October’s Finest: Cannabis REITs Offering Dividends for Your Long-Term Investment Strategy
As the cannabis market develops and grows, investors increasingly seek opportunities to benefit from its development potential. Generally speaking, Real Estate Investment Trusts (REITs) specializing in cannabis properties offer one possible route for long-term investment in this developing industry. In addition, these cannabis-focused REITs present a special chance to benefit from possible high dividend yields while participating in the sector’s expansion. Overall, we’ll look at some of the top cannabis REITs that have been attracting the interest of investors looking for a dependable and potentially profitable entry point into the burgeoning cannabis business in this post.
The cannabis sector has seen tremendous growth in recent years, and things look much more optimistic in the years to come. Also, market research indicates that the legal cannabis market worldwide is predicted to expand significantly; estimates say that within a few years, it may have annual sales of $100 billion or more. Increased legalization attempts, growing medical and recreational use, and rising consumer acceptance of cannabis products all contribute to this substantial rise. In general, cannabis REITs are becoming more popular as the market develops as a strategic investment option since they give investors a chance to profit from the cannabis boom while also potentially receiving stable income streams. As a result, this makes them a tempting choice for those seeking dividends and long-term growth potential.
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The Top Cannabis REITs with Dividends in October 2023
- Innovative Industrial Properties, Inc. (NYSE: IIPR)
- NewLake Capital Partners, Inc. (OTC: NLCP)
- AFC Gamma, Inc. (NASDAQ: AFCG)
Innovative Industrial Properties, Inc.
An American real estate investment company with a concentration on cannabis is called Innovative Industrial Properties, Inc. With an additional 2.5 million square feet coming soon, the corporation will have 8.7 million square feet of rentable space. Additionally, the majority of these properties are completely leased, with an average lease term of 16.4 years. One hundred eleven locations for the company are currently located throughout 19 states. In addition to the $227.1 million in projected rent payments, IIP had already spent $2.4 billion on property renovations by April. Due to continuous real estate acquisitions in Pennsylvania and Massachusetts, the company anticipates a considerable increase in portfolio size in 2022.
Second Quarter 2023
Financial Results
- Generated total revenues of approximately $76.5 million in the quarter, representing an 8% increase from the prior year’s quarter.
- Recorded net income attributable to common stockholders of approximately $40.9 million for the quarter, or $1.44 per diluted share.
- Recorded adjusted fund from operations (AFFO) of approximately $64.0 million, or $2.26 per diluted share, increases of 6% and 5% from the prior year’s quarter, respectively.
- Paid a quarterly dividend of $1.80 per common share on July 14, 2023 to stockholders of record as of June 30, 2023. The common stock dividends declared for the twelve months ended June 30, 2023 of $7.20 per common share represent an increase of $0.70, or 11%, over dividends declared for the twelve months ended June 30, 2022.
IIPR Stock Performance
On October 2nd, IIPR stock closed at $74.28, down 15.32% in the last month of trading. The stock is trading in a 52-week price range of $63.36-$125.38, down 26.71% year to date. In this case, IIPR stock has a 12-month median price target of $95 per share, according to CNN Business analysts. In this forecast, this would be a 27.95% increase over the last trade price of $74.28.
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NewLake Capital Partners, Inc.
NewLake Capital Partners, Inc. is a privately held real estate investment trust that provides real estate capital to state-licensed cannabis businesses through sale-leaseback deals, third-party purchases, and build-to-suit financing. In addition, thirty-two cultivation sites and dispensaries that belong to NewLake are triple-net leased to a single tenant.
Second Quarter 2023 Financial Highlights
Comparison to the first quarter ended March 31, 2023
- Quarter over quarter revenue, net income, Funds from Operations (“FFO”), and Adjusted Funds from Operations (“AFFO”) were flat. As a result, presented below are only the second quarter financial highlights.
- Revenue totaled $11.4 million.
- Net income attributable to common stockholders totaled $5.8 million.
- FFO(1) totaled $9.5 million.
- AFFO-diluted(1) totaled $9.9 million.
- Cash and cash equivalents as of June 30, 2023, were $40.7 million, with $22.8 million committed to fund Tenant Improvements (“TIs”).
Dividend
On June 15, 2023, the Company declared a second quarter 2023 cash dividend of $0.39 per share of common stock, equivalent to an annualized dividend of $1.56 per share of common stock. The dividend was paid on July 14, 2023, to stockholders of record at the close of business on June 30, 2023.
Outlook for 2023
NewLake Capital is providing AFFO guidance for full year 2023 of $39.8 to $40.8 million, an increase of 4.1% over AFFO for the same period the prior year, assuming the midpoint of that range. Also, on September 18th, the company announced and provided an update regarding its $10 million common share repurchase program. To date, the Company has acquired 713,831 shares of common stock at an average price, including commissions, of $12.96 per share, utilizing approximately $9.3 million of the original $10 million authorization. Thus, on September 15, 2023, the Company’s board of directors authorized a $10 million increase to the Company’s existing share repurchase program and extended the duration to conclude on December 31, 2024, giving the Company approximately $10.7 million remaining available under the program.
NLCP Stock Performance
NLCP stock closed at $13.69 on October 2nd, down 4.20% in the past month of trading. Additionally, the stock has a price range of $11.80-$19.50 and is down 14.54% year to date. In this case, analysts at Tip Ranks predict that the 12-month average price for NLCP shares will be $15.50. In comparison to the stock’s most recent trading price of $13.69, this prediction shows a gain of 13.22 percent.
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AFC Gamma, Inc.
AFC Gamma, Inc. is a well-known cannabis ancillary company that manages its capacity and cash flow effectively. Established in 2020, the business focuses on real estate security, markets for those markets, supply and demand theories, and other types of collateral. Among AFCG’s areas of expertise are first-lien loans, mortgage loans, construction loans, bridge financings, and other uncommon forms of financing. In addition, recent marketing campaigns by AFC Gamma have focused on the quickly growing cannabis market. In addition, Verano Holdings Inc. was given a $100 million option and a $250 million credit line by the corporation.
Second Quarter 2023 Financial Highlights
- Second quarter GAAP net income of $12.1 million or $0.59 per basic weighted average common share and Distributable Earnings(1) of $9.9 million or $0.49 per basic weighted average common share
- Declared dividend of $0.48 per common share for second quarter 2023
AFCG Stock Performance
On October 2nd, AFCG shares closed at $11.22, a 15.19% increase from the previous trading month. Additionally, the stock, which has a price range of $9.91 to $17.72, is down 28.67% year to date. In this case, analysts at CNN Business predict that the 12-month average price for AFCG shares will be $17.50. In comparison to the stock’s most recent trading price of $11.22, this prediction shows a gain of 55.69 percent.
Building Wealth with Cannabis REITs: October 2023’s Dividend Stars for Your Portfolio
Cannabis REITs present a promising choice for long-term investors, offering growth potential and stable dividends amid the cannabis industry’s expansion. Additionally, as we begin October 2023, prudent investors should carefully assess these top cannabis REITs to align with their financial objectives and risk tolerance in this evolving market.
Whether you’re seeking a dividend income or aiming to capitalize on the cannabis industry’s long-term growth prospects, the selected cannabis REITs highlighted in this article can be essential for your investment portfolio. By combining strategic insight, a long-term perspective, and a diversified approach, investors can position themselves to reap the benefits of the booming cannabis industry while enjoying the stability and income offered by these top-performing REITs.
MAPH Enterprises, LLC | (305) 414-0128 | 1501 Venera Ave, Coral Gables, FL 33146 | new@marijuanastocks.com
