Please ensure Javascript is enabled for purposes of website accessibility

Marijuana REIT Innovative Industrial Properties Doubles Revenue, Profitability in Q1

By Eric Volkman - May 7, 2021 at 8:34AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

A fattening portfolio continues to drive the financials higher.

In its first quarter, Innovative Industrial Properties (IIPR 0.44%) not only convincingly beat analyst estimates, it also managed to more than double several key financial line items.

For the quarter, the company -- which is currently the only specialty marijuana-property real estate investment trust (REIT) on the stock market -- took in nearly $42.9 million in revenue. That was a 103% improvement over the prior-year quarter.

Net income and adjusted funds from operations (AFFO, widely considered to be a more accurate gauge of profitability for REITs) followed a similar trajectory. The former landed at nearly $25.6 million, well more than double the $11.5 million of last year's first quarter. The latter was $38.4 million, or $1.47 per share, from the year-ago quarter's $17.8 million.

Cannabis flower in a bowl on top of U.S. currency.

Image source: Getty Images.

According to Zacks, the average analyst estimate for AFFO was $1.42 per share. The company's $42.9 million in revenue edged past the collective prognosticator projection by nearly 4%.

Like any good REIT, Innovative has been busy adding to its highly specialized portfolio of properties. During the quarter, it acquired eight new ones, five of which are in states that have legalized the sale and consumption of recreational marijuana (a far larger market than the necessarily limited medical segment). One facility is in New York, where the ink is barely dry on that state's legalization law.

One great advantage Innovative has over many other REITs is that it frequently enters sale-leaseback deals for existing real estate that has already been developed. Cannabis companies are often short of cash, so selling their buildings to the REIT, then renting them from the new owner, is an elegant way to raise piles of capital quickly.


Eric Volkman has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Innovative Industrial Properties. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Innovative Industrial Properties Stock Quote
Innovative Industrial Properties
$102.13 (0.44%) $0.45

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/20/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.