN Business analysts. In this forecast, this would be a 20.77% increase over the last trade price of $78.63.
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NewLake Capital Partners, Inc.
NewLake Capital Partners is a well-known lender for cannabis-related businesses with a state license. In general, this triple-net lease REIT invests in commercial real estate, including industrial and retail facilities, through sale-leasebacks, third-party purchases, and build-to-suit activities. Some of the most well-known enterprises in the nation’s state-licensed cannabis market are among its tenants, making it a reliable real estate partner. According to the organization, revenues were $10.2 million in the first three months of 2022, up 130 percent over the same period in 2021. Furthermore, in the first quarter of 2022, common investors got a $5 million net profit payout.
Second Quarter 2023 Financial Highlights
- Comparison to the first quarter ended March 31, 2023:
- Quarter-over-quarter revenue, net income, Funds from Operations (“FFO”), and Adjusted Funds from Operations (“AFFO”) were flat. As a result, presented below are only the second quarter financial highlights.
- Revenue totaled $11.4 million.
- Net income attributable to common stockholders totaled $5.8 million.
- FFO(1) totaled $9.5 million.
- AFFO-diluted(1) totaled $9.9 million.
Cash and cash equivalents as of June 30, 2023, were $40.7 million, with $22.8 million committed to fund Tenant Improvements (“TIs”).
Dividend
On June 15, 2023, the Company declared a second quarter 2023 cash dividend of $0.39 per share of common stock, equivalent to an annualized dividend of $1.56 per share of common stock. The dividend was paid on July 14, 2023 to stockholders of record at the close of business on June 30, 2023.
Outlook for 2023
NewLake Capital is providing AFFO guidance for full year 2023 of $39.8 to $40.8 million, an increase of 4.1% over AFFO for the same period the prior year, assuming the midpoint of that range.
NLCP Stock Performance
NLCP stock closed at $12.98 on August 29th, up 41.41% in the past month of trading. Additionally, the stock has a price range of $11.80-$19.50 and is down 18.98% year to date.
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AFC Gamma, Inc.
AFC Gamma, Inc. is a well-known cannabis ancillary company that properly controls its cash flow and capacity. The company, founded in 2020, focuses on supply and demand theories, markets for those theories, real estate security, and other forms of collateral. Overall, First-lien loans, mortgage loans, construction loans, bridge financings, and other unorthodox methods of financing are among AFCG’s specialties. AFC Gamma’s most recent marketing initiatives have concentrated on the rapidly expanding cannabis market. In addition, the corporation granted Verano Holdings Inc. a $100 million option and a $250 million credit line.
Second Quarter 2023 Financial Highlights
- Second quarter GAAP net income of $12.1 million or $0.59 per basic weighted average common share and Distributable Earnings(1) of $9.9 million or $0.49 per basic weighted average common share
- Declared dividend of $0.48 per common share for second quarter 2023
AFCG Stock Performance
On August 29th, AFCG shares closed at $13.10, an 8.01 percent decrease from the previous trading month. The stock, which has a price range of $9.91 to $17.72, is down 16.72% year to date. In this case, analysts at CNN Business predict that the 12-month average price for AFCG shares will be $17.50. Compared to the stock’s most recent trading price of $13.10, this prediction shows a gain of 33.89 percent.
Cannabis Infrastructure Insight: REITs to Watch in September 2023
In conclusion, as we enter September 2023, the landscape of cannabis REITs presents a promising realm of investment opportunities. Additionally, the highlighted REITs exhibit compelling potential for growth, aligning with the progressive expansion of the legal cannabis market. Investors keen on diversifying their portfolios and tapping into the thriving cannabis industry should watch these top-performing players closely. In general, the confluence of increasing legalization, growing demand for cannabis-related properties, and the potential for substantial dividends underscores the attractiveness of these REITs as a focal point for investment deliberations this month.
Overall, in transitioning towards long-term dividend stocks, a strategic approach is essential for harnessing the benefits of sustainable income generation. In addition, long-term dividend investments demand a thorough understanding of a company’s fundamentals, financial stability, and historical dividend track record. Investors can secure a steady stream of passive income by selecting well-established companies with a proven commitment to sharing profits with shareholders. Patiently weathering market fluctuations while reinvesting dividends can compound one’s returns, fostering wealth accumulation and financial security. Also, as September unfolds, exploring the synergy between burgeoning cannabis REITs and long-term dividend stock investment principles could pave the way for a rewarding and prosperous financial journey.
MAPH Enterprises, LLC | (305) 414-0128 | 1501 Venera Ave, Coral Gables, FL 33146 | new@marijuanastocks.com
