Study of IIPR

Study of IIPR

• 02/15/2021 – Recommended stocks with strong cash flow: CURLF, TCNNF, GTBIF, CRLBF

Hot Money Has Lit Up the Cannabis Sector. Here Are 4 Stocks to Try.

You would think Dan Ahrens would be loving this. He picks pot stocks for the $469 million AdvisorShares Pure Cannabis exchange-traded fund (YOLO), which is up 148% in a year. In September, his firm launched a domestic sibling, AdvisorShares Pure US Cannabis (MSOS), with just $2.5 million. It’s now up to nearly $1 billion. The funds charge 0.75% and 0.74%, respectively.

The trouble is, cannabis hot money is making a hash of fundamental analysis. Last year, Ahrens bet that companies with solid cash flows, or at least healthy growth prospects and balance sheets, would rise above the rest. He also heavily favored the U.S., which is years behind Canada on legalization, but which Ahrens describes as offering a cannabis opportunity akin to investing in alcohol just after the fall of prohibition nearly a century ago.

Those bets paid off, with the older AdvisorShares fund returning 47% in 2020, even though ETFMG Alternative Harvest (MJ), a $2 billion index fund, lost 11%. Stock-picking is better than indexing when it comes to cannabis, Ahrens says. But so far this year, Ahrens is up only 58%, putting him 16 points behind the index fund.

Deal-making is heating up. Earlier this month, Jazz Pharmaceuticals (JAZZ) said it would buy GW Pharmaceuticals (GWPH), which makes medicine from cannabis, for $7.2 billion in cash and stock—the biggest pot deal to date. The 323-year-old London Stock Exchange has approved its first cannabis listing. In the U.S., meanwhile, cannabis players can’t yet cross state lines, which means many are vertically integrated, from farms to dispensaries, and not yet as efficient as they could be.

For investors who wish to partake, Ahrens recommends what he calls the four horsemen of the U.S. industry. All have shot higher of late. Curaleaf Holdings (CURLF), valued at $11 billion, has the biggest footprint. Free cash flow is seen tripling next year, to nearly $300 million. Ahrens likes that the company has hired executives from the consumer-goods industry. Trulieve Cannabis (TCNNF), at $5.6 billion, is Florida’s weed leader. Its free cash flow is projected to more than double next year, to $163 million, and then rise another 77% in 2023. Green Thumb Industries (GTBIF), valued at $8.4 billion, and Cresco Labs (CRLBF), at $5.4 billion, are Midwest operators that could do $145 million and $170 million in free cash next year, respectively.

• 02/15/2021 – watch out this catalyst coming. Find a way to play on the recent big dip of stocks (TLRY, etc)

Booker, Wyden, Schumer Joint Statement on Cannabis Reform Legislation
Washington, D.C. – U.S. Senators Cory Booker, D-N.J., Ron Wyden, D-Ore., and Chuck Schumer, D-N.Y., issued the following joint statement regarding comprehensive cannabis reform legislation in the 117th Congress:

“The War on Drugs has been a war on people—particularly people of color. Ending the federal marijuana prohibition is necessary to right the wrongs of this failed war and end decades of harm inflicted on communities of color across the country. But that alone is not enough. As states continue to legalize marijuana, we must also enact measures that will lift up people who were unfairly targeted in the War on Drugs.

“We are committed to working together to put forward and advance comprehensive cannabis reform legislation that will not only turn the page on this sad chapter in American history, but also undo the devastating consequences of these discriminatory policies. The Senate will make consideration of these reforms a priority.

“In the early part of this year, we will release a unified discussion draft on comprehensive reform to ensure restorative justice, protect public health and implement responsible taxes and regulations. Getting input from stakeholder groups will be an important part of developing this critical legislation.”

Marijuana Stocks Fly After Democrats Say They’ll Reform Legislation

“The news proved a catalyst for the sector, and we believe will again when the bill is introduced (potentially in coming weeks),” Alliance Global Partners analyst Aaron Grey wrote in a note on Wednesday.

Indeed, the ETFMG Alternative Harvest ETF (ticker: MJ), an exchange-traded fund with exposure to cannabis firms, jumped 9.8% to $23.30 on Wednesday. That’s the ETF’s highest close since Sept. 19, 2019, according to Dow Jones Market Data. The ETF has risen for three-straight days, gaining 22% over that period. It’s up 62% year-to-date.

Canadian Cannabis stocks like Tilray (TLRY), Aphria (APHA), Aurora Cannabis (ACB), Canopy Growth (CGC), Cronos Group (CRON) jumped between 7% and 13% on Wednesday. Tilray and Aphria plan to merge in the first half of the year. U.S. growers like Curaleaf Holdings (CURLF) and Cresco Labs (CRLBF) also rose to a lesser extent on Wednesday.

“We are overall net positive on the news surrounding federal cannabis the past few days as we await the actual bill being introduced,” Grey wrote, adding that from limited commentary thus far, he thinks the bill could resemble the Strengthening the Tenth Amendment Through Entrusting States, or States, Act.

• 02/15/2021 – they can be good trading but not good investment due to bad fundamentals? need more study

Weed stocks tank as Reddit trade loses momentum

1. Shares of several cannabis stocks fell on Thursday after a big pop earlier this week.
2. Names like Tilray, Canopy Growth, Aphria, Aurora Cannabis and Sundial Growers garnered attention from the same group of Reddit traders that contributed to the epic short squeeze in GameStop last month.
3. Part of the discussion on Reddit has centered around the pending merger between Tilray and Aphria.
4. Other social media users are mentioning the possible decriminalization of the plant at the federal level under the Biden administration.

