This early mover earns three times the profit by renting to some of the biggest players in American cannabis…
Shares of Innovative Industrial Properties Inc. (NYSE: IIPR), the only dividend-paying cannabis company, have taken a beating from its high of $137.62 on July 11th.
From that peak, the stock price began its decline when Innovative Industrial announced it would offer more shares to the public at a price of $126 per share.
The selling continued when IIPR increased the offering the next day and the price finally bottomed out at $102.98 last Tuesday.
The decline in price was a typical reaction to new shares hitting the market, but it’s often nothing to panic about. Events like offering more shares provide liquidity, which is an opportunity for early investors with significant gains to take profits.
And the demand for the new shares issued was high. All shares originally offered, plus additional shares that could only be issued provided demand was high, were sold.
Despite the selloff, the stock is still up about 169% from the time we first mentioned it to Cannabis Profits Daily readers back in October.
And given how much the company will make investing the cash it just raised, even the investors that just bought in at $126 will make a killing…
Earning Three Times as Much
As you may know from our free guide, Innovative Industrial Properties is a real estate investment trust, or REIT, focused entirely on investing in properties dedicated to medical cannabis. The company buys industrial-use buildings that cannabis companies can use for cultivation or extraction.
It then leases the building to a cannabis company for periods averaging between 10 to 15 years.
The rents the company can charge are fantastic – about two to three times higher than traditional real estate companies – and it’s the long-term, high income that investors in the company can earn that creates so much demand for IIPR stock.
For a time, the company was slow to invest its cash. But it has picked up the pace, investing about $160 million over the last three months. And, despite this increased willingness to deploy cash, it can still manage to find properties for which it can charge such high rents.
So the $188.4 million it raised in this most recent offering will soon find its way into profitable investments, especially when it brings on big tenants like it did in its latest real estate deal.
A Sign of Big Deals to Come
The deal is structured as follows:
Innovative Industrial bought a property in Massachusetts for $3.5 million, which it will lease to Trulieve. Trulieve intends to spend up to $40 million making improvements to the property, and Innovative Industrial will then reimburse Trulieve. That brings Innovative Industrial’s total investment in the property to $43.5 million.
Trulieve will begin paying $4.7 million in rent to Innovative Industrial per year to start. The annual rent will then escalate from there for a period of ten years.
And large, successful tenants entering into long-term agreements at high rental rates creates the perfect conditions for the next cannabis investment wave.
One landmark event changed the hemp CBD market forever. Sales in this sector are predicted to jump over 3,000% in the next 36 months alone. To learn more, go here.
Positioned to Ride the Wave
At least 16 state pension funds now own stakes in Innovative Industrial stock.
I’m talking big institutions like California State Teachers’ Retirement System with $237 billion in investments. Or the New York State Common Retirement Fund, the third-largest pension fund in the U.S., with $210 billion in pension assets.
These investors are looking for any way they can to own cannabis stocks, but the still murky legal landscape for cannabis at the federal level is holding them back.
By only owning the real estate, and not growing or processing cannabis directly, Innovative Industrial is one step removed from any perceived legal troubles. That makes big institutional investors feel safer making an investment.
But these investors won’t stay on the sidelines long. Revenues to cannabis companies could grow at 80% per year. And the investment professionals directing hundreds of billions in investments at these institutions don’t want to miss out on the soaring prices for cannabis stocks that will result from such unprecedented growth.
It’s this reluctance, or inability, by big institutions to move into cannabis now that creates such a rare opportunity for investors like you today.
For the first time ever, you can invest in a new, high-growth industry first, instead of picking up the scraps much later. You can establish your positions and then, when institutional investors move in to cannabis stocks in a big way, you can be the one selling your stake to them at much higher prices, instead of the other way around.
But you can’t wait forever.
Executive Director, National Institute for Cannabis Investors
P.S. Cannabis is closer to federal legalization than ever… and smart investors know that the market will explode once this happens. Our experts have identified four stocks that are currently trading under $3 that could see up to 1,000% gains when this occurs. Go here for more information.
6 responses to “16 Pension Plans Back Cannabis Real Estate Baron”
July 30 2019