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The Biggest Wall Street Takeaways From IIPR's Q2 2017 Earnings Call

August 11, 2017

 

On August 10th, Innovative Industrial Properties Inc. (NYSE:IIPR) hosted a conference call to discuss their recently released Q2'17 financial results. This currently one-of-a-kind, NYSE-listed, dividend-paying, medical-cannabis REIT garners quite a bit of attention from Wall Street. Here are some key aspects of their conference call that the Street paid attention to, and that you should too: 

 

Related: 6 Key Points From Innovative Industrial Properties' Q2'17 Earnings Release

 

One of the biggest challenges for IIPR upon their IPO in December 2016 was that they were a real estate company that didn't own any real estate. Although that has since changed (IIPR now owns two properties, one in New York and one in Maryland), the company still has capital to put to work.

 

Related: Cannabis REIT to Acquire Maryland Property

 

According to IIPR's Executive Chairman, Alan Gold, "[their] top [operational] priority continues to be placing the balance of [the] proceeds from the December IPO in the best properties and with the best tenants for the long-term benefit of [IIPR's] stockholders."

 

The company's President and CEO, Paul Smithers added more color to their acquisition strategy later on in the call: 

 

"...we are intensely focused on investing the remaining proceeds from the IPO in the best opportunities, high quality assets, top-tiered tenants with strong balance sheets and management teams in a stage where we have confidence in the regulatory environment. We're taking a highly selective and disciplined approach to our capital allocation and we have passed on a number of potential investments based on our underwriting criteria and return requirements. That said we're in advanced discussions regarding a number of potential acquisitions with a pipeline of approximately $100 million spanning a number of states including Arizona, Illinois, Maryland, Massachusetts, Ohio and Pennsylvania to name a few." 

 

Mr. Smithers also mentioned that the company is "closely monitoring developments in California" and is "engaged in numerous discussions with high-quality cultivators". That said, the company expressed that in regards to California they are  "careful in underwriting [their] transactions", focusing on high quality cultivators and watching to see how the regulatory environment is evolving. 

 

Related: Marijuana Stocks In and Around California

 

In their first conference call after their IPO, IIPR shared that they believe the company will be able to fully deploy their capital within a six to twelve-month period. They reiterated in Thursday's call that they are "highly confident" in their ability to achieve that goal. 

 

In response to a question regarding current and potential competition in the space from Ladenburg Thalmann REIT analyst Dan Donlan, Mr. Smithers discussed the competitive landscape for cannabis-focused real estate investors like IIPR: 

 

"We've heard of a group up in Seattle trying to raise a fund, but haven't raised the fund. We know of [the] Kalex reverse merger, but we haven't seen them actually placing any of the capital yet, although we believe that they're out there competing and will be a strong and confident competitor."

 

Related: Cannabis REIT Kalyx Announces Merger and Private Placement

 

Mr. Smithers went on to share that he believes that the company has a strong brand reputation, that they are able to attract the best growers as partners and that IIPR has a first mover advantage in the space.  

 

Conclusion

 

For the full earnings call transcript, click here

 

Learn more about Innovative Industrial Properties by checking out the company's marijuana stock profile in our marijuana-related real estate company database

 

Stay up to date with developments from the world of cannabis real estate by subscribing to our free cannabis real estate email newsletter!

 

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Now Read: A Beginner's Guide to the Cannabis-Focused REITs

 

D/M/O

 

Disclaimer
 
Investing in nanocap, microcap, and small cap stocks is highly speculative. The publishers of DailyMarijuanaObserver.com are not registered as Investment Advisors or Broker-Dealers in any jurisdiction whatsoever. The information contained on DailyMarijuanaObserver.com (“this site”) has been prepared solely for informational purposes. Nothing on the site is an offer or solicitation to buy or sell securities. Investors should seek financial advice regarding the appropriateness of investing in any securities mentioned from their financial advisor.

 

 

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