With some of the biggest marijuana stocks currently battening down the hatches under downward pressure, investors are looking further afield for other unique cannabis-related stock plays. How about one that offers a per-share dividend?
In a recent Zacks segment, Terry Ruffolo and Ryan McQueeney spoke about the potential of Innovative Industrial Properties Inc. (IIPR) a real estate investment trust company with ties to the marijuana industry.
“The difference between IIPR and some of these pure play stocks that we’re talking about … is that IIPR is a U.S. company … many of the names that get kicked around on the investment forums these days are Canadian producers of marijuana – IIPR is still, to me, a pure play in the cannabis industry.”
Describing how IIPR uses its ten existing properties to help with production and cultivation in states where medical marijuana is legal, McQueeney dug into the details of how this dividend-paying cannabis stock works.
“It’s a little bit of a different model, but one that, to me, makes sense,” McQueeney says, hedging smartly instead of choosing to make broad absolute statements. “You’re getting a clearly defined market – they’re ready to move into these states as they individually legalize medical marijuana.”
McQueeney suggested that with $3.9 million in revenue up 50% year-over-year, IIPR is starting to, in his words, “pick up the pace.”
He also noted the lack of long-term debt for the company.
“That’s the type of financial positioning that’s going to allow (the company) to snap its fingers and move into the states one by one,” McQueeney said, speaking about how IIPR is shielded from higher interest rates, and about some of its attractiveness to investors.
As an REIT, he said, it’s legally obligated to pay out a certain value to shareholders, and a $0.35 per share dividend history is part of that.
McQueeney called IIPR a “growth play” in the cannabis-related sector.
“It’s obviously a unique opportunity,” he said.
With that in mind, if you’re looking for a cannabis play that offers not only value yield but a per-share dividend, this is one option to put on the radar.
As of this market session, IIPR is has doubled its price within a year, and hovers around $50 per share after spiking at $51.47 this morning.