A California-based investment trust is leading the way
A California-based real estate investment trust (REIT) is hoping to give its clients something that is currently in doubt – a real, tangible pension. The fund has been receiving a lot of support by pension funds – over 12 so far – and is using the investment money in a very lucrative market with a tremendous long-term upside. The REIT is turning to the cannabis industry in order to offer better returns to its participants.
Since it launched, Innovative Industrial Properties (IIP) has gained at least 16 state pension funds in the US, as well as one in Canada. The San Diego-based REIT, which represents public pension funds for government employees, has billions of dollars invested in the marijuana industry
Among some of those pension funds that have turned to IIP are the California State Teachers Retirement System, the New York State Common Retirement Fund and the Texas Permanent School Fund. There are also funds from Louisiana and Tennessee, the latter of which has a governor who has been adamantly opposed to all forms of marijuana legalization.
According to equity research analyst Craig Behnke, “Pension funds typically invest with a long-term horizon and are viewed by many companies as ‘sticky money’ that doesn’t move in and out of stocks frequently. A rising investment appetite from investors with long-term outlooks could have positive benefits such as serving to de-risk early stage cannabis investing through more stable and consistent exit opportunities.”
Marijuana investments may seem a little more speculative than others, but all analysts have agreed on one point. As far as long-term investments are concerned, few have the growth potential of marijuana stocks. The industry is expected to explode within five to ten years and many stocks are forecast to be worth 1500 times more than their current levels.