Innovative Industrial Properties (NYSE: IIPR) is a rarity in the marijuana industry. At a time when many cannabis companies are struggling to make a profit, IIP is using a highly lucrative real estate strategy to deliver handsome gains to its investors.
IIP is structured as a real estate investment trust (REIT). It acquires facilities that can be used to produce medical marijuana and leases them to state-licensed growers. It’s a relatively simple and repeatable business model — one that IIP is successfully using to build a thriving empire of cash-generating properties.
Innovative Industrial Properties is the cannabis stock you’re searching for. Image source: Getty Images.
As a REIT, IIP passes nearly all of its cash flows on to its shareholders via a fast-growing dividend. Since the second quarter of 2017, it increased its quarterly cash payout from $0.15 per share to $1.24. Unsurprisingly, IIP’s stock price soared during this time.
IIPR data by YCharts
With more states moving to legalize marijuana, IIP has plenty of room for expansion still ahead. As it continues to serve as an important real estate partner for a U.S. cannabis industry that could generate $200 billion in annual sales by 2030, according to investment bank Stifel, IIP is poised to become a much larger company over the next decade.
So, if you’re looking for a way to add a cannabis-fueled growth element to your investment portfolio, buying shares in Innovative Industrial Properties could be a great way to do so.
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Joe Tenebruso has no position in any of the stocks mentioned. The Fintech Zoom owns shares of and recommends Innovative Industrial Properties. The Fintech Zoom has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.