Innovative Indl

Me again! Last week, there was also a subsequent purchase by limit order.

➡️ 10 shares of Innovative Industrial Properties (IIPR) at 98.99 USD per share have become it. These are added to 20 existing shares, so I currently hold a total of 30 shares.

➡️ After $IIPR (+2,92 %) went under the wheels due to a stumbling tenant (Kings Garden), the share price was quite interesting.

➡️ I waited for the earnings and the earnings call to get some feedback from the management. The default of Kings Garden will probably continue to weigh on the company until the end of the year, but I still think the market reaction is exaggerated.

➡️ Another issue is "SAFE Banking." Previously, when banks provided financial services to cannabis companies, they were punished by regulators. This is now set to change and many are worried that this will have a negative impact on REITs like IIPR.

➡️ In my opinion, SAFE Banking would predominantly impact the profitability of operators and ultimately make rents safer for IIPR. So wait and see!

Update on my last assessment of IIP. First of all, I would like to point out that this is only my opinion and does not represent any investment recommendation.

As of now, today's price slide is about 20%. Why did it come to this? As described in my initial post, the tenant structure at IIP is a risk that should not be underestimated. Yesterday it was reported that a tenant cannot pay the rent (incl. other fees) iHv of 2.2 million for the month of July. Based on IIP's 2021 revenue (approx. 170 million), this amounts to 13.2 million for the rest of the year, i.e. a share of just under 8%, which IIP could lose this year(!) (assuming payment defaults for the rest of the year are taken into account).

Since I assume that even if this income is lost, new tenants will be found by the turn of the year, I find the share price reaction, measured against this, excessive. However, it should also be noted here that if one tenant runs into payment difficulties, it is of course also possible that other tenants will run into payment difficulties. The market currently seems to be pricing this into the share price. For me personally, the opportunities at IIP still outweigh the fact that the tenant structure is risky, is in this respect nothing new, I refer to my initial post.

Further, I apologize for the somewhat superficial information, but since many are certainly wondering what is going on with the stock, I have briefly compiled this post, while I try to supplement this continuously.

Not an investment recommendation.

What happened here??

Cannabis... discussed again and again, from the courses is actually for weeks months the air out except from the Reit innovative industrial properties $IIPR (+2,92 %)

Just a quite good contribution in the ZDF seen about the development in Germany:

https://www.zdf.de/dokumentation/zdfinfo-doku/cannabis-made-in-germany-legale-geschaefte-mit-der-droge-100.html

Is this medical area of cannabis so unfairly beaten up/lacking opportunity? Does this Reit have a future?

Btw: my wife just said dryly next to me: buy some Aurora if they have fallen so 😅🤷🏼‍♂️

Exciting share to participate in the future market of cannabis.

The fact that only infrastructure is provided also reduces the risk of competition.

Hello dear community,

In the following, I would like to present my assessment of the share to those who are interested in Innovative Industrial Properties. I would like to emphasize that this is only my opinion and does not represent any kind of investment recommendation.

1. field of activity

First of all: What does Innovative Industrial Properties actually do? Innovative Industrial Properties (IIP) leases or provides land for commercial cannabis cultivation.

2. opportunities and risks

a. Risks

What opportunities and risks exist? First, I would like to discuss the risks.

- There is the risk of the legalization of cannabis. This could lead to countless (private) people cultivating cannabis and the need for commercial cultivation decreasing, which would also decrease the demand for IIP's properties.

- Further, it should be noted that at IIP, approximately 50% of rent comes from five tenants. In this respect, one is exposed to a certain risk here.

- However, the political risk should not be underestimated either. What if there is a rethink and cannabis cultivation is simply banned completely?

- Even if the fundamental and technical data are not in the foreground here, the high valuation of IIP should be noted.

b. Opportunities

In the following, these risks are countered by the opportunities offered by the share.

- The cannabis market in the USA is expected to double by 2026, i.e. enormous growth, from which IIP would certainly also benefit.

- Attractive for dividend hunters: current dividend yield of approx. 5%, which has been increased for 4 years (from $0.55 per share to $7.00 per share today).

- One is not directly invested in cannabis products or has to commit to a player in this sector. Rather, one benefits from the general growth of this market.

3. conclusion and evaluation of opportunities & risks

Finally, I would like to evaluate the presented opportunities & risks and draw a conclusion.

If one considers a far-reaching legalization of cannabis cultivation to be probable, which I myself rather do not consider to be obvious, it is nevertheless questionable whether this would greatly affect IIP's business model. After all, there will still be commercial operators. Medical facilities will not be sourcing their "resources" from private individuals even then. The high valuation can be justified by the high growth. I consider a ban on cannabis or similar restrictions to be out of the question due to the increasingly liberal development in recent years. However, the dependence on some tenants represents a risk that should not be underestimated. This should be taken into account.

Finally, it should be noted that no one can say how the political wind will blow in the future with regard to this sector. This is, of course, strongly dependent on the respective government.

In my opinion, however, the IIP share offers the opportunity to participate in an exciting growth market with a manageable risk. In addition, an attractive dividend yield is paid.

For the purpose of transparency, I would like to point out that I am invested myself.

What is your opinion?

I ♥️ Shovel salesman

I ❤️ Shovel salesman