• 02/10/2021 –  retail and institutional investors might jump back to Tilray to chase growth in 2021. The POTX fund climbed 11%, extending this year’s surge to almost 130%. Its largest holdings Tilray Inc. and Aphria Inc. — which agreed to a merger of $3.8 billion in December — have skyrocketed in 2021, thanks in part to crowds on Reddit and internet forums piling in.

Is Tilray Set For Another Short Squeeze?

Cannabis companies have seen their share prices rise significantly this year as U.S. lawmakers look set to tackle federal marijuana reform measures.

What Happened: Shares of Tilray Inc. (NASDAQ:TLRY) have gained over 250% since the start of January. Traders and investors could be wondering if this is the beginning of a second big short squeeze for the cannabis cultivator.

Why It Matters: In the three months after it went public in June 2018, Tilray share prices shot up over 1,400% reaching $300 per share in September of that year after short sellers were forced to cover their positions due to its tight float structure and lack of shares available for purchase.

See also: How to Invest in Cannabis Stocks

At the time, short interest on Tilray sat at about 33%. Although share prices of Tilray have risen sharply over the last five weeks, the short interest is sitting much higher at approximately 51%.

This hasn’t gone unnoticed by the online trading communities, which have recently targeted Tilray in much the same way they drove up the share prices of companies such as GameStop Corporation (NYSE:GME) and AMC Entertainment Holdings Inc. (NYSE:AMC) — two other stocks with high levels of short interest.

The Week In Cannabis: Stocks Up On Jazz Pharma’s GWPH Acquisition, Potential Federal Moves

What’s Next: After peaking in 2018, shares of Tilray quickly fell after investors glimpsed into the company’s fundamentals and were unable to justify its value.

See also: How to Buy Tilray Here (ACB) Stock 

Its situation has changed over the last year, however, and investors have regained interest in the company.

In the last few months, Tilray has made major announcements, including its plans to merge with Aphria (NASDAQ:APHA) to become the largest cannabis producer in the world.

Although retail investors can take the credit for Tilray’s last big squeeze, the next one could be brought on by institutional investors who might hop on board if banks gain the ability to access cannabis companies through the passage of the MORE Act.

TLRY Price Action: The stock closed Monday’s session up 16.9% at $30.09.

• 12/10/2021 – Global X Cannabis ETF (POTX), the Cannabis ETF (THCX) and Amplify Seymour Cannabis ETF (CNBS) — have returned more than 90% year-to-date, according to data compiled by Bloomberg

Pot ETF Trio Soars 90% to Open 2021 on Legalization Hopes, M&A

The top performing exchange-traded funds so far in 2021 have at least one thing in common: They all track the pot industry.

The Global X Cannabis ETF (POTX), the Cannabis ETF (THCX) and Amplify Seymour Cannabis ETF (CNBS) — have returned more than 90% year-to-date, according to data compiled by Bloomberg. Those three non-leveraged products have largely outpaced the 4% gain in the S&P 500 Index.

That outperformance of those funds in the $5.8 trillion ETF industry highlights how hopes for legalization on both the state and federal levels are boosting the cannabis market and unleashing a wave of mergers and acquisitions. Most recently, New York Governor Andrew Cuomo proposed to legalize marijuana in his state, while a Democratic majority in Congress is fueling optimism of more widespread approval measures.

Such legislation “could legitimatize it and spur demand for marijuana, which would make companies that were suppliers more profitable,” said Todd Rosenbluth, director of ETF research for CFRA Research.

Besides a more accommodative political climate toward the group, cannabis stocks are surging on expectations for profit growth as well as a pickup in mergers and acquisitions, according to Kenneth Shea, an analyst at Bloomberg Intelligence.

Canopy Growth Corp. — a producer of medical marijuana — jumped 5% at 10:28 a.m. in New York after reporting revenue that beat the average analyst estimate. Other pot stocks and ETFs also surged on Tuesday.

The POTX fund climbed 11%, extending this year’s surge to almost 130%. Its largest holdings Tilray Inc. and Aphria Inc. — which agreed to a merger of $3.8 billion in December — have skyrocketed in 2021, thanks in part to crowds on Reddit and internet forums piling in.

Those companies are also the two biggest stakes in the $1.95 billion ETFMG Alternative Harvest ETF (MJ), currently in fourth place among non-leveraged ETFs. It’s surged more than 90% this year and has taken in about $200 million, already more than half of its entire 2020 inflows.

Still, the performance of cannabis ETFs is notoriously volatile. While the funds rallied in 2018 after Canada and California deregulated production, a combination of disappointing earnings reports, stalling legalization efforts and difficulties in developing the right mix of products hurt returns.

“It seems like the cannabis space is a whirlwind: You can have some great return periods and others that are more challenging,” said David Perlman, an ETF strategist at UBS Global Wealth Management. “It’s one where you have to expect volatility, and you really have to look at the ETF to make sure you’re getting the names that you want.”

• 12/04/2020 – policy catalyst for IIPT after passing House, however, senate might not pass

House passes sweeping reform bill to decriminalize marijuana

The House on Friday passed sweeping legislation that would decriminalize marijuana at the federal level, the first time either chamber of Congress has voted to legalize cannabis.

