Bet on The Green Horse

Marijuana REITS

Written by Jimmy Mengel
Posted September 28, 2017

Investing in marijuana can be like buying a ticket at the racetrack...

It’s very difficult to identify who is going to be the next big grower, the next big medical producer, or the next company to go down in flames.

The same goes for the track: Some horses look strong. Some jockeys have scored more big wins. Some trainers have incredible histories...

And of course — like marijuana companies — some horses have hilariously awesome names (I’ve fallen for that trick before, in both instances).

Thankfully for me — and for you — I have a dear friend who is a jockey. He actually came from a family of jockeys — because, honestly what else do you do when you’re that small — and grew up at the racetrack. When I went to see him race, he gave me the rundown of what to bet on.

He told me which horses were acting wild that day. He told me which jockeys were struggling with their weight. He told me which owners seemed most excited.

But the most interesting and honest thing he told me is: “I wish I could just bet on the racetrack, they’ll make a boatload of money either way.”

While you can’t really do that with a racetrack, you can do it with the marijuana industry.

Here’s how...

Marijuana needs to be grown somewhere. The problem is that setting up a large-scale growing operation can cost millions and millions of dollars. Upstart companies can’t always afford to do that — especially in the U.S., where financing from traditional banks can be all but impossible.

That’s why REITs could be such an important factor in the industry going forward...

REITs are real estate investment trusts. These are companies that own real estate that produces income.

Basically, these companies act as landlords who charge rent to businesses to occupy these properties. Those businesses could be shopping malls, restaurants, even self-storage facilities and apartment buildings.

Or, for our purposes today, marijuana warehouse operations...

REITs, by law, have to pay at least 90% of their pre-tax income as dividends to their shareholders. That can lead to some really great returns for long-term investors.

In fact, today, the only real way to invest in the marijuana industry and receive a decent dividend payout is to invest in a REIT.

Right now there is really only one serious option in the space…

Innovative Industrial Properties (NYSE: IIPR) was the first marijuana REIT listed on the NYSE — and one of the only cannabis-based companies that has been allowed such a prestigious listing.

The company acquires cannabis facilities and rents them out to licensed growers and producers. These are industrial real estate properties that can allow their tenants to meet the quality standards for medical-use cannabis and provide the space and technology needed to run a successful cannabis company.

Once it sets up its properties, it lands tenants who pay huge premiums for the space.

As Forbes reported, one of its clients is PharmaCann, a medical marijuana company that currently pays $319,580 a month in rent and $105,477 per month in property management fees.

Here in Maryland, Innovative Industrial Properties owns a property that it rents to another medical marijuana producer, Holistic Industries. It pays over a million bucks a month to lease the property to grow its medical plants.

As a landlord, you can get much better returns than you can in the marijuana space. There simply aren't many other options. Unless they come up with millions in funding and have deep enough pockets to stay afloat during the years it takes to get a new facility up and running, most companies are best off paying a premium for a space that is ready to roll.

As the demand for marijuana grows with each new state that legalizes both recreational and medical marijuana, the list of prospective tenants grows for Innovative Industrial Properties. It continues to acquire new facilities to bolster its portfolio of properties.

This is going to be a great growth stock — though it may take some time.

But here’s the best part...

It currently pays a meaty dividend of 3.2%, which is unheard of in this industry. So you get some great yield while we watch the industry grow. It’s the best of both worlds.

Like my jockey friend who helped me make a bundle at the track, it always pays to have someone on the inside who can give you valuable information before the rest of the gamblers place their bets. 

So if you really want to get in on the "off-the-board" investments, Nick Hodge is your man. His last few private placements have brought insane gains of 1,480%, 531%, and 253%.

And his latest deal just opened up...

This one is privately funding a marijuana grow company. This company plans to IPO soon, but you can buy shares before that happens.

He is giving his readers the chance to fund it right now, the only catch is that the offer closes this Saturday, September 30.

If you’d like to partake in this private investment… or even if you just want to learn more about this type of investing… you can check out all of the details right here. 

Godspeed,
jimmy-mengel-signature-fixed

Jimmy Mengel

follow basic @mengeled on Twitter

Jimmy is a managing editor for Outsider Club and the investment director of the personal finance advisory, The Crow's Nest, and cannabis stocks advisory, The Marijuana Manifesto. You may also know him as the architect behind the wildly popular finance and investing website Wealth Wire, where he's brought readers the stories behind the mainstream financial news each and every day. For more on Jimmy, check out his editor's page.

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Investing in Marijuana Without Getting Burned

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