With the return of its shares crashing by 63% so far this year, Innovative Industrial Properties (IIPR 1.64%) isn't exactly proving to be a safe harbor from the market's recent craziness. Recently, the largest cannabis real estate investment trust (REIT) has been plagued by a tenant defaulting, not to mention a market drawdown and endemic pessimism regarding marijuana stocks.

And all that trouble is precisely why making an investment in it could boost your chances of retiring ahead of time. Let's evaluate why Innovative Industrial's stock is so dented in the first place so that you can judge whether its future prospects are bright enough to justify a purchase.

The beatdown might continue

Even monster growth businesses get unlucky sometimes and identifying when to make a long-term investment in a company experiencing short-term difficulties is an important trick to help with retiring early. On that note, on July 13, Innovative Industrial reported that one of its tenants, Kings Garden, had defaulted on its lease. Defaults happen sometimes, and Kings Garden was worth around 8% of IIP's revenue, so it's understandable why its stock got bruised.

What's more, management didn't appear to discuss its ongoing attempts to either get Kings Garden to pay up or to find another tenant in the company's August 3 earnings report. That's bound to keep investors jittery as the company could have a hard time finding a new tenant willing to pay as much for its cannabis cultivation space as Kings Garden did.

The likely reason (from management's perspective) there wasn't as much of an issue with the tenant in default is that IIP doesn't build most of its properties directly; it buys them via sale-leasebacks, so it can set more attractive terms. Notably, it'll be able to keep doing that with its future acquisitions, so the detrimental impact of the default should be washed out of its top line relatively quickly, even if it struggles to find a replacement tenant.

Beyond the default, the REIT joins pretty much everything else in the cannabis industry in performing poorly this year, with the return of the industry-tracking AdvisorShares Pure U.S. Cannabis ETF falling by more than 50% against the market's decline of around 12%.

This is a juicy chance to pick up some passive income

One major point in favor of making an investment is that IIP is continuing to grow at a steady clip, in spite of the Kings Garden default. In the second quarter, its total revenue grew by 44% year over year, arriving at $70.5 million. The company also acquired four new holdings while adjusting the leases of five of its existing tenants, making a total of $239.4 million in investments. Those investments will soon yield additional cash flows to keep the REIT's top line expanding, which should enable it to keep hiking its dividend in return.

That's key as the biggest part of this stock's appeal is its dividend growth. Through a consistent schedule of hikes, its payout has grown by 124.4% over the last three years. Right now, its forward dividend yield is above 7.2%, which is quite high compared to the average of roughly 3.8% for REITs and the market's average near 1.7%.

If you were to invest $5,000 into the company at its present yield and all further dividend hikes stop -- an unlikely but possible occurrence -- you'd be making $360 per year with zero further effort. Then, if you reinvested your yearly payments to buy more shares via a dividend reinvestment plan, you'd start to compound your wealth quite quickly, especially if IIP opts to continue hiking its dividend at close to its recent (rapid) pace.

Finally, the big picture for the cannabis market is likely to perk up soon enough, and that'll carry IIP upward. Compared to 2021's sales of $24 billion, regulated cannabis sales in the U.S. are anticipated to reach $46 billion by 2026 (per BDSA Legal Cannabis Forecast), meaning they'll nearly double over the next four years. That'll be a massive driver of cannabis companies needing financing from IIP, even if marijuana legalization occurs at the federal level between now and then.