Replies to post #113 on Innovative Industrial Properties Inc (IIPR)

[SBZRUS]

You guys are clearly underestimating the demand for the products that these properties will produce. The folks lucky enough to obtain licenses will need a place to grow. They don't allow grow facilities of scale just anywhere... Renters will come. Target $24. IMO.

[Monksdream]

The costs to sell even one gram of legal cannabis aren't necessarily prohibitive, but it's enough to prevent OTC companies from operating in this space.

For example. This is a list of requirements for a medical cannabis license in the state of Illinois.

 
Projected start-up costs
 
Dispensary fees:
Non-refundable application fee for a dispensary permit: $5,000
Once issued a permit, $30,000 permit fee for the first year
Annual permit renewal: $100,000
Applicants were required to demonstrate $400,000 in liquid assets and $50,000 in escrow
 
Cultivation fees:
Non-refundable application fee for a cultivation permit: $25,000
Once issued a permit, $200,000 permit fee for the first year
Annual permit renewal: $100,000
Applicants were required to demonstrate $500,000 in liquid assets and a $2,000,000 bond to the Department of Agriculture

[Monksdream]

Making a fair value assessment of a public traded REIT is not as easy as it appears.









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What is a 'Real Estate Investment Trust - REIT'
A REIT is a type of security that invests in real estate through property or mortgages and often trades on major exchanges like a stock. REITs provide investors with an extremely liquid stake in real estate. They receive special tax considerations and typically offer high dividend yields.
BREAKING DOWN 'Real Estate Investment Trust - REIT'
REITs, an investment vehicle for real estate that is comparable to a mutual fund, allowing both small and large investors to acquire ownership in real estate ventures, own and in some cases operate commercial properties such as apartment complexes, hospitals, office buildings, timber land, warehouses, hotels and shopping malls.
All REITs must have at least 100 shareholders, no five of whom can hold more than 50% of shares between them. At least 75% of a REIT's assets must be invested in real estate, cash or U.S. Treasurys; 75% of gross income must be derived from real estate.
REITs are required by law to maintain dividend payout ratios of at least 90%, making them a favorite for income-seeking investors. REITs can deduct these dividends and avoid most or all tax liabilities, though investors still pay income tax on the payouts they receive. Many REITs have dividend reinvestment plans (DRIPs?), allowing returns to compound over time.