Top Cannabis Stocks For Your List Before Cannabis Reform
Going into Thanksgiving this week top marijuana stocks have been seeing declines until a bipartisan push to possibly pass cannabis banking reform has been announced. On Tuesday, November 23rd two attorney generals participated in a panel to discuss freeing up banks to be able to work with licensed cannabis companies. With a continued push for cannabis reform, we could see some momentum for the cannabis sector going into the holidays.
But there is one area of the cannabis sector that has continued to see some upside in 2021. In the US cannabis REITs have defied the rest of the market and climbed this year up to this point. For the most part, these top marijuana stocks could be the best cannabis stocks to invest in on a long-term basis. In general, they are one of the few ways for shareholders to currently get a dividend from a cannabis investment.
Additionally, these real estate investment companies have long-term lease portfolios that seem to be growing alongside the cannabis industry. Since the pandemic, the US cannabis market has been growing rapidly on the state level. Without the support of US banks, many licensed cannabis companies have turned to marijuana REITs to expand cultivation facilities and make improvements. In 2021 some of these cannabis stocks have also shown more stability than the rest of the cannabis sector.
Long Term Investing In The Cannabis Market
In the past few years, hedge funds and money managers have focused on this area for their long-term cannabis investments. As the cannabis market continues to grow on the state level and the possibility of federal cannabis reform increase the best pot stocks could have a catalyst in the making. As the rest of the top marijuana stocks to buy continue to show significant market volatility these ancillary cannabis companies are providing less volatility. Let’s look at 2 top marijuana stocks to add to your watchlist for your long-term portfolio.
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Best Marijuana Stocks To Watch For Long Term Investing
- Innovative Industrial Properties, Inc. (NYSE: IIPR)
- AFC Gamma, Inc. (NASDAQ: AFCG)
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. Currently, 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. IIP continues to close acquisitions including properties in Pennsylvania and Massachusetts expanding its lease portfolio significantly in 2021. Immediately, after the purchase, IIP will enter a long-term triple net lease with the cannabis company using the property. 
The company announced acquired a property in California and is executing a long-term lease with Gold Flora. 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. This equals approximately $1.20 per diluted share. To highlight, 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 Performance
IIPR stock closed at $261.63 on November 23rd down 5.60% in the past five trading days. 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 12.56% from its last trading price of $261.63.
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AFC Gamma, Inc.
Next, we have AFC Gamma, Inc. an institutional lender to leading cannabis companies with strong operations and cash-flow prospects. Recently established in 2020, the company specializes in real estate security and other collateral. In addition, the company invests in locations in states with favorable supply/demand fundamentals and legislative environments. In general, AFCG provides innovative and customized financing solutions through first-lien loans, mortgage loans, construction loans, and bridge financings. Specifically, 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. This equals $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.
Words From The CEO
“We are pleased with the progress we are making on our business plan. Since the start of the third quarter, AFC Gamma closed on over $165 million in new commitments, and our pipeline remains robust. Importantly, our successful completion of a $100 million unsecured debt offering established AFC Gamma’s initial debt cost of capital and enables the continued expansion of our loan portfolio. As a result of our growth and performance, we were also pleased to increase our quarterly dividend by 13.2% and reward our shareholders. We look forward to continuing to amplify our presence as a lender within the growing cannabis industry while delivering enhanced shareholder value.”
Leonard Tannenbaum, AFC Gamma’s Chief Executive Officer
AFCG Stock Performance
AFCG stock closed at $23.42 on November 23rd down 2.29% for the trading day. The stock has a price range of $19.75-$25.05 and is down 2.05% 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 about 13.88% from its last trading price of $23.42. As the cannabis industry continues to grow across the US these could be the best marijuana stocks for watchlist right now.
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