Two cannabis-focused real estate investment trusts continue to deliver for investors
For many in the cannabis industry, REIT (Real Estate Investment Trust) is not a common acronym. However, as cannabis companies look for ways to access additional capital, REITs are popping up in more and more conversations. The investment ecosystem has been enhanced by the current performance of some of them.
Generally, a REIT is a corporation that provides several tax advantages, including the ability to deduct dividends from taxable income. The past few years have seen a great deal of success among REITs in the industry, which is a clear mirror of how marijuana stocks have sufficient capacity to grow.
Innovative Industrial Properties is, without a doubt, one of the most important REITs in the marijuana industry. Its business is essentially focused on SU’s legal cannabis market with a total of 7.7 million square feet of leasable space available to the corporation today.
The structures, which may expand to over 10 million square feet in the future, are fully leased, with an average lease term of 16.4 years. With a presence in nearly 20 states, the company has lengthened its footprint with a total of 11 properties. As it continues to purchase properties, the company assures that its leasing portfolio will expand significantly by 2022.
On the other side is AFC Gamma, a well-known cannabis ancillary business. This company not only has efficient business practices but also has a solid cash flow. Two years old, the business focuses on supply and demand fundamentals, supply and demand locations, and real estate security and other collateral.
Among the company’s most notable recent business initiatives is its focus on the cannabis market, which continues to grow at an accelerated rate. The company approved a $250 million credit enhancement with Verano Holdings Corp. as well as a $100 million option.