Why we’re buying this Ancillary Marijuana Stock (and why you should too)
Huge upside for this marijuana stock
Marijuana stocks have taken a beating recently due to the COVID-19 crisis but the issues are more systemic than the virus. Overvaluation and long-term operating viability on top of the COVID-19 crisis are the main contributing factors to this sector-wide downturn. Bright-eyed marijuana stock investors were initially attracted to the sector because of its risk/reward allure. Many have since dumped most or all of their marijuana stocks altogether.
Companies like Liberty Health Sciences, Tilray, and Aurora Cannabis, are among many marijuana stocks which are now down 50-90% in value over the past twelve months. The same goes for many cannabis ETFs which represent the overall condition of the entire sector.
Unlike other more-popular marijuana stocks like Canopy Growth Corp.and Aphria, Inc., Innovative Industrial Properties (IIPR) doesn’t deal with cannabis directly. It instead collects income from cannabis operators who lease their properties in order to cultivate, produce, and distribute cannabis.
However, the long term outlook for marijuana stocks and hemp stocks remains just as bright as their LED grow lights. And the long-term outlook for Innovative Industrial Properties remains as promising as ever. In fact, we just released our comprehensive fundamental analysis of IIPR and we’re excited to share some highlights.
Why are we buying this Ancillary Marijuana Stock?
Our analysts believe that Innovative Industrial Properties is the perfect parallel marijuana stock investment for 2020 for 3 main reasons.
1. Dividends, baby
Since Innovative Industrial Properties is a Real Estate Investment Trust (REIT), it’s required to distribute a majority of its taxable income to shareholders in the form of dividends. This particular dividend pays over 5%. In fact, Innovative Industrial Properties has grown its dividend by over 550% since 2017. Coupled with IIPR’s ambitious growth strategy, these dividends make this stock incredibly attractive.
2. Growing, growing, gone!
If IIPR’s impressive track record isn’t attractive enough, consider their growth prospects – which are some of the most substantial in the marijuana industry. In fact, IIPR posted an astounding 269% YoY revenue growth in its last quarter with 4x profits than the previous year’s quarter. The two most recent acquisitions Michigan and Massachusetts in April have us thinking that this momentum will continue to grow. IIPR now owns 54 marijuana facilities in 15 US states. With the inevitability of national legalization, new opportunities will continue to present themselves.
3. Picks and Shovels, Like Levi Strauss
Much like Levi Strauss during the gold rush, IIPR supplies the “picks and shovels” companies need to capitalize on this green rush by supplying the necessary infrastructure. It has a direct tie to the cannabis sector through the leases that it offers for its industrial properties. Innovative Industrial Properties will almost always generate the same amount of revenue from its lease agreement and it won’t fluctuate with the demands of the cannabis market. In short, the company is insulated from the volatility of the cannabis market and instead is secured by the cannabis company operators that enter into lease agreements with Innovative Industrial Properties.
Why do we recommend Innovative Industrial Properties as a strong cannabis stock for 2020?
In the end, the company is a cannabis company, however, Innovative Industrial Properties does not handle the cannabis itself – its tenants are direct cannabis operators. An investment in Innovative Industrial Properties marijuana stock could be considered as the perfect parallel marijuana stock investment as the company’s performance is based on the income generated from leases and is not solely dependent on the cannabis market.
Bottom Line
For these reasons, we believe that investing in Innovative Industrial Properties marijuana stock at or close to its current price of $77/share is a good marijuana stock investment opportunity for 2020. The company isn’t dependent on the price of marijuana, or even the demand for marijuana (which continues to break records due to COVID quarantine measures), as it solely focuses on real estate ownership and generating revenue by leasing access to its properties.
Why we’re buying this Ancillary Marijuana Stock (and why you should too)
About Cannin: Cannabis and Hemp Investment Experts
Market analysts expect the marijuana and hemp industry will have an annual value exceeding $75 Billion in the next decade. The time to invest in marijuana and hemp stocks is now. Are you looking to buy stock in hemp companies or cannabis companies? Interested in emerging penny marijuana stock companies? Looking for the best Canadian marijuana company to invest in?
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