Gain Exposure to Real Estate and Cannabis With This One Stock That Yields 7.7%
Real estate and cannabis are hot topics with investors in 2024.
Real estate stands out as a solid investment due to its historical resilience, potential for long-term appreciation, and the ability to generate consistent rental income. Cannabis, on the other hand, is more exciting, offering the opportunity to invest in a rapidly expanding legal market with increasing social acceptance and the potential for significant growth in various sectors, including medicinal and recreational use.
While some stocks offer you the opportunity to invest in multiple industries, very few offer the opportunity to invest in both real estate and cannabis. One of the most popular stocks that offers just this is Innovative Industrial Properties Inc. (NYSE:IIPR), a real estate investment trust (REIT) that acquires, owns, and manages specialized properties leased to cannabis companies. Its portfolio currently consists of 108 properties across 19 U.S. states, including both industrial and retail properties.
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Innovative Industrial Properties counts some of the largest and most popular cannabis companies as its tenants, including Trulieve, Curaleaf, and Cresco Labs. In total, it has 30 tenants, with the top 10 accounting for 76.4% of its annualized based rent.
The risk of investing in the landlord of cannabis operators is significantly lower, while the reward could be more limited. However, Innovative Industrial Properties also comes with a great dividend. It currently pays a quarterly dividend of $1.82 per share, equating to an annualized dividend of $7.28 per share, which gives its stock a yield of about 7.7% at the time of this writing.
Furthermore, Innovative Industrial Properties has raised its annual dividend each year since its initial public offering in 2016, putting it on track for 2024 to mark the eighth consecutive year with an increase.
For those interested in gaining exposure to both real estate and cannabis, Innovative Industrial Properties could be exactly what you're looking for.
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Image Credit: Cannabis farm via Dall.E
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