The measure, the Marijuana Opportunity Reinvestment and Expungement (MORE) Act, passed on a largely party-line vote of 228-164.

Six Democrats voted against the legislation and five Republicans voted for it. The GOP-controlled Senate is not expected to take up the measure.

The legislation would remove marijuana from the federal list of controlled substances and expunge some marijuana convictions for nonviolent criminals.

“The MORE Act is a common-sense bill that will make a tangible, real difference in the lives of millions of Americans. I’m proud of this bill centered around ideals of racial, economic, and moral justice and I look forward to the House passing it today,” House Judiciary Committee Chairman Jerry Nadler (D-N.Y.), who introduced the bill, tweeted before Friday’s vote.

The bill would allow states to continue to establish their own rules and regulations regarding sales and access to medical marijuana. Individuals would no longer be prosecuted federally for marijuana offenses, leaving the question of legality to states.

Recreational cannabis is legal in 15 states and Washington, D.C., and 34 states have legalized medical marijuana.

House Passes Marijuana Decriminalization Bill. What It Means for Pot Stocks.

The House of Representatives on Friday passed a bill that would decriminalize marijuana at the federal level. Though shares of some U.S. pot companies popped on Friday, the bill doesn’t have much hope in a Republican-held Senate.

The Marijuana Opportunity Reinvestment and Expungement, or MORE Act passed 228-164. The bill was opposed by six Democrats and supported by five Republicans, including Rep. Matt Gaetz (R-Fla.), who was among the bill’s co-sponsors.

• 11/09/2020 – more support

Support for Legal Marijuana Inches Up to New High of 68%

• 10/15/2020 – Cannabis companies might thrive under Biden presidency

Cannabis companies, betting on a Biden win, ready IPOs

Lopez and other CEOs say the potential January arrival in the White House of Democratic presidential candidate Joe Biden and his pro-decriminalization running-mate, Senator Kamala Harris, may prove a watershed moment for the industry.

But even if President Donald Trump wins a second term, changing views on marijuana laws among voters and lawmakers have brightened the outlook for the industry, CEOs and analysts said.

“Regardless of who wins, more and more states are showing their support for cannabis,” Lopez said.

• 01/01/2020 – Illinois became the 11 state to have legalized cannabis. This is why IIPR jumped 4% on 12/31/2019

Cannabis customers line up on ‘historic day’ outside North Aurora dispensary

• 12/19/2019 – SAFE Act may not get easily passed at senate, so it is good for IIPR?

Crapo delivers crushing blow to pot banking

WASHINGTON — Senate Banking Committee Chairman Mike Crapo delivered a significant blow Wednesday to legislation enabling banks and credit unions to serve the cannabis industry, announcing his opposition to a bill designed to help marijuana businesses in the more than 30 states that have legalized the substance.

“I have significant concerns that the SAFE Banking Act does not address the high level potency of marijuana, marketing tactics to children, lack of research on marijuana’s effects, and the need to prevent bad actors and cartels from using the banks to disguise ill-gotten cash to launder money into the financial system,” Crapo said in a detailed statement about his views on the issue.

Crapo’s plans have been the subject of intense speculation since the House passed the Secure and Fair Enforcement Banking Act. The biggest question has been whether he would hold a vote on pot banking legislation in 2019. But his statement all but confirms that he will not move such a bill this year.

And Crapo said the SAFE Banking Act could be amended to clarify that financial institutions must comply with “all applicable laws” in each respective state in which they operate, and ensure that the bill doesn’t “facilitate interstate commerce of cannabis.”

But industry groups said they are hopeful Crapo’s memo will not be a deterrent.

• 12/15/2019 – it is always good to see insider buying. Alan +5455 shares, David 160 shares

• 12/14/2019 – negative view on CBD from FDA

FDA warns about lack of research, possible risks of CBD

1. FDA is concerned that some people “wrongly” think CBD “can’t hurt.”
2. Consumers should be aware that the FDA still has questions about the safety and quality of CBD products, the agency says.
3. CBD has been widely touted as a harmless treatment — without much evidence to back it up.

• 11/16/2019 – seems like quite a few road blocks for CBD business

Short sellers are increasing bets on cannabis stocks even after summer selloff

Short sellers have continued to build positions in the cannabis sector, even after a broad re-rating of risk following a steep summer selloff, according to financial analytics and software-as-a-service firm S3 Partners.

Corporate governance scandals, such as the one involving illegal growing at CannTrust, and a regulatory clampdown on CBD products have added to the gloom.

In the U.S., the continued power of the black market and the reluctance of law-enforcement officials to crack down for fear of seeming to revive the war on drugs has hampered the development of the legal market. The continued federal ban on cannabis, and reluctance of federally insured banks to serve the sector, have formed another obstacle. A bill that aims to offer protection for banks has stalled in the Senate for now.

The cannabis sector has tumbled in the past few months as spooked investors began to re-evaluate its prospects amid a slower and more rocky-than-expected rollout of legal cannabis in Canada, which continues to be hurt by a shortage of stores.

