The final quarter of 2018 has been a bumpy ride for many in the cannabis industry.
Despite continued positive developments such as interest from major players and a domino effect in legislation, the markets have proven a truth: There will always be periods of volatility in every industry.
It’s important to remember that markets rise and markets fall. They rarely stay down for long, and when they are down they often come roaring back. From its bottom in March of 2009, the Nasdaq composite went up 73% in just one year.
In September of 2015 Canopy stock was down 60% from its high, hitting a low of $1.81. An investor who held onto his stock that day instead of selling also endured a 45.4% decline in June of 2017 and a 42.3% decline to November 20 of this year. And that investor is now up 2,249% from the lows.
Of course, even knowing that a rebound is coming, it’s still a hard pill to swallow when we watch some of the biggest players in the burgeoning cannabis industry – Aurora, Canopy Growth, and Tilray – all fall from their peak prices by 45% or more in a single quarter. In those times, it’s always helpful to have a current success to lean on – a port in storm.
Fortunately, if you’ve been following the National Institute for Cannabis Investors since the beginning, you have had just such a port.
Continued Success for a Strong Prospect
Even after Innovative Industrial’s worst day of this quarter, the stock was still up over 15% since our Summit with former Speaker John Boehner.
As of the close of trading last week, the stock was up over 23% from our launch. At a time when most other stocks in the industry were taking a bath, it’s important to look at why this one did so well.
As you will recall, Innovative Industrial is a real estate investment trust (REIT) focusing on medical-cannabis growing facilities. Since the company doesn’t touch the plant, it isn’t running afoul of any U.S. federal laws. As such, it is not barred from trading on U.S. exchanges.
That means the company has been able to trade on one of the largest exchanges – the New York Stock Exchange – for months. That makes it a bit more attractive to traditional investors.
As an REIT, Innovative Industrial is also legally obligated to pay out a certain amount of earnings to shareholders. As earnings have risen, so has its dividend. The quarterly dividend payout just increased by 40% this fall.
That dividend raise – in addition to a strong third-quarter report – are a strong reflection of just how well positioned this company is for growth.
Over the years, the team here at the Institute has noticed a trend. If you want to beat Wall Street, if you want to trade like America’s elite, you need to have this one invaluable tool in your arsenal. Not only does it help you cut through the market noise, it also helps pinpoint the most lucrative profit opportunities in the game. And if you click here we can show you how you can get this powerful investing tool at your fingertips.
Unique Ownership Within the Cannabis Space
If those indicators alone don’t demonstrate just how solid a play Innovative Industrial is, look at its ownership.
Compared with the rest of the industry, the company’s level of institutional ownership is striking. Consider that Canopy Growth, which also trades on the NYSE, has just 11% institutional ownership – a figure impressive enough for the cannabis space. Innovative Industrial, on the other hand, comes in at a whopping 30%.
That kind of backing is a rarity at this point in the industry. The company’s success during the market’s fourth quarter downturn is evidence of what will happen when more institutional money finds its way into cannabis.
That’s why we continually say that you have to be in cannabis before the big institutions get involved in a big way. Cannabis may be the only market in the world where individual investors have an edge over the investing giants. To lose that advantage is to lose millions.
More to Come in the New Year
We’ve already told you 2019 will be an even better year for cannabis than 2018. That will be just as true for your free pick as for the rest of the industry.
Continued growth is essentially built into Innovative Industrial’s contracts with lessees. The company’s long-term leases include annual rent increases that will allow the company to realize an astounding 15.4% yield on its investments in its current properties. Since almost all the profits from rent go back to shareholders via dividends, the incentive to invest will only grow larger with time.
And as the company continues to establish itself as the preeminent REIT for an emerging market in need of real estate solutions, there is no reason businesses won’t continue to flock to it like PharmaCann did this year. Time will only tell which companies will begin partnerships with Innovative Industrial in 2019.
With such a strong track record and promising outlook, investors should consider Innovative Industrial a winning asset in any cannabis portfolio.
Thanks for being an important part of the National Institute for Cannabis Investors,
Executive Director, National Institute for Cannabis Investors
P.S. One of the most exciting aspects of the future $24.5 billion market is there will be a flurry of marijuana IPOs. Our estimates show each of these companies is capable of generating between $500 million and $3 billion for investors when they go public. That’s a potential $12 billion in new wealth in a matter of weeks. And today, we want to show at least 2,000 average investors living in the United States how to become millionaires from this little-understood investing phenomenon. Just click here to learn more.
21 responses to “Your Free Cannabis Pick Has Been a Port in Storm”
December 11 2018