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3 Reasons Why IIPR Will Outperform Marijuana Stocks in 2020

3 Reasons Why IIPR Will Outperform Marijuana Stocks in 2020Throughout much of 2020, marijuana stocks have been under substantial pressure amid market volatility and the COVID-19 pandemic. However, Canadian-based REIT, Innovative Industrial Properties (IIPR) continues to outperform as the marijuana stock surged over 19% between March and June 2020. Why will IIPR continue to outperform marijuana stocks in 2020?

1. IIPR’s long-term acquisition strategy fuels robust growth

3 Reasons Why IIPR Will Outperform Marijuana Stocks in 2020

One of the biggest catalysts for the growth of IIPR is its long-term acquisition strategy. The cannabis stock started with 11 properties in 2019 and has nearly doubled its portfolio with 19 additional acquisitions. IIPR even raised additional equity capital in May and avoided debt to fund its acquisition. Convinced about such a safe upside for this marijuana stock, its shareholders aren’t too skeptical about dilution anymore. Currently, IIPR has 58 properties and nearly 4.4 million square feet of leasable space.

2. A unique business model and solid financials boosts IIPR

3 Reasons Why IIPR Will Outperform Marijuana Stocks in 2020

The business model of IIPR is unique and strong. It purchases properties from leading cannabis companies and leases it back to them. Its growth strategy is to build a formidable base of high-end tenants who can pay lease and ensure a steady stream of long-term revenue. IIPR even has a rent-deferral policy in place for the tenants who find it difficult to pay lease amid the pandemic.

In the first quarter, the IIPR saw a YoY (year-on-year) revenue surge of over 200% to $21.13 million. Meanwhile, the net income also witnessed a massive growth to $11.53 million in Q1 fiscal 2020 against $3.3 million in the same period last year. The company’s operating cash flow for Q1 multiplied nearly 5x to stand at $19.57 million, indicating its cash strength.

3. IIPR: Consistently high dividend payout

3 Reasons Why IIPR Will Outperform Marijuana Stocks in 2020

IIPR also recorded a better-than-estimated fund from operations, which is a crucial metric for REITs. This helped the marijuana stock to declare impressive dividend pay-outs. In the second quarter, IIPR announced a dividend of $1.00 per share indicating a near 77% increase from Q2 2019.

With the level of earnings growth that the marijuana stock demonstrated in Q1, the dividends will only increase. This makes the pot-based REIT an attractive bet for both income-investors and growth investors.

Bottom Line: IIPR likely to continue to outperform marijuana stocks in 2020

With ever-increasing public support for marijuana legalization, we anticipate new ballot initiatives for statewide legalization in 2020 and beyond. This factor alone could single-handedly propel IIPR stock to new heights. Aside from this, the marijuana stock has a well-formulated business strategy in place in order to maintain its long-term growth.

This coupled with the strong financials of IIPR makes it one of the most lucrative marijuana stocks in the market now. With 25% gains amidst market volatility, we expect the momentum to continue and IIPR to outperform its pot industry peers.

3 Reasons Why IIPR Will Outperform Marijuana Stocks in 2020


About Cannin: Your Marijuana Stocks Resource

About Cannin: Your Marijuana Stocks ResourceCannin is your trusted resource for marijuana stocks. Our global team of experts evaluates all emerging marijuana and hemp stock investing opportunities. We provide tips on the best marijuana and hemp stock investments for 2020. 

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