This cannabis stock is a smart buy this year

322 0

Innovative Industrial Properties continues to reward investors as it grows

While it is true that volatile markets are not very attractive to some investors, large companies that manage to remain stable can continue to line the pockets of long-term investors. Recession remains a constant in the minds of investors, but resilient companies with enduring streaks have been able to overcome those headwinds. The cannabis industry continues to show up and down behavior, but there are still companies capable of delivering high dividends.

Innovative Industrial Properties (IIP) is one of them, and its approach to the cannabis sector seems to be quite positive so far. Investors not afraid of risk can find cannabis companies with a track record of profitability and a solid growth path. There is no doubt that IIP is on that list.

The impact of the volatile and uncertain macroeconomic environment, slowing sales and profits, haphazard state legislation, and an uncertain agenda on federal reform have been contributing factors to the industry’s volatility. However, IIP has been able to swim against the tide and has largely bucked these trends.

IIP is considered a cannabis ancillary action; that is, it does not have a direct relationship to the cultivation or sale of cannabis. The firm operates as a real estate investment trust (REIT) and leases its portfolio of properties to state-licensed medical cannabis cultivators. This type of operation has allowed it to stay on its feet even when the sector is going through some difficulties.

Its relationship with clients is based on long-term triple net leases. The company has a total portfolio of 110 properties in 19 states, with 100% of its operating portfolio (108 properties) under lease. This has provided solid earnings over the years.