Innovative Industrial Properties, Inc. Targets Medical-Use Cannabis Facilities for Acquisition

10:58 05/14/2018

Innovative Industrial Properties IIPR  is a REIT that manages free-standing properties for growing licensed medical-use cannabis. These facilities are operated by state licensed growers. It has buildings in New York, Maryland, Minnesota and just acquired a site in Arizona which has a long-term lease. Earnings are expected to be $0.19 in 2017 and $1.32 in 2018. It has paid out a distribution in 2017. Shares are up 44% since the Jan 17, 2017 podcast.

According to a recent report published by Forbes, Brightfield Group projects that the global cannabis market was worth $7.7 billion in the end of 2017, and is projected to reach $31.4 billion by 2021. The United States accounts for about 90 percent of the whole market. But the U.S. domination of the market is likely to decrease to approximately 57 percent due to legalization of cannabis products in other nations. Canada is considered as one of the largest markets for cannabis products and plans to legalize recreational cannabis later this year. Recently this year, California voted in favor of recreational cannabis laws, which were officially implemented on January 1st, 2018.

"California gets the media attention and Canada gets the investment dollars as they allow adult use, but Germany's move to make cannabis flower available for medical use in pharmacies was really the big news of 2017 from a worldwide perspective" said Tom Adams, Editor-in-Chief at Arcview Market Research and Principal Analyst at BDS Analytics. "The tables have turned in favor of legalization across the world and we predict that the trend will spread as research continues to support cannabis' effectiveness as a medication."

Innovative Industrial Properties, Inc. IIPR  targets medical-use cannabis facilities for acquisition, including sale-leaseback transactions, with tenants that are licensed growers under long-term, triple-net leases. On December 18, 2017, the company announced that it closed on the previously announced acquisition of the property located at 5900 West Greenhouse Drive in Willcox, Arizona, which comprises approximately 358,000 square feet of greenhouse and industrial space.

Concurrent with the closing of the purchase, Innovative Industrial Properties, Inc. (NYSE:IIPR) entered into a long-term, triple-net lease agreement with a subsidiary of The Pharm, which intends to continue to operate the property as a medical-use cannabis cultivation and processing facility in accordance with Arizona medical-use cannabis regulations.  The Pharm is one of the largest wholesalers of medical-use cannabis in the state of Arizona.

This article has been provided by a Chasing Markets contributor. All content submitted by this author represent their personal opinions, and should be considered as such for entertainment purpose only. All opinions expressed are those of the writer, and may not necessarily represent fact, opinions, or bias of Chasing Markets.
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