As an increasing number of Americans look to cannabis as key in the Covid-19 economic crisis, the industry’s leading real estate investment trust continues to pull ahead.
On Wednesday, Innovative Industrial Properties (NYSE: IIPR) posted strong growth across the board in its quarterly earnings report.
The already strong stock traded up 1 per cent before markets closed to US$107.50, and continued to climb in after-hours trading. IIPR’s share price has climbed almost 38 per cent since its last earnings report in May.
The company paid a dividend of US$1.06 per share on July 14, increasing from its US$1.00 dividend paid out in the previous quarter.
Reported total revenues climbed 15 per cent to US$24.3 million from US$21.1 million.
Net income available to common stockholders was approximately US$13.0 million, or US$0.73 per diluted share, and adjusted funds from operations were approximately US$21.0 million, or US$1.19 per diluted share. Net income available to common stockholders and AFFO increased by 322 per cent and 263 per cent over the same fiscal period in 2019.
IIPR said it completed an underwritten public offering of 1,550,648 shares of common stock in May, including the full underwriter’s option to buy an additional 202,259 shares, which resulted in net proceeds of approximately US$114.9 million.
Subsequent to the end of the quarter, IIPR completed another offering of 3,085,867 shares of common stock, including the underwriters’ option of an additional 402,504 shares, which it said resulted in gross proceeds of approximately US$258.7 million. This offering is not calculated in this quarter’s figures.
The firm ended the quarter with US$50.2 million in cash and cash equivalents as well as US$323.3 million in short-term investments, totaling US$373.5 million.
IIPR reported US$143.7 million in unsecured debt, consisting solely of 3.75 per cent exchangeable senior notes maturing in 2024, representing a fixed cash interest obligation of approximately US$5.4 million annually, or US$1.3 million quarterly.
In terms of property acquisition, from April 1, 2020 through today, IIPR acquired eight properties totaling approximately 775,000 rentable square feet located in California, Massachusetts, Michigan, New Jersey and Pennsylvania. These eight properties represented an investment of approximately US$191.5 million.
In these transactions, IIPR said it established new tenant relationships with multi-state operators Columbia Care Inc. (OTCMKTS: CCHWF) and Curaleaf Holdings, Inc. (CSE: CURA).
As of August 5, 2020, the company said it’s invested or committed to invest a total of approximately US$1.1 billion across its total portfolio.
Earlier in the pandemic, IIPR said it had worked with some of its tenants to temporarily defer monthly rent payments, but since then it has collected 100 per cent of contractual rent due for each of the months of April, May, June, and July.
One exception is a previous agreement for a property in Los Angeles, California that is under receivership.
“Holistic has entered into a definitive agreement to acquire the retail, distribution, cultivation and manufacturing licences for cannabis operations from the tenant at [IIPR]’s Los Angeles, California property, which is in receivership, and [IIPR] is in negotiations for a long-term, triple-net lease with Holistic for the entire property upon the closing of Holistic’s acquisition of the licences,” the company said. “The transaction is subject to court approval and customary closing conditions, and [IIPR] can provide no assurance that the transaction, including the lease, will be completed on the terms described here, or at all.”
Top photo by Cannabis Tours via Wikimedia Commons