In Australia, 50,000 prescriptions for medical-use cannabis were approved until the end of June 2020 and the government expects that number to reach 70,000 by the end of this year Source: Stockhead.com.au
$IIPR Innovative Industrial Properties Set To Race Higher In Q4
On a great day for marijuana inventories in general, Innovative Industrial Properties (NYSE: IIPR) was a star on Thursday. Besides the optimism that such companies have buffet in recent days, the investment trust in cannabis real estate reported very good results for the forth quarter of fiscal 2020.
For the quarter, total revenues of Innovative almost tripled year-over-year at just over $34.3 million. The adjusted operational funds of the Company (AFFO) were raised to nearly $27.9 million, or $1.28 per diluted share, out of the year-end result of $9.5 million.
On average, analysts estimated revenue of only $26.6 million and AFFO per share of $1.16, respectively. With a special mention by Hedgeye Analysis
It is currently the only REIT on the stock market specialising in marijuana properties. Although its growth figures are not as strong as in some places in the past, they continue to add to their portfolio and thus to grow their revenues. In Q4, it acquired five properties of nearly 450,000 profitable square feet.
As REIT, Innovative is required to pay for shareholder distributions at least 90% of its taxable income. Last month, a quarterly dividend of 1,17 dollars was disbursed — the highest in its (assuming brief) history and 10% higher than its previous dividend.
No wonder Innovative on Thursday was such a hot stock. It shut down almost 17% higher on the day, driving the S&P 500 profit.
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IIPR share price chart
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Market size potential
The incremental legalisation of cannabis in recent years has led to an immense flurry of events – most of them on stock markets like Canada and Australia – with firms rushing to the potentially large cannabis products markets.
Global View Research’s report estimated last year that the global legal market for marijuana reached a whopping $146.4 billion by 2025, with the United States and Canada as market leaders.
While there have been different industrial values offered by other market research firms, New Frontier Data predicts a potential market worth 25 billion US dollars.
At the end of last year, an in-depth report was published estimating the overall current cannabis industry in Australia (including illegal) at up to A$ 6.3 billion.
Meanwhile, Prohibition Partners, a European company, has suggested that the marine cannabis industry (including Australasia, Melanesia, Micronesia and Polynesia) could cost the economy at least A$ 12.3 billion by 2028.
Prohibition partners also forecast that Australia’s cannabis leisure market could grow to A$ 8.8 billion per year in the next decade if legalised soon.
Although there are currently more than 1,000 registered Australian patients obtaining prescription cannabis, the company estimated that it could swell to 400,000 by 2028.
In comparison to many offshore markets that depend on greenhouse growth, Australia has the capacity for crops for outdoor cannabis and two crops per year in sunshine areas.