3 Cannabis REITs to Buy Now as US Legalization Momentum Builds
The cannabis REIT sector continues to attract attention from income-focused investors this week. The US cannabis industry generated nearly $36 billion in legal sales in 2024. Furthermore, analysts project growth to exceed $70 billion by 2030. This expansion creates significant demand for cultivation and retail facilities. Consequently, cannabis REITs provide operators with capital while offering investors reliable income streams. Recently, federal rescheduling news has fueled optimism across the sector. The Department of Health and Human Services recommended moving cannabis to Schedule III. This shift would reduce taxes for operators and improve profitability. As a result, tenant strength may increase, enhancing REIT stability. Therefore, investors are closely monitoring these developments when evaluating opportunities.
At the same time, technical analysis plays a key role in trading cannabis REITs. Many shares are testing important support and resistance levels. For example, investors watch moving averages and volume trends to confirm breakouts. However, the sector remains volatile and sensitive to political headlines. Thus, proper risk management is essential for navigating this market. Traders should use stop losses and limit position sizes to manage exposure. Moreover, long-term investors must diversify holdings to reduce concentration risk. Careful entry points, based on chart analysis, can improve potential returns. In conclusion, combining technical discipline with risk management is critical. These strategies help investors capture growth while protecting against downside risks this week.
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Best Marijuana REIT Stocks in 2025: Income and Growth Opportunities
- Innovative Industrial Properties (NYSE: IIPR)
- NewLake Capital Partners (OTC: NLCP)
- Chicago Atlantic Real Estate Finance (NASDAQ: REFI)
Innovative Industrial Properties (IIPR)
Innovative Industrial Properties is the largest cannabis-focused REIT in the United States. The company provides sale-leaseback funding to licensed operators. Its portfolio spans 19 states and includes more than 100 properties. These assets total over 9 million rentable square feet. Tenants include some of the largest multi-state operators in the sector. IIPR’s properties cover cultivation facilities, processing centers, and dispensaries leased to third-party operators. Leases are long term and structured as triple-net agreements. This model provides predictable rent escalations and stable cash flows. Importantly, the portfolio is geographically diverse, reducing exposure to any single market. The company does not directly operate dispensaries. Instead, its strength lies in financing and real estate management. For August, investors should watch how ongoing federal reform discussions impact its tenants. Rescheduling or legalization shifts could affect both tenant health and rent coverage, shaping IIPR’s long-term growth profile.
Financially, IIPR continues to demonstrate resilience despite cannabis industry volatility. In the latest quarter, revenue topped $62 million, showing year-over-year growth. Net income exceeded $25 million, supporting continued dividend distributions. Earnings per share stood near $0.86. The company declared a quarterly dividend of $1.90, maintaining its strong yield. At quarter’s end, IIPR managed 108 properties across its portfolio. Management also announced a $270 million investment into a life sciences platform. This move represents strategic diversification beyond cannabis. The blended yield of these investments exceeded 14%, highlighting management’s focus on returns. Investors should monitor rental collections, lease renewals, and occupancy trends closely. Tenant restructurings remain a risk, though the company’s underwriting discipline offers some protection. Overall, IIPR pairs stable lease terms with forward-looking growth strategies. That combination positions it as a top cannabis REIT to watch this August.
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NewLake Capital Partners (NLCP)
NewLake Capital Partners is a smaller, internally managed cannabis REIT. The company owns 34 properties across 12 states leased to 13 different tenants. The portfolio includes both retail and cultivation sites. Currently, NLCP owns 19 dispensary properties and 15 cultivation facilities. These assets provide diversification across multiple markets. Leases are structured as long-term triple-net agreements, ensuring predictable rent escalations. States with strong regulatory frameworks, including Illinois, Massachusetts, and Florida, play key roles in NLCP’s footprint. Unlike operators, the company does not run dispensaries itself. Instead, it focuses on leasing to licensed operators in limited-license states. This strategy reduces volatility and spreads risk across geographies. Consequently, investors gain exposure to both retail and production. Property-level developments, including tenant build-outs, can impact realized yields. As the cannabis market stabilizes, NLCP’s conservative approach continues to attract income-focused investors.
Financially, NLCP delivered steady second-quarter results. Revenue came in near $12.9 million, reflecting modest year-over-year growth. Net income reached $7.3 million, while FFO totaled $11.4 million. Adjusted FFO stood at $11.5 million, highlighting consistent operating performance. The company paid a quarterly dividend of $0.43 per share. The AFFO payout ratio remained manageable at roughly 79%. Liquidity at quarter end was over $100 million, with debt to assets at only 1.6%. Notably, no debt matures until 2027, giving management flexibility. These figures demonstrate financial stability even amid industry headwinds. Some tenant challenges remain, including issues related to AYR Wellness. However, security deposits provide partial protection against payment disruptions. NLCP’s conservative balance sheet and disciplined underwriting help sustain dividend payments. For investors, the appeal lies in reliable income and defensive positioning. Overall, NLCP offers steady returns, making it a strong REIT pick for August.
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Chicago Atlantic Real Estate Finance (REFI)
Chicago Atlantic Real Estate Finance operates as a commercial mortgage REIT. The company does not own properties but originates senior secured loans. Its loans finance cultivation, processing, and retail facilities for licensed cannabis operators. As of mid-2025, its loan portfolio totaled more than $420 million in principal. This was spread across about 30 portfolio companies. The loan mix consisted of roughly 40% fixed-rate and 60% floating-rate loans. This structure provides income stability while allowing participation in rising interest rates. REFI emphasizes conservative lending standards and broad diversification. Borrowers are typically required to pledge collateral and guarantees. Importantly, REFI does not run dispensaries itself. Instead, it supports the industry through lending while managing credit exposure. For August, investors should watch underwriting discipline, credit quality, and new loan deployment. These factors determine both income stability and dividend capacity in a shifting regulatory environment.
Financial performance in the latest quarter remained stable. Distributable earnings per share were $0.51, slightly above expectations. Net income was nearly $9 million, demonstrating strong credit performance. The company maintained its quarterly dividend of $0.47 per share. Liquidity was around $109 million, supported by both cash and revolver availability. Total leverage was roughly $121 million, providing room for further loan growth. The loan pipeline exceeded $650 million, signaling strong demand for capital. Since its inception, the company has closed more than $2.8 billion in loans. Portfolio yields remained attractive, averaging near 16.8% at maturity. However, yields have moderated compared to earlier years, reflecting industry conditions. At least one loan remained on non-accrual, underscoring credit risk. Even so, the portfolio’s mix of fixed and floating structures adds resilience. Overall, REFI delivers high yields with disciplined risk management. This makes it a compelling cannabis REIT to watch in August.
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