Best Long-Term Investments In The Cannabis Sector
Are you looking for the best marijuana stocks to invest in for the long term? In general, the value of most cannabis stocks has declined, making them an appealing investment in 2023. Ancillary marijuana stocks are one possible sector for long-term cannabis investing.
As cannabis continues to blaze a trail of growth and profitability, investors are looking for attractive possibilities to benefit from its expanding market. Cannabis Real Estate Investment Trusts (REITs) is one such option that is gaining traction. These specialized investment vehicles offer individuals a unique opportunity to join the cannabis industry. But with no involvement in the complexity of marijuana cultivation, distribution, or retail operations.
Cannabis REITs have emerged as a solid choice for investors seeking to capitalize on the promise of the cannabis sector while limiting the risks associated with regulatory uncertainty and operational issues. In this article, we’ll look into Cannabis REITs and why they’re becoming popular to invest in the expanding cannabis business.
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2 Cannabis REITs To For June Watchlist
- Innovative Industrial Properties, Inc. (NYSE: IIPR)
- AFC Gamma, Inc. (NASDAQ: AFCG)
Innovative Industrial Properties, Inc.
Innovative Industrial Properties, Inc. is a cannabis-focused real estate investment company based in the United States. The company has 8.7 million square feet of rentable space available right now, with another 2.5 million square feet coming soon. Furthermore, most of these structures are fully leased, with an average lease length of 16.4 years. The corporation now operates 111 sites throughout 19 states. As of April, IIP has already spent $2.4 billion on property repairs, in addition to the projected rent payments of $227.1 million. IIP expects its portfolio to expand significantly in 2022 due to continued real estate investments in Pennsylvania and Massachusetts.
IIP generated total revenues of roughly $76.1 million in the first quarter of 2023, marking an 18% increase over the preceding year’s period. Furthermore, the firm reported net income attributable to common stockholders for the quarter of roughly $40.8 million, or $1.43 per diluted share. In addition, on April 14, 2023, IIP paid a quarterly dividend of $1.80 per common share to stockholders of record on March 31, 2023 (an AFFO payout ratio of 80%), for an annualized dividend of $7.20 per share. The common stock dividends declared for the fiscal year ended March 31, 2023, of $7.15 per common share, reflect a $1.00, or 16%, increase over dividends issued for the fiscal year ended March 31, 2022.
The company’s total property portfolio as of Q1 2023 consisted of 108 properties spread across 19 states, with roughly 8.9 million rentable square feet (including approximately 1.6 million rentable square feet under development/redevelopment).
IIPR Stock Performance
On May 25th, IIPR stock closed at $66.89, up 1.12% in the last month of trading. The stock is currently trading in a 52-week price range of $63.36-$137.33, down 34% year to date. In this case, IIPR stock has a 12-month median price target of $100 per share, according to CNN Business analysts. In this forecast, this would be a 49.37% increase over the last trade price of $66.89.
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AFC Gamma, Inc.
AFC Gamma, Inc. is a well-known cannabis ancillary firm with a healthy cash flow and capacity management. The business was established in 2020, focusing on supply and demand theories, markets for those theories, real estate security, and other kinds of collateral. Some of AFCG’s areas of expertise include first-lien loans, mortgage loans, construction loans, bridge financings, and other uncommon kinds of financing. The recent marketing attempts of AFC Gamma have been centered on the quickly growing cannabis market. The firm granted Verano Holdings Inc a $250 million credit line and a $100 million option.
For the first quarter of 2023, AFC Gamma reported a generally accepted accounting principle (“GAAP”) net income of $10.0 million or $0.49 per basic weighted average common share and Distributable Earnings of $11.6 million or $0.57 per basic weighted average common share for the first quarter of 2023. The Company paid a regular cash dividend of $0.56 per common share for the first quarter of 2023 on April 14, 2023. AFC Gamma paid out $11.5 million in dividends, or $0.56 per common share, in the first quarter of 2023, compared to Distributable Earnings of $0.57 per basic weighted average common share for the same period.
AFCG Stock Performance
On May 25th, AFCG shares closed at $11.42, a 2.89 percent decline from the previous trading month. The stock, which has a price range of $9.91 to $19, is down 27.40% year to date. In this case, analysts at CNN Business predict that the 12-month average price for AFCG shares will be $16.50. In comparison to the stock’s most recent trading price of $11.42, this prediction shows a gain of 44.86 percent.
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Using Marijuana REITs To Invest In The Cannabis Industry
Traditional real estate investment trusts have long been popular among investors. Creating Cannabis REITs has established a specialized niche within the larger real estate investment environment. These REITs can potentially provide investors with attractive returns while also providing exposure to a high-growth cannabis industry.
Top Cannabis REITs present an exciting possibility for investors wanting exposure to this rapidly rising industry. These investment vehicles can allow you to take advantage as the cannabis market evolves and matures. By combining the stability of real estate with the high-growth potential of cannabis, these specialized investment vehicles bring up a new world of possibilities for seasoned investors and newcomers.
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