Through the woes of both an embattled cannabis sector and a pandemic-stricken economy, Innovative Industrial Properties, Inc. (NYSE: IIPR) continues to build value for its shareholders.
The real estate investment trust released its earnings for the quarter ending March 31, 2020, after markets closed on Wednesday.
Reported revenues increased 19 per cent to US$21.1 million, from US$17.1 million in the last quarter of 2019. Revenues were up 210 per cent from the first quarter last year, IIPR said.
The company’s stock fluctuated in after-hours trading, falling around 4 per cent to US$78 per share at publication time.
While the company paid a dividend of US$1 to shareholders on April 15 — a dividend of any kind is almost unheard of in the weed sector — the dividend did not increase in value from the previous quarter.
Net income available to common shareholders increased overall to a reported US$11.5 million, up from US$9.6 million in the previous quarter. However, value per shareholder decreased slightly to US$0.72, from US$0.78 per diluted share.
The decrease was due to an underwritten public offering in January of almost 4 million shares of common stock, which generated US$239.6 million for the company. IIPR also issued an additional US$78.2 million in common stock at an “at-the-market” offering.
IIPR reported having approximately US$108.3 million in cash and cash equivalents and approximately US$272.9 million in short-term investments.
As a company that makes its money from rentals of purchased cannabis-related properties, it reported acquiring nine since the beginning of January. The new investments cost IIPR US$202.1 million.
Through its new acquisitions across seven states, the company said it established a new relationship with the parent company of Surterra Wellness, a business with an extensive medical retail footprint, as well as expanding existing relationships with Cresco Labs (CSE: CL) and others.
In the report, IIPR said it’s deferred rental payments from three of its 21 tenants. The deferrals are structured to apply a portion of the security deposit IIPR holds under each lease to pay April’s rent in full, to defer rent for May and June in full, “and provide for the pro rata repayment of the security deposit and deferred rent over an 18 month time period starting July 1,” the company said.
The amount of the security deposits and the deferred rent for May and June totals US$2.3 million, the company said, representing 3 per cent of IIPR’s total revenues in the quarter.
Executive chairman Alan Gold said his company’s strategy of maintaining a conservative, flexible balance sheet means it’s well positioned to weather the current health crisis and continue to make long-term investments.
“We remain steadfast in our support of this industry and its bright long-term future, and are working every day through this crisis with our tenant partners toward continuing to build a tremendous future forward of growth and strength for many years to come,” he said in the statement. “When we overcome this crisis through the collective ingenuity of our top medical professionals and researchers, the regulated cannabis industry will continue to thrive and be one of the top drivers of growth and good jobs across the country.”
Top image: creative commons photo