Innovative Industrial Properties Inc (IIPR)

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Article From 12/27/16 - Why Innovative Industrial Properties (NYSE:IIPR) Is Still An Attractive Weed Stock

https://bnlfinance.com/2016/12/27/innovative-industrial-properties-nyseiipr-still-attractive-weed-stock/

Innovative Industrial Properties (NYSE:IIPR) is a stock I brought up on chat and wrote an article about before it went public. It is the first Specialty REIT that has went public with regards to the growing demand for both medical and recreational marijuana. However, like a lot of IPO’s it did not go public on the date it was originally designated to do so.

I have kept an eye on it and since my first article. It went public on 12-1-2016. So far Innovative Industrial Properties (NYSE:IIPR) has went down to $14.50 and as high as $20.52. IIPR stock currently sits at $18.55.

What I like about IIPR
Innovative Industrial Properties targets medical-use marijuana facilities for acquisitions. This includes sale-leaseback deals with tenants that are licensed growers under long-term triple-net leases. They are the first to do so that I know of and that gives them a possible edge in this market. When I say this market, I mean one of the fastest growing markets in the world. This industry is poised for significant growth in coming years, the marijuana industry.

As of November 15, 2016, 29 states and the District of Columbia allow their citizens to use medical marijuana, an estimated population of 203.3 million. Other States are on the ballot in the next 2 years. A recent poll by Harris found that 81% of Americans support legalization of marijuana for medical use.

What size of market are we talking about?


If the federal government doesn’t try and stop this train that’s already left the station, then it’s huge. According to The ArcView Group, nationwide sales of legal marijuana grew to $5.4 billion up from $4.6 billion in 2014. Of the $4.6 billion in estimated sales in 2014, approximately 92% of such sales consisted of medical-use sales. By 2020, legal market sales are expected to grow to an estimated $22.8 billion. Medical marijuana is estimated to have sales of approximately $10.2 billion. These are conservative estimates in my opinion.

About Innovative Industrial Properties
Innovative Industrial Properties, Inc. is a self-advised Maryland corporation focused on the acquisition, ownership and management of specialized industrial properties leased to experienced, state-licensed operators for their regulated medical-use marijuana facilities. Innovative Industrial Properties elects to be taxed as a real estate investment trust.

IIPR acquire specialized industrial real estate assets that are used for growing medical-use marijuana and operated by state-licensed growers. Just recently on Dec. 19 2016 IIPR closed on a deal worth noting. They announced sale-leaseback transaction with PharmaCann LLC (“PharmaCann”), acquiring PharmaCann’s newly-constructed 127,000 square foot medical-use marijuana cultivation and processing facility in New York.

Why this is a significant update
New York has nearly 20 million residents. The New York Department of Health has taken significant steps recently to expand access to medical-use marijuana for patients needing treatment. It announced that it plans to add chronic pain to its list of qualifying conditions for treatment, and to allow licensed medical-use marijuana providers to wholesale their products to other licensed providers in the state.

According to the Department of Health, there are nearly 19,000 nurse practitioners and more than 11,000 physician assistants licensed to practice in New York. They are already licensed to prescribe marijuana for many conditions including chronic pain. This is just in New York, keep in mind IL, CA, OR, WA, CO, etc etc. These states among others are doing the same.

With the epidemic of opioid based medication, is marijuana an alternative?
The answer is absolutely yes in my opinion. New studies are being released all the time that support this. The biggest question is how to invest in this market that is growing so fast. Especially, since the Federal Government still refuses to take marijuana, cannabis, pot or weed, whatever you want to call it off its schedule 1 class of drugs. Same class that Cocaine and Heroin are listed as. But as more and more States pass it on their own, the Federal Government will have to act.

What is the push back to keep it illegal you might ask? Follow the money, who gains by keeping it a class 1 drug. Pharmaceutical companies, Private Prisons and DEA to name a few along with moral objections from some people.