• 11/10/2019 – Todd on IIPR: My takes from Todd’s podcast on 11/09/2019:Regarding IIPR, the dividend rate is great, and growth is amazing, the moat to entry into this business is huge due to regulation. Bank Act will not let big banks to jump into loan business of CDB since this legislation (not pass yet) only deals with credit card from bank. Actually, this bank act will help IIPR and might loan to IIPR to prevent IIPR to issue more equity financing. In addition, IIPR’s growth potential is still great since currently quite a few rents have not been taken yet. In addition, IIPR is now getting into dispensary business (leased 4 dispensary locations in Michigan) which has tremendous profit margin. More, admittedly, there were cannabis industry stock bubble starting two years ago, lots of growers cannot make money due to legal barriers in each state, growers need to pay a lot of premium to get into local state and let operator to work, the premium paid upfront hurts income in early stage of the growers. However, in the long run, all these premiums will pay out significantly. Therefore, Todd think Cannabis stock hits bottom now.
• 11/10/2019 – great 3Q19 of IIPR: Subs: 201% Revenue, 314% Net Income & 270% AFFO Growth

Wow….. this was even better than my most optimistic expectations.

Aside from the amazing results, there is a key item to note here. Just before the end of the quarter and in November they acquired and leased 4 dispensary locations in Michigan. This is the first entry point here and will diversify the portfolio.

Since January of this year, they have acquired 30 properties and now sit at 41….up from the 8 when we bought it in August 2018. The forward yield is now 4.1% for those buying today. It gets really fun when we go to 2020. Being conservative, if we assume the dividend growth slows to 50% increases from the over 100% YOY growth we are seeing now, that puts next year’s payout around $3.60/share and our dividend yield on our initial investment at 9%.

Much more after the cal later today.

The Release:

Innovative Industrial Properties Reports Third Quarter 2019 Results

Acquisitions Drive 201% Q3 Rental Revenue, 314% Q3 Net Income and 270% Q3 AFFO Growth Year-over-Year

SAN DIEGO, CA – November 6, 2019 – Innovative Industrial Properties, Inc. (IIP), the first and only real estate company on the New York Stock Exchange (NYSE: IIPR) focused on the regulated U.S. cannabis industry, announced today results for the quarter ended September 30, 2019.

Third Quarter 2019 Highlights

Financial Results and Financing Activity

· IIP generated rental revenues of approximately $11.2 million in the quarter, representing a 201% increase from the prior year’s third quarter.
· IIP recorded net income available to common stockholders of approximately $6.2 million for the quarter, or $0.55 per diluted share, and adjusted funds from operations (AFFO) of approximately $9.5 million, or $0.86 per diluted share. Net income available to common stockholders and AFFO increased by 314% and 270% from the prior year’s third quarter, respectively.
· IIP paid a quarterly dividend of $0.78 per share on October 15, 2019 to common stockholders of record as of September 30, 2019, representing a 30% increase from IIP’s second quarter 2019 dividend and an approximately 123% increase over the third quarter 2018’s dividend.
· In July, IIP completed an underwritten public offering of 1,495,000 shares of common stock, including the exercise in full of the underwriters’ option to purchase an additional 195,000 shares, resulting in net proceeds of approximately $180.1 million.
· In September and October, IIP issued shares of common stock for net proceeds of approximately $46.9 million under an “at-the-market” equity offering program.

Key Hires

· IIP hired Tracie Hager as Vice President, Asset Management, bringing nearly 30 years of senior management experience in institutional commercial property management.
· IIP hired Kelly Spicher as Senior Real Estate Counsel, a commercial real estate transactional attorney with over 16 years of big law firm experience representing institutional clients on complex real estate transactions.

