Investing Long Term In Cannabis For 2023
Are you trying to find the best marijuana stocks for 2023? Due to recent developments on Capitol Hill and the failure to approve federal cannabis legalization, marijuana stock prices have decreased. In addition, Congress failed to enact banking laws, preventing the cannabis business from banking in the US. Although Congress failed to enact cannabis legislation in 2022, there may be further attempts in 2023.
Cannabis REITs are one segment of the cannabis industry that might grow even without an end to prohibition. In general, these companies are one of the few sources of finance for the cannabis market since they buy cannabis facilities and then lease them back using triple-net leases that shift most of the costs to the occupants.
Using the sector’s decline, investors may be able to benefit from the current market trend. The cannabis market is also expected to double in size over the next five years, allowing marijuana REITs to increase steadily in value. If you’re looking to make long-term investments in the cannabis sector, let’s look at two of the best cannabis stocks for your portfolio right now.
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Top Marijuana REITs For 2023 Watchlist
- AFC Gamma, Inc. (NASDAQ: AFCG)
- Power REIT (NYSE: PW)
AFC Gamma, Inc.
AFC Gamma, Inc. is a well-known cannabis ancillary business with a healthy cash flow and competent management. In 2020, the business was established with a focus on supply and demand theories, markets for those theories, real estate security, and other types of collateral. Among AFCG’s specialties are first-lien loans, mortgage loans, construction loans, bridge financings, and other unconventional financings. In general, the recent marketing attempts of AFC Gamma have been centered on the quickly growing cannabis market. The company granted Verano Holdings Corp. (OTC: VRNOF). a $100 million option and a $250 million credit line.
AFC Gamma’s net income increased by 45% during the third quarters of 2021 and 2022, reaching $11.5 million, or $0.57 per basic weighted average share of common stock. Additionally, the company’s distributable earnings1 grew from the third quarter of 2021 to the third quarter of 2022 by 64%, from $6.7 million to $11.8 million, or $0.59 per basic weighted average share of common stock. AFC Gamma also paid out a dividend for the third quarter of 2022 on October 14, 2022, at a rate of $0.56 per common share, a 30% increase from the third quarter of 2021.
By November 1, 2022, the company had completed $203.8 million in new commitments, funded $167.6 million in new and ongoing commitments, and refinanced $32.0 million in debt from existing creditors. On October 14, 2022, AFCG distributed a normal quarterly cash dividend of $0.56 per share of ordinary stock to stockholders of record on September 30, 2022. For the quarter ending December 31, 2022, the business announced a $0.56 dividend per share in December.
AFCG Stock Performance
On January 9th, AFCG shares closed at $15.70, a 6.44 percent decline in the last trading month. The stock, which has a price range of $14.90 to $20.74, is down 21.89% in the past year of trading. Analysts at CNN Business predict that the 12-month average price for AFCG shares will be $22.00 In comparison to the stock’s most recent trading price of $15.70, this prediction shows a gain of 40.22 percent.
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Power REIT (PW)
Being a real estate investment trust that prioritizes long-term investments with superior risk-adjusted returns is Power REIT’s main goal. At the present time, Power REIT’s portfolio of CEA properties is rapidly expanding with new processing facilities and greenhouses. Tenants who have been awarded permission to cultivate medical marijuana on the land have taken over the leases for the buildings. Power REIT will use the funds to complete the necessary improvements to the assets prepared for development. Greenhouse facilities owned by Power REIT have room for growth.
For the second quarter of 2022, PW reported core FFO of $0.41 per share, a decrease from core FFO of $0.51 for the corresponding period in 2021. Additionally, for the quarter that ended June 30, 2022, core FFO was $0.41 per share as opposed to $0.40 per share for the quarter that ended March 31, 2022. PW currently holds more than 2.2 million square feet of controlled environment agricultural (CEA) facilities, including 22 greenhouses. PW owns 601 acres and has seven ground leases for solar projects totaling 112 kilometers of railroad land. 77.5 percent of REIT Power Series About $163,000 ($0.484375 per share) in cumulative quarterly dividends on redeemable perpetual preferred stock were paid by the Trust.
PW Stock Performance
PW stock closed on January 9th at $4.18, down 15.35% for the last trading month. Currently, the stock has a 52-week price range of $3.70-$81.99 and is down 93.98% in the last year.
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Investing Long Term In Marijuana REITs For 2023
For new investors searching for long-term investments to enter the cannabis industry, cannabis REITs can be a good option. You should always conduct your research before making an investment in a company. Generally, the companies financial statements and press releases may reveal which offers the best investments. These marijuana stocks might be the ones to watch if you want to make long-term investments in 2023.
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