Best Performing Marijuana Stocks In 2021
While most of the best marijuana stocks to buy have declined in 2021 there is one area of the market that has held its value this year. In general marijuana, real estate investment trusts have outperformed the rest of the cannabis stocks significantly. Because of delays with federal cannabis reform, most of the cannabis sector has declined to the lowest values seen this year in December. But cannabis REITs have continued to show strength in the market as 2021 progressed.
In some ways, the delays with banking reform leave top marijuana REITs as one of the main ways leading cannabis companies can get capital for upgrades on growing facilities and processing sites. At the present time, many leading cannabis companies have established some of their cultivating facilities by using triple net leases and loans from top cannabis REITs. This has continued to build long-term lease portfolios for these marijuana REITs going into 2022.
Some of these top marijuana stocks also offer shareholders a dividend. In general, dividends are difficult to find in most cannabis stocks. This makes marijuana REITs better for long-term investors looking to gain exposure to the cannabis market. In addition, many hedge funds and money managers have also taken a liking to these pot stocks to gain long-term exposure to the growing cannabis industry. As the cannabis market continues to expand rapidly across the US with more states establishing legal medical and recreational markets.
Long Term Investing In The Cannabis Market
Before investing in cannabis stocks, it’s always important to do your own research on these companies. Looking into a company’s earnings and press releases can help you find the best-performing companies to invest in. Besides a company’s financials, it’s also important to study how a stock behaves in the market to establish the best entry point for your investment. Including these elements in your trading strategy may help you become a successful trader. Let’s take a closer look at 3 top marijuana stocks to watch in 2022.
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Top Marijuana REITs For Your 2022 Watchlist
- Innovative Industrial Properties, Inc. (NYSE: IIPR)
- Power REIT (NYSE: PW)
- AFC Gamma, Inc. (NASDAQ: AFCG)
Innovative Industrial Properties, Inc.
One of the largest marijuana REITs is Innovative Industrial Properties, Inc., a real estate investment trust focusing on the US-regulated cannabis market. There are now 7.7 million rentable square feet and 2.7 million square feet under development for the corporation. The majority of these properties are 100% leased, with a weighted average remaining lease term of 16.7 years. Currently, the company has 103 properties in 19 states. As of November 3rd, IIP has spent $1.5 billion and guaranteed another $391.7 million to pay renters for property upgrades. IIP continues to acquire properties, notably those in Pennsylvania and Massachusetts, which will considerably expand its lease portfolio in 2021. In addition, the company said that it has bought a location in California and is working with Gold Flora to secure a long-term lease.
In November, IIP announced its third-quarter 2021 results, reporting total revenues of $53.9 million for the quarter. This represents an increase of 1% over the previous year. In the third quarter, the company earned around $29.8 million in net income or about $1.20 per diluted share. IIP paid a quarterly dividend of $1.50 per share in October, a 28% increase over the previous year. The company now has $127.3 million in cash and $554.4 million in short-term investments. On December 15th, IIP declared a $1.50 per share dividend for the fourth quarter of 2021. This equates to an annual dividend of $6 per common share. In December the company added 27 properties to its portfolio in Colorado, Pennsylvania, and North Dakota.
IIPR Stock Performance
On December 29th, IIPR stock was trading at $260.04, up 4.20% over the previous five trading days. The stock is currently trading in a 52-week price range of $160.91-$288.02, with a year-to-date gain of 42.77%. The stock of IIPR has a 12-month median price objective of $290.00 per share, according to CNN Business experts. In this example, this would be an 11.60% increase over the previous trade price of $260.04.
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Power REIT (PW)
Power REIT is a real estate investment trust that focuses on long-term real estate with high risk-adjusted returns. The company holds a growing portfolio of Controlled Environment Agriculture (CEA) buildings, including greenhouses and associated processing facilities. Currently, the properties are leased to tenants who are authorized to grow medicinal cannabis on the premises. The assets are slated for growth, and Power REIT has the ability to pay the property enhancements. Furthermore, Power REIT’s greenhouse facilities provide a sustainable growing alternative.
Power REIT increased its reach in Colorado by purchasing a 10-acre property that includes a 12,000-square-foot greenhouse. Therefore, the business now has investment assets totaling over 83 acres and 383,328 square feet of CEA facilities throughout Southern Colorado. The corporation paid $18.4 million in September for a 556,146 square foot cannabis greenhouse growing and processing facility. This will be Michigan’s and one of the United States’ largest cannabis production facilities. Power REIT owns 21 CEA buildings totaling more than 1 million square feet as of November. The trust paid $0.484375 per share in dividends in the third quarter, for a total of $1.9375 per total share. On December 23rd Power REIT announced it entered into a debt financing facility for $20 million to drive future growth.
PW Stock Performance
PW stock is trading at $65.51 on December 29th, up 16.82% in the past month. Currently, PW stock has a 52-week price range of $26.20-$70.90 and is up 145.98% year to date. According to analysts at Tip Ranks, PW stock has a 12-month average price target of $86.00 per share. In this case, this would represent an upside of 31.46% from its current trading price of $65.51. In 2022 PW stock could be a top cannabis stock to watch for your long-term investment in the cannabis sector.
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AFC Gamma, Inc.
AFC Gamma, Inc. is a well-known cannabis business with strong operations and financial flow. The company, which was created in 2020, focuses on real estate security and other collateral, as well as locations in states with strong supply/demand fundamentals and favorable legislative conditions. AFCG specializes in first-lien loans, mortgage loans, construction loans, and bridge financings, as well as other creative and unique financing options. In general, AFC Gamma’s ideas are currently focused on the cannabis industry’s rapid growth. In October, the business agreed to a $250 million credit upsize at 8.50 percent interest and a $100 million option with Verano Holdings Corp. (OTC: VRNOF).
In November, AFC Gamma announced net earnings of $7.9 million, or $0.48 per average share, for the third quarter of 2021. According to the corporation, it closed $119.2 million in new commitments and funded $89.3 million in new and existing obligations. In October, AFC issued a $0.43 per share dividend, up 13.2% from the previous quarter. On December 15th, the company paid a $0.50 dividend per share for the fourth quarter. This is a 16% rise from $0.43 in the third quarter of 2021. In December Acreage Holdings, Inc. (OTC: ACRHF) secured a $150 million credit facility to accelerate growth initiatives from AFC Gamma.
AFCG Stock Performace
On December 29th, AFCG stock was trading at $22.65, up 5.55% in the past five trading days. The stock has a price range of $18.91 to $25.50 and is up 10.51% in the last six months. AFCG stock has a 12-month average price forecast of $28.38 per share, according to CNN Business analysts. This projection represents a 25.55% increase over the stock’s last trade price of $22.65.