Investments

· In July, IIP acquired a 145,000 square foot industrial property in Michigan and entered into a long-term triple-net lease with a subsidiary of Ascend Wellness Holdings, LLC (AWH), which intends to operate the facility for medical-use cannabis cultivation and processing upon completion of redevelopment, with IIP’s total investment in the acquisition and redevelopment of the property expected to be approximately $19.8 million (excluding transaction costs).
· In July, IIP acquired a 43,000 square foot industrial property in Nevada and entered into a long-term triple-net lease with a subsidiary of MJardin Group, Inc. (MJardin) for continued use as a regulated cannabis cultivation and processing facility, with IIP’s total investment in the acquisition and redevelopment of the property expected to be $9.6 million (excluding transaction costs).
· In July, IIP acquired a 35,000 square foot industrial property in California and entered into a long-term triple-net lease with DionyMed Brands, Inc. (DYME) for continued use as a regulated cannabis cultivation and processing facility and dispensary, with IIP’s total investment in the acquisition and redevelopment of the property expected to be $15.0 million (excluding transaction costs).
· In July, IIP acquired a 150,000 square foot industrial property in Massachusetts and entered into a long-term triple-net lease with a subsidiary of Trulieve Cannabis Corp. (Trulieve), which intends to operate the facility for regulated cannabis cultivation and processing upon completion of redevelopment, with an initial purchase price of $3.5 million (excluding transaction costs) and an additional commitment by IIP to fund up to $40.0 million for redevelopment of the property, which funding is subject to reduction at Trulieve’s option within the first six months of the lease term.
· In August, IIP acquired a property in Pennsylvania and entered into a long-term triple-net lease with a subsidiary of PharmaCann LLC (PharmaCann) for two industrial and greenhouse facilities that are expected to comprise a total of 54,000 square feet upon completion of development, with IIP’s total investment in the acquisition and development of the property expected to be $26.0 million (excluding transaction costs), which excludes up to an additional $4.0 million which may be requested by PharmaCann within nine months following closing.
· In September, IIP amended its lease with AWH at one of its Illinois properties to provide an additional $8.0 million for tenant improvements at the property, which resulted in a corresponding adjustment to base rent.
· In September, IIP amended its lease with Holistic Industries, Inc. (Holistic) at one of its Massachusetts properties to provide up to $2.0 million for tenant improvements at the property, which may be requested by Holistic until March 31, 2020, which funding will result in a corresponding adjustment to base rent.
· In September, IIP completed the acquisition of a four-property portfolio in southern California for a $17.3 million total purchase price (excluding transaction costs), comprising approximately 79,000 square feet of industrial space in the aggregate, and entered into long-term leases with subsidiaries of Medical Investor Holdings LLC (Vertical) for continued operation as licensed cannabis cultivation, extraction, manufacturing and distribution facilities.
· In September, IIP amended its lease with PharmaCann at one of its Massachusetts properties to provide an additional $8.0 million for tenant improvements at the property, which resulted in a corresponding adjustment to base rent.
· In September, IIP completed the acquisition of a 2,000 square foot dispensary location in Arizona for a total investment of $2.5 million (excluding transaction costs), including reimbursement for certain development costs, and entered into a long-term lease with a subsidiary of The Pharm, LLC (The Pharm) for operation as a licensed dispensary upon completion of development.
· In September, IIP amended its lease with a subsidiary of Vireo Health, Inc. (Vireo) at its Minnesota property to provide an additional $2.6 million for tenant improvements at the property, which resulted in a corresponding adjustment to base rent.
· Subsequent to quarter end, in October, IIP acquired a 156,000 square foot industrial property in Michigan and entered into a long-term triple-net lease with a licensee of LivWell Holdings, Inc. (LivWell), which intends to operate the facility for regulated cannabis cultivation and processing upon completion of redevelopment, with IIP’s total investment in the acquisition and redevelopment of the property expected to be approximately $42.0 million (excluding transaction costs).
· Subsequent to quarter end, in October, IIP acquired two properties in Illinois comprising a total of 90,000 square feet of industrial space and entered into a long-term triple-net lease with a subsidiary of Cresco Labs Inc. (Cresco), for continued operation as regulated cannabis cultivation and processing facilities, and pursuant to which IIP has agreed to provide reimbursement for certain tenant improvements, with IIP’s total investment in the acquisition and tenant improvements at the properties expected to be $46.6 million in the aggregate (excluding transaction costs).
· Subsequent to quarter end, in October, IIP completed the acquisition of a property in Florida for $17.0 million (excluding transaction costs), comprising approximately 120,000 square feet of industrial space, and entered into a long-term with a subsidiary of Trulieve for continued operation as a licensed cannabis cultivation facility.
· Subsequent to quarter end, in October, IIP acquired a 48,000 square foot industrial property in Illinois and entered into a long-term triple-net lease with PharmaCann, for continued operation as a regulated cannabis cultivation and processing facility, and pursuant to which IIP has agreed to provide reimbursement for certain tenant improvements, including an 18,000 square foot planned expansion, with IIP’s total investment in the acquisition and tenant improvements at the property expected to be $25.0 million in the aggregate (excluding transaction costs).

· Subsequent to quarter end, in October, IIP acquired a 70,000 square foot industrial property in Illinois and entered into a long-term triple-net lease with a subsidiary of GR Companies Inc. (Grassroots), for continued operation as a regulated cannabis cultivation and processing facility, and pursuant to which IIP agreed to provide reimbursement for certain tenant improvements, including a 50,000 square foot planned expansion, with IIP’s total investment in the acquisition and tenant improvements at the property expected to be approximately $28.2 million in the aggregate (excluding transaction costs).
· Subsequent to quarter end, in October and November, IIP completed the acquisitions and leases of four dispensary locations in Michigan for a total investment of approximately $9.0 million (excluding transaction costs), including reimbursement for certain tenant improvements, and entered into long-term leases with Green Peak Industries, LLC (GPI) for operation as licensed dispensaries.

Portfolio Update

Since January 1, 2019, IIP has acquired 30 properties in nine states. IIP entered into new tenant relationships with Cresco, DYME, EGP, Grassroots, Green Leaf, LivWell, Maitri, MJardin, Trulieve, Vertical and two other licensed operators in California, while expanding its tenant relationships with AWH, GPI, Holistic, PharmaCann, The Pharm and Vireo as each company continues to execute on its growth initiatives.

As of November 6, 2019, IIP owned 41 properties located in Arizona, California, Colorado, Florida, Illinois, Maryland, Massachusetts, Michigan, Minnesota, New York, Nevada, Ohio and Pennsylvania, totaling approximately 2.8 million rentable square feet (including approximately 903,000 rentable square feet under development/redevelopment), which were 100% leased with a weighted-average remaining lease term of approximately 15.5 years. As of November 6, 2019, IIP had invested approximately $410.2 million in the aggregate (excluding transaction costs) and had committed an additional approximately $138.9 million to reimburse certain tenants and sellers for completion of construction and tenant improvements at IIP’s properties. IIP’s average current yield on invested capital is approximately 13.8% for these 41 properties, calculated as (a) the sum of the current base rents (after the expiration of applicable base rent abatement or deferral periods), supplemental rent (with respect to the lease with PharmaCann at one of IIP’s New York properties) and property management fees, divided by (b) IIP’s aggregate investment in these properties (excluding transaction costs and including aggregate potential development/redevelopment funding and tenant reimbursements of approximately $138.9 million).

