Top Cannabis REITs For Your 2022 Watchlist
Are top marijuana stocks on your watchlist for long-term investments? For many cannabis investors taking long-term positions in the cannabis sector could be difficult due to extreme market volatility. But there has been an area of the market that could be better for the long-term investor. In the past few years, cannabis REITs have handled the downturn in top cannabis stocks better than vertically integrated pot stocks.
Real estate investment trusts that focus on cannabis have become a good option for long-term investing in the cannabis industry. Analysts predict that the cannabis market will more than double in size during the next five years. Legal cannabis sales in North America are anticipated to increase from $20.9 billion in 2022 to $47.3 billion in 2027, according to a recent Statista analysis.
This might be an area of tremendous growth for investors that are not seen in many other sectors or businesses. Many of the largest marijuana REITs have long-term triple net leases and loans in place with major cannabis companies. This long-term portfolio might provide investors with long-term gains. Dividends for shareholders are another feature that makes these marijuana REITs stronger long-term investments.
Investing In The Cannabis Industry Long Term In 2022
It’s important to conduct your own research before investing in cannabis stocks. Examining a company’s results and press releases might point you in the direction of the best-performing companies in the market. Following the market behavior of a cannabis stock may also assist you in determining the optimum entry point for your investment. There are several prospective catalysts that may produce some upside this year as leading marijuana companies continue to trade near new set lows. Let’s look at 3 top marijuana REITs for your long-term portfolio in 2022.
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Best Marijuana REITs To Add To Your Long Term Investments In 2022
- Innovative Industrial Properties, Inc. (NYSE: IIPR)
- Power REIT (NYSE: PW)
- AFC Gamma, Inc. (NASDAQ: AFCG)
Innovative Industrial Properties, Inc.
Innovative Industrial Properties, Inc., a real estate investment trust focused on the regulated cannabis market in the United States, is one of the major marijuana REITs. The company now has 7.7 million square feet of rentable space, with plans to add 2.7 million square feet soon. Most of these structures are fully leased, with an average lease term of 16.4 years. The corporation now operates 107 properties in 19 states. IIP has committed $1.9 billion to property repairs as of April, with another $227.1 million in tenant payments promised. IIP continues to acquire properties, mostly in Pennsylvania and Massachusetts and anticipates a major increase in its lease portfolio in 2021.
On May 4th IIP reported its first-quarter 2021 results with total revenue of $64.5 million a 50% increase sequentially. In addition, the recorded net income attributable to common shareholders was $34.7 million or $1.32 per diluted share in Q1 2022. The company paid a quarterly dividend of $1.75 per common share on April 14, 2022, representing an increase of 17% over Q4 2021. This would equal an annualized dividend of $7.00 per share. From January 1st to May 4th IIP Acquired six properties and executed five lease amendments to provide additional improvements to other properties.
On May 5th, IIPR stock closed at $140.61 and is down 30.10% in the last month of trading. The stock is currently trading in a 52-week price range of $138.45-$288.02, down 46.52% year to date. IIPR stock has a 12-month median price target of $250 per share, according to CNN Business analysts. In this forecast, this would be a 77.29% increase over the previous trade price of $140.61.
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Power REIT (PW)
Power REIT is a real estate investment trust specializing in long-term real estate with high risk-adjusted returns. Currently, Power REIT, for example, has an expanding portfolio of CEA assets, like greenhouses and processing factories. The properties are now rented to tenants who are licensed to produce medical marijuana on the premises. The funds are available for Power REIT to complete the necessary improvements to the assets, which are ready for development. Greenhouse facilities owned by Power REIT offer a long-term growth opportunity.
On April 1st Power REIT announced its fourth quarter and full-year 2021 results with a net income per share increase of 42%. The company invested $48 million in 9 greenhouse properties positioning the company with emerging technologies that focus on greenhouse cultivation. In addition, the company’s portfolio currently has 21 CEA properties totaling more than 1 million square feet.
PW stock closed on May 5th at $23.51 down 37.79% for the last month of trading. Currently, the stock has a 52-week price range of $22.35-$81.99 and is down 65.87% year to date. According to analysts at CNN Business PW stock has a consensus price target of $68 per share. In this case, this would represent an upside of 189.24% from its last trading price of $23.51.
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AFC Gamma, Inc.
AFC Gamma, Inc. is a well-known cannabis business with strong cash flow and operations. The company, which began operations in 2020, specialized in real estate security and other collateral, as well as locations with strong supply/demand fundamentals and favorable legal conditions. AFCG specializes in first-lien loans, mortgage loans, construction loans, bridge financings, and other unconventional financing solutions. The cannabis industry’s rapid rise has been the focus of AFC Gamma’s recent efforts. In October, the company agreed to a $250 million credit upsize and a $100 million option with Verano Holdings Corp. (OTC: VRNOF).
AFC Gamma revealed its fourth quarter and full-year 2021 results on March 10th. The corporation made a net profit of $21 million in 2021 or $1.57 per basic weighted average share. In 2021, the company made a distributable profit of $24.7 million, or $1.85 per share. In addition, the business closed $341.3 million in new commitments in 2021. The company reported gross originations of $127.3 million in the fourth quarter of 2021 in January. Acreage Holdings, Inc. (OTC: ACRHF) has received a $150 million credit facility from AFC Gamma to aid in its development aspirations. The business priced its public offering of 3 million ordinary equity shares at $20.50 per share on January 5th. The company will report its first-quarter 2022 results on May 9th before the opening.
AFCG stock ended at $16.01 on May 5th down 14.98 % from the previous month. The stock is down 29.66% year to date, with a price range of $15.72 to $25.50. Tip Ranks analysts estimate a 12-month average price of $24.50 per share for AFCG shares. This forecast indicates a 53.03 percent gain over the stock’s most recent trading price of $16.01.
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