Investing In The Best Cannabis Stocks For Your Long Term Portfolio
As the markets continue to show declines are you looking for top marijuana stocks right now? Since reaching highs in February the best cannabis stocks to buy have declined for the rest of 2021. One major factor that’s caused these declines is delays in Congress on federal marijuana legalization and reform. This coupled with events like the Omicron variant and lower than expected jobs growth has brought a stop to any hope of a Santa Claus rally this week.
As it becomes less likely that cannabis banking will make it through attached to the NDAA cannabis investors are bracing for more possible declines. But there is one area of the cannabis sector that has held on to gains in 2021. In general, most leading marijuana REITs have shown more stability than the rest of the cannabis sector. As the US cannabis industry continues to expand on the state level many leading cannabis companies have turned to the cannabis REITs to help establish cultivation and processing facilities and facilitate upgrades.
This has given them a long-term portfolio of triple net leases that could give them long-term returns in the US cannabis industry. In addition, these top cannabis stocks also offer a dividend to shareholders something rarely found in most pot stocks to buy. As we close out the year with a low expectation of seeing federal cannabis reform pass, these top marijuana stocks could be some of the best long-term investments into the market right now.
Finding The Best Investments And Entry Levels
Before making any investment it’s important to always do your own research on a company. Researching a company’s finances and studying how the stock performs in the market can help you produce the greatest returns on your investments. In recent months this area of the cannabis sector has not declined like the rest of the best cannabis stocks. Because of this let’s look at 4 top marijuana stocks to add to your long-term watchlist in December.
Best Marijuana Stocks To Watch For Your Long Term Portfolio
- Innovative Industrial Properties, Inc. (NYSE: IIPR)
- AFC Gamma, Inc. (NASDAQ: AFCG)
- NewLake Capital Partners, Inc. (OTC: NLCP)
- Power REIT (NYSE: PW)
Innovative Industrial Properties, Inc.
Innovative Industrial Properties, Inc. is a real estate investment trust with a focus on the US-licensed cannabis industry and the largest cannabis REIT in the market. In general, the company has a total of approximately 7.5 million rentable square feet and 2.7 million square feet under development. Primarily, these properties are 100% leased with a weighted average remaining lease term of about 16.7 years. At the present time, the company owns 76 properties across 19 states. As of November 3rd, IIP has invested a total of $1.5 billion and committed another $391.7 million to reimburse tenants for property improvements. In addition, the company announced it acquired a property in California and is executing a long-term lease with Gold Flora. Also important, the company expanded its long-term real estate partnership with Goodness Growth Holdings, Inc. (OTC: GDNSF) in New York.
In November IIP reported its third-quarter 2021 results with general total revenues of about $53.9 million for the quarter. This represents an increase of 57% year over year. In addition, the recorded net income to common stockholders was approximately $29.8 million in Q3, or about $1.20 per diluted share. IIP paid a quarterly dividend of $1.50 per share In October representing an increase of 28% year over year. Currently, the company has approximately $127.3 million in cash and about $554.4 million in short-term investments. IIPR stock closed at $252.50 and is up 40.10% in the past six months. In November the stock has reached a new high of $288.02 and is now pulling back from that area. According to analysts at CNN Business IIPR stock has a 12-month median price target of $294.50 per share. In this case, this would represent an increase of 16.43% from its last trading price.
AFC Gamma, Inc.
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. Primarily, AFCG provides innovative and customized financing solutions through first-lien loans, mortgage loans, construction loans, and bridge financings. I general, AFC Gamma’s principles are now focused on the exponential growth of the cannabis industry. In October the company agreed to a credit upsize of $250 million 8.50% interest with an additional $100 million option with Verano Holdings Corp. (OTC: VRNOF).
In November AFC Gamma release its third-quarter 2021 results with a net income of $7.9 million in Q3 2021 or $0.48 per average share. Specifically, the company closed $119.2 million of new commitments and funded $89.3 million of new and existing commitments. In October AFC paid a dividend of $0.43 per share an increase of 13.2% from the prior quarter. AFCG stock closed at $22.00 on December 3rd down 9.47% in the past six months. The stock has a price range of $19.75-$25.05 and is down 5.13% in the past month. According to analysts at Tip Ranks AFCG stock has a 12-month average price target of $26.67 per share. This forecast would represent an upside of 21.23% from its last trading price.
NewLake Capital Partners, Inc.
NewLake Capital Partners is a leading provider of real estate capital to state-licensed cannabis operators. Founded in 2019, it is a triple-net lease REIT that acquires industrial and retail properties through sale-leaseback transactions, third-party purchases, and build-to-suit projects. At the present time, its tenants are some of the leading operators in the U.S. state-licensed cannabis industry and it is a trusted partner for their real estate needs. On November 12th the company delivered its third-quarter 2021 results with revenue of $8.1 million up 135% year over year. Its net income attributable to common stockholders was $2.7 million or $0.14. Funds from operations totaled $5.2 million or $0.27 per basic and $0.26 per diluted share. In addition, NewLake closed its initial public offering with gross proceeds of $102 million. The company declared and paid a partial third-quarter dividend of $0.12 per share.
At the present time, NewLake Capital has more than $325 million in assets, more than $110 million in cash, and a portfolio of 27 properties in 10 states. In general, the company is comprised of 17 dispensaries and 10 cultivation facilities. Currently NewLake Capital has tenants that include Curaleaf Holdings, Inc. (OTC: CURLF), Cresco Labs Inc. (CRLBF), Trulieve Cannabis Corp. (OTC: TCNNF), and Columbia Care Inc. (OTC: CCHWF). NLCP stock closed at $27.50 on December 3rd down 8.46% in the past month.
Power REIT (PW)
Power REIT is a real estate investment trust focusing on sustainable real estate with attractive risk-adjusted returns. In general, Power REIT owns a growing portfolio of Controlled Environment Agriculture or CEA properties in the form of greenhouse and associated processing space. Specifically, 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. In addition, Power REIT’s greenhouse properties are an environmentally friendly cultivation solution.
Power REIT expanded its Colorado footprint by acquiring a 10-acre property that includes the construction of a 12,000 square foot greenhouse space. As a result, 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 November Power REIT has 21 CEA properties totaling more than 1 million square feet. For the third quarter, the trust paid dividends of $0.484375 per share for a total of $1.9375 per total share. PW stock close on December 3rd at $55.14 up 106.44% year to date.
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