These statistics do not include up to $17.7 million that may be funded in the future pursuant to IIP’s lease with Grassroots at one of IIP’s Illinois properties, $40.0 million that may be funded in the future pursuant to IIP’s lease with Trulieve at one of IIP’s Massachusetts properties, the additional $4.0 million which may be requested by PharmaCann at one of IIP’s Pennsylvania properties or $2.0 million that may be funded in the future pursuant to IIP’s lease with Holistic at one of IIP’s Massachusetts properties, as the tenants at those properties may not elect to have IIP disburse those funds to them and pay IIP the corresponding base rent on those funds.

Financing Activity

In July 2019, IIP completed an underwritten public offering of 1,495,000 shares of common stock, including the exercise in full of the underwriters’ option to purchase an additional 195,000 shares, resulting in net proceeds of approximately $180.1 million.

In September 2019, IIP entered into equity distribution agreements with three sales agents, pursuant to which IIP may offer and sell from time to time through an “at-the-market” offering program up to $250 million in shares of its common stock. In September and October, IIP sold shares of its common stock for net proceeds of approximately $46.9 million under this program.

IIP expects to use the proceeds from these offerings to invest in specialized industrial real estate assets that support the regulated cannabis cultivation and processing industry and for general corporate purposes.

Financial Results

IIP generated rental revenues of approximately $11.2 million and $26.1 million for the three and nine months ended September 30, 2019, respectively, and rental revenues of approximately $3.7 million and $9.6 million for the three and nine months ended September 30, 2018, respectively. The increase for both periods was driven primarily by the acquisition and leasing of new properties, additional tenant improvement allowances provided to tenants at certain properties that resulted in base rent adjustments, and contractual rental escalations at certain properties.

For the three months ended September 30, 2019, IIP recorded net income and net income per diluted share of approximately $6.2 million and $0.55, respectively; funds from operations (FFO) and FFO per diluted share of approximately $8.4 million and $0.76, respectively; and AFFO and AFFO per diluted share of approximately $9.5 million and $0.86, respectively. For the three months ended September 30, 2019, AFFO and AFFO per diluted share increased by approximately 270% and 126% from the prior year period, respectively.

For the nine months ended September 30, 2019, IIP recorded net income and net income per diluted share of approximately $12.6 million and $1.20, respectively; FFO and FFO per diluted share of approximately $17.6 million and $1.72, respectively; and AFFO and AFFO per diluted share of approximately $20.6 million and $2.02, respectively. For the nine months ended September 30, 2019, AFFO and AFFO per diluted share increased by approximately 238% and 117% from the prior year period, respectively.

FFO and AFFO are supplemental non-GAAP financial measures used in the real estate industry to measure and compare the operating performance of real estate companies. A complete reconciliation containing adjustments from GAAP net income attributable to common stockholders to FFO and AFFO and definitions of terms are included at the end of this release.

• 11/06/2019 – Marijuana Property Stock Thrives as Pot Growers Struggle. And It Pays a Dividend.

Marijuana stocks are in the doghouse with investors. But the industry’s growing pains may translate to gains for a real-estate company: Innovative Industrial Properties.

IIP’s stock has declined sharply since July, when it peaked around $130 a share. But at recent prices around $78, it is still up more than 70% this year, defying declines across the industry. Companies such as Aurora Cannabis (ACB), Canopy Growth (WEED), and Cronos Group (CRON) are each down at least 19% year to date. Steep valuations, regulatory concerns and mounting losses among cannabis operators are weighing on the sector.

IIP appears to be benefitting from the industry’s financial struggles. The firm provides a lifeline to companies that need to raise capital and don’t have other cost-effective means. Sale-leasebacks deliver infusions of money, tiding a company over until its income outstrips its spending.

Many cannabis companies “raced to gain market share,” assuming they could keep raising capital “until they reached critical mass,” BTIG analyst Thomas Catherwood wrote in a note published Thursday. But the capital markets aren’t as accessible now, so companies are retrenching in the face of pressure to turn cash-flow positive. All of that should benefit IIP.

Catherwood points out that IIP has a solid tenant base. Its top four tenants are PharmaCann, Ascend Wellness, Cresco Labs, and LivWell, national companies that are “among the strongest operators in the U.S.,” he writes.

IIP does have a few shaky tenants, notably MJardin Group (MJARF) and DionyMed Brands (DYMEF). MJardin’s stock has plummeted 89% this year and trades at under a buck a share, but it remains one of the better growers in the U.S., Catherwood writes. DionyMed is operating in receivership by its creditors, but its real-estate assets would still have value if the company goes out of business or is sold.

A downturn in marijuana sales would hurt IIP, of course. And if more financial cracks emerge in the industry, its tenant base and cash flows would take a hit. But Catherwood views IIP as a way to separate the winners from the losers—a defensive play on a volatile industry. He has a Buy rating on the stock and a price target of $151.

• 11/02/2019 – Why Marijuana Dividend Stock Innovative Industrial (IIPR) Fell 18% in October, This dividend-paying cannabis stock has returned nearly 70% in 2019. – should I buy some LEAPS before Nov 6? why this sector became weak this month?

We can attribute Innovative Industrial stock’s subpar showing in October to continued weakness in the overall cannabis sector rather than to company-specific happenings. Last month, for instance, shares of leading Canadian cannabis growers Canopy Growth, Aurora Cannabis, and Cronos declined 13%, 18.2%, and 9.3%, respectively.

