Innovative Industrial Properties Is Down In Price But Surely Not Out

Although Innovative Industrial Properties, Inc. (NYSE: IIPR) was a top performing cannabis stock in 2021, the recent trend has been challenged. 2022 has already proved to be a rocky period for the company and we want to provide an update on the business.

During the last quarter, the cannabis real estate investment trust (REIT) has announced several large transactions with high-profile United States (US) multi-state operators (MSOs). We attribute some of the recent weakness to rising interest rates and excluding the SAFE Banking Act from the National Defense Authorization Act (NDAA).

During the last week, two broker-dealers announced new price targets on Innovative Industrial Properties and this is a trend to be aware of. The two changes were from:

Compass Point lowered the price target to $275 from $300
Piper Sandler lowered the price target to $285 from $290

The lower price targets were reported approx. one month after Innovative Industrial Properties raised the quarterly dividend to $1.50 per share. We are favorable on how the cannabis REIT has been steadily raising the size of the dividend and will monitor how the trend continues in future quarters.

Although many cannabis stocks sold off after the SAFE Banking Act was not including in the NDAA, we believe Innovative Industrial Properties will benefit from this. The longer it takes for cannabis legislation to be passed at the Federal level, the longer it will take for other REITs to enter the cannabis sector.

Drops More Than 25% From its All-Time High

Innovative Industrial Properties has been the clear leader in the cannabis real estate market and we are impressed with how the management team has increased the size of the portfolio of assets it owns. The company has proven that it can tap the capital markets when it needs to raise money to make additional acquisitions and we find this to be a key aspect of the story.

In November, Innovative Industrial Properties traded at all-time high and the stock has fallen more than 25% from these levels. We have been surprised by the size of the pullback and will continue to closely monitor the cannabis REIT.

If you are interested in learning more about Innovative Industrial Properties, please send an email to support@technical420.com with the subject “Innovative Industrial Properties” to be added to our distribution list.

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