Innovative Industrial Properties (IIPR) has started off 2020 with another capital raise as they look to continue to grow their already impressive portfolio of cannabis-related real estate.
The company announced last week that it will be floating an issue of 2,967,799 shares in a public offering. These shares are being sold at a price of $73.25 per share, in an issue that should close on or about Jan. 28. This gives Innovative Industrial Properties approximately $217 million for further expansion.
Since this news was released, the stock has taken flight once again rising this week to over $90 per share.
Even at the current price Innovative Industrial Properties is yielding over 4% in terms of their dividend. This is an extremely impressive yield considering the sector they are in.
The market has also been pleased with their earnings growth. Innovative Industrial Properties’s EPS grew dramatically from $0.61 to $1.47, over the last year. That’s a 141% year-on-year earnings growth.
This week Innovative Industrial Properties wasted no time with their new capital and put a portion of it to work by acquiring a 50,000 square foot industrial facility in Ohio from Cresco Labs. The company paid approximately $10.6 million in total for the property, which excluded transaction costs.
Innovative Industrial Properties also entered into a long-term, triple-net lease agreement for the property with a wholly-owned subsidiary of Cresco Labs. Cresco Labs plans to continue to operate the property as a regulated cannabis cultivation and processing facility. Cresco Labs should complete additional tenant improvements for the property. Innovative Industrial Properties has agreed to provide reimbursement of up to approximately $1.9 million for the improvements. Including the improvements, this will bring the total investment to approximately $12.5 million.
Paul Smithers, President and Chief Executive Officer of Innovative Industrial Properties had some very positive remarks regarding their new acquisition, “We are excited to expand our real estate partnership with Cresco and its strong management team. Cresco continues to execute well on its business plan and has created a truly nationwide reach in its operations, benefiting patients and consumers across the United States, while creating jobs and contributing meaningfully to the local communities where they operate.”
He also added that,”We are thrilled to partner with them again in Ohio, a state that we believe represents a tremendous market opportunity, where Cresco can bring its high quality, trusted products to patients in need.”
As Innovative Industrial Properties continues its expansion throughout the United States, their investors should benefit. Many cannabis companies are in need of Innovative Industrial Properties for financing and will be for the foreseeable future.
IIPR shares were trading at $92.25 per share on Wednesday morning, down $0.15 (-0.16%). Year-to-date, IIPR has gained 21.59%, versus a 1.72% rise in the benchmark S&P 500 index during the same period.
About the Author: Aaron Missere
Aaron is an experienced investor who is also the CEO of Departures Capital. His primary focus is on the cannabis industry. He also hosts a weekly show on YouTube about marijuana stocks. Learn more about Aaron’s background, along with links to his most recent articles. More...