While Innovative Industrial’s stock has been dragged down over the last few months by sector weakness, the fast-growing company continues to post great quarterly numbers. In the second quarter, its revenue soared 155% year over year to $8.28 million, earnings per share (EPS) jumped 76% to $0.30, and adjusted funds from operations (FFO) per share — a key profitability metric for REITs — surged 90% to $0.59.

After its recent big pullback, Innovative Industrial Properties stock is trading at 23.7 times its forward earnings, so it’s looking quite interesting. This is a compelling valuation for a company with its growth dynamics.

Investors should be getting material news soon, as the company is slated to report its third-quarter results on Wednesday, Nov. 6, after the market closes.

Wall Street is looking for EPS of $0.47 on revenue of $10.7 million, representing growth of 124% and 174%, respectively, year over year. Strong earnings growth typically translates to robust FFO growth.

• 11/02/2019 – White House Signs Off On Proposed Hemp Rules From USDA – another law has been passed. Good news for Hemp business
• 10/31/2019 – Marijuana Stocks Have Gotten Crushed. Here’s What to Do With Them Now.

The stocks of companies focused on cannabis—which has been marketed to investors as holding incredible medical promise and as an alternative to alcohol—have largely proven to be bad investments. Yet a simple portfolio management trick can help long-term investors recast their fallen stocks at radically better prices. The timing is good.

The sector proxy, the ETFMG Alternative Harvest exchange-traded fund (ticker: MJ), is down 22% this year and dancing around a record low. Many of the top marijuana stocks—companies that generate the type of passion also seen around bitcoin—are down even more sharply. Investors have lost loads of money.

• 10/29/2019 – Innovative Industrial Properties: The Fastest Growing REIT In The World Could Soar 300% Within 2 Years

1. Innovative Industrial Properties is the fastest growing REIT in the world, generating 312% CAGR FFO/share growth from 2017 to 2019.
2. It’s also one of the most profitable REITs in the world, with 70% AFFO margins. That’s courtesy of its medical cannabis, triple-net-lease niche which results in investment spreads of 10%.
3. IIPR is sitting on almost $400 million in buying power and growing its property base like a weed including four property acquisitions in October alone.
4. The REIT is worth about $105 in 2019, $194 in 2020 and $284 in 2021, courtesy of 125%, 81% and 33% expected cash flow growth in those years.
5. IIPR is currently about 34% undervalued, a high enough margin of safety to make this speculative REIT a “strong buy” for small position sizes (2.5% or less is my recommendation). It could potentially quadruple by the end of 2021, and deliver 35% CAGR total returns over the next five years.

• 10/27/2019 – Todd mentioned that IIPR’s drops is due to the drop of Marijuana ETF’s drop, such as ETFMG Alternative Harvest ETF (MJ)
• 10/24/2019 – Marijuana Stocks – general knowledge about this industry and stocks
  Should you put your hard-earned money into marijuana stocks? We detail the investment opportunities, risks, and regulations in the cannabis space.

• 10/24/2019 – Marijuana Stock Innovative Industrial Properties Expands Its Cannabis Empire

IIP announced on Oct. 22 that it acquired two properties in Joliet and Kankakee, Illinois, which together comprise about 90,000 square feet of industrial space, for $32.8 million, excluding transaction costs. IIP is leasing the properties on a triple-net basis to Cresco Labs (OTC:CRLBF), which will continue to operate them as regulated cannabis cultivation and processing facilities. IIP will also reimburse Cresco for up to $13.8 million in tenant improvements.

IIP also announced on Oct. 23 that it acquired a 120,000-square-foot property in Quincy, Florida, from Trulieve Cannabis (OTC:TCNNF) for $17 million, excluding transaction costs. Like Cresco, Trulieve signed a triple-net lease with IIP and will use the facility for medical cannabis cultivation.

IIP previously completed a sale-leaseback deal with Trulieve for an industrial site in Holyoke, Massachusetts, back in July.

• 10/22/2019 – Marijuana REIT Innovative Industrial Properties Grows With LivWell Deal
  This REIT is getting a lot of buzz, but what’s powering it isn’t just pipe dreams
• 10/13/2019 – CBD For Dogs: The Best Products On The Market Based On Quality

6 Common Misconceptions About CBD

• 10/13/2019 – “even a dumper can make a lot of money on investing in CBD nowadays” – From Todd Sullivan
• 10/13/2019 – What Is CBD? Here’s The Complete Guide
• 10/10/2019 – Mitch McConnell Meets Marijuana Executives And Tours Cannabis Facility In Hushed California Visit
• 10/04/2019 – Senate pot banking bill may add weapon to fight money launderers
• 09/27/2019 – Better Cannabis Stock: MariMed vs. Innovative Industrial Properties
  These two companies have different approaches to profiting from the U.S. cannabis market. But which stock is more likely to be the bigger winner?

• 09/02/2019 – Tilson’s recommendation on CBD investment – I need to find time to read them through

One of my readers recently asked me which pot stock I recommend…

I knew enough to warn my readers (here and here) about the silly, overpriced dreck like Tilray (TLRY) at the top of the bubble a year ago. (Sure enough, it’s down 90% since then, exactly as I predicted.) But I’m not an expert on the sector… so I turned to my friend at Stansberry Research, Tom Carroll, who writes the Cannabis Capitalist newsletter.

