With a last trade price of $18.34 for shares of IIPR on the NYSE, this price target represents over 30% potential upside. When he initiated coverage, Dan Donlan wrote "With current federal regulations preventing banks from lending to medical and adult use cannabis growers, and debt covenants preventing publicly traded REITs from leasing space to said growers, Innovative Industrial is the only NYSE-listed company currently offering capital solutions (via sale-leaseback transactions) to medical cannabis growers."
Donlan went on to write that his/Ladenburg's "conviction is bolstered by various dynamics including: 1.) the REIT’s first mover advantage, 2.) IIPR’s highly experienced management team that has a proven track record of outperforming in the REIT space, 3.) the large sums of equity that most cannabis growers have tied up in their real estate, and 4.) industry projections that have U.S. medical cannabis sales increasing at a 17% compounded annual growth rate (CAGR) over the next four years."