Tom spent 17 years as an analyst and managing director at Legg Mason and Stifel Financial. His background as both an award-winning stock picker and his profound knowledge of the health care market make him well-qualified to analyze the cannabis industry and find undiscovered gems.

Here’s what he sent me:

My three favorite stocks in the sector right now are:

1. Charlotte’s Web (TSX: CWEB): It’s the leader in CBD products, with a five-year lead on everyone else. It has strong brand recognition and great intellectual property on its seeds and strains. And it has far less regulatory uncertainty than most other companies. I think this is a “must own” in the sector.

2. Green Thumb Industries (CNSX: GTII): It’s a vertically integrated U.S. player that’s very prudent with capital and is growing intelligently with a healthy mix of organic license award wins and acquisitions.

3. Trulieve (CNSX: TRUL): It’s the dominant cannabis company in Florida, which has a robust, limited-license medical cannabis program and a population that is rapidly adopting medicinal cannabis solutions. It recently started venturing into more states and is one of the few companies turning a real profit. Also, I think it’s a strong candidate to be acquired – probably one of the first to get snapped up in the coming wave of consolidation.

Though these three companies trade on Canadian exchanges, they don’t actually do any business in Canada. In fact, Tom isn’t a fan of the companies that operate in Canada in general. Here’s why…

I’m still not a fan of the Canadian or international-focused cannabis companies, though I’m intrigued by Canopy Growth (NYSE: CGC). It remains CEO-less after the board ousted former CEO (and stock promoter) Bruce Linton.

It’s a collection of assets that doesn’t seem to have a good strategic direction. That said, the stock has pulled back a lot – it’s been nearly cut in half in the last four and a half months.

It gets a lot of attention because spirit-maker Constellation Brands (STZ) has invested $4 billion in it, and because it trades on the New York Stock Exchange. As cannabis stocks gain traction again, it will likely see some momentum.

• 07/28/2019 – American public pension funds invest in cannabis through California-based REIT, Published July 25, 2019 | By Nick Thomas

More than a dozen public pension funds are investing in marijuana through a California real estate investment trust (REIT), a sign that institutional investors wielding billions of dollars in state funds are comfortable pumping money into the cannabis industry.

The public pension funds for government employees represent a broad range of states – from California, where marijuana is legal both medically and recreationally, to states where it is legal only medically, such as Louisiana.

In total, at least 16 state pension funds in the United States and one in Canada are investing in San Diego-based Innovative Industrial Properties, which leases properties to licensed medical cannabis operators, according to the Chicago Sun-Times.

• 07/28/2019 – 3 other states, numerous public pension funds aiming to profit off legal weed in Illinois
  Tennessee has invested even though Republican Gov. Bill Lee opposed a move in that state to legalize even medical marijuana. The other state governments: Texas and Alaska.
• 07/23/2019 – Pot banking bill supporters seek path to passage in skeptical Senate
  BY SYLVAN LANE – 07/23/19 05:00 PM EDT

Called the SAFE Banking Act, the measure would bar federal regulators and prosecutors from penalizing banks and credit unions for serving marijuana-based businesses if those firms are complying with state law.
The bill is likely to pass the House, where cannabis legalization or decriminalization in some form is broadly supported among the Democratic majority. The trouble then lies in the GOP-controlled Senate, with Republicans are far less interested in aiding the burgeoning cannabis industry.

Supporters of the measure acknowledge how ideological divides and open questions about the safety of pot use could hinder it in the Senate.

But the bill’s advocates hailed a subtle but potentially significant comment from Sen. Mike Crapo (R-Idaho), the conservative Banking panel chairman, as a sign of progress.

“I think a case has been made pretty strongly here about the need to get the banking industry issues relating to cannabis resolved,” said Crapo, whose home state bans marijuana for any purpose.

“This is a very important and complex issue that we need to get right.”

Crapo was but one of only two Republicans to show for the hearing, including Sen. Cory Gardner (Colo.), the bill’s lead GOP co-sponsor who is up for reelection in a swing-state next year.

The measure’s supporters insist that if Congress can’t resolve marijuana’s federal stats, it should at least allow banks and credit unions to serve state-legal firms in the 33 states where the drug is legal in some form.

• 07/22/2019 – Innovative Industrial Properties (IIPR) continued to slump on July 22. The stock lost almost 6.8% of its value on the day. It’s down 7% so far this month, and it’s currently trading at $114.9. The company is set to announce its earnings results on August 7.IIPR stock has become an investor favorite recently. Unlike other cannabis players, the company doesn’t deal directly in the cannabis market. IIPR is a specialized real estate investment trust. It provides real estate solutions to medical cannabis players.

What’s driving the pessimism?
Innovative Industrial Properties has been slumping since it announced that it would be raising additional capital. The company recently announced that it would issue approximately 1.3 million common shares to the public and that it expected to raise $163.8 million. IIPR intends to use the new capital to purchase real estate for serving the cannabis industry.

Is IIPR overpriced?
When IIPR made the announcement, the stock saw selling pressure. In the announcement, it said that it would purchase the stock at a price of $126 per share. It was already trading significantly higher before the announcement. By issuing shares at $126, the company is indicating its own fair value assessment.

• 07/05/2019 – 3 Marijuana Stocks to Avoid in July, These popular pot stocks should be off-limits for cannabis investors
• 07/04/2019 – summary for IIPR in gurufocus
• Intro of IIPR –

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