Innovative Industrial Properties (IIPR) is a tiny holding of mine. I fully grant that this is a speculative position, I don’t really consider it an “investment.” And even if it were, it’s a REIT which almost by definition would eliminate it from consideration on this board. So, why am I writing about it?

Well, it’s up almost 60% since my first purchase 5 months ago in December 2017.

What do they do? In a nutshell, they provide custom indoor facilities at very high, long-term lease rates for medical marijuana growers. They are, you might say, growing like a weed. But they have only a very limited public history, they went public in 3Q17. They had no real prior history to becoming public. They cater exclusively to the medical marijuana industry at this time as they feel it is a less risky market than the recreational marijuana market even though the money is gravitating to the recreational users. They are managed by a seasoned executive team in the real estate industry.

There are a ton of risks associated with this company, so even though I’ve been tempted by stock price appreciation to buy more, I’ve held my greed in check, for me they remain a tiny, speculative venture. But, they’ve performed well enough that I thought I would bring this company to the attention of the board. Maybe there are others here with a bit of a gambling impulse.

Marijuana, while “legalized” in an ever increasing number of states, remains illegal at the federal level. As such, IIPR, though not a direct player in the grow/process/sell business, services the industry and is therefore cut off from normal financing mechanisms. They cannot borrow from a bank as no lending institution will give them any money. On the bright side, they carry $0 debt. Their only sources of funds are equity or borrowing from private lenders. They have a bit under 7M common shares outstanding. Close to half of that is held by institutions, so this is not a liquid holding. They pay a dividend, presently $1.00/share/year. Last October they issued a preferred at about $25. It has settled at a pretty steady $27.50+/- paying about 8.2%. I do not hold any preferred shares.

If Senator Schumer’s proposed marijuana decriminalization bill gets passed, it will open up lending to the marijuana industry. I imagine this would goose the stock in a big way. I also imagine it would be significant enough risk reduction in order for them to broaden their customer base to include recreational weed growers.

Anyway, enough said. If this piques your interest, please investigate on your own and I suggest just nibble, don’t bite if you get motivated sufficiently to buy.


Yes. Thank you. Took a moderate bite. Why? Because every unleased building in the town where I live is now a pot store. Former banks, strip clubs, filling stations are all now pot shops. Drive across river to Washington? Every freeway exit has a pot shop so you can get your stash on the go. The avalanche had started, the pebbles don’t get much of a vote. A lot of depressed people in this world.

Man On the Street

Then again, what do I know? I work in the same IT shop that maintains the Oregon Medical Marijuana database. Their manager just left to be CIO of the Oregon Liquor Control’s Recreational Marijuana Program.
Just saw on the news this morning that they are putting a stop on grower applications because they are so baclogged. And further food for thought is the news article that came out explaining that Oregon had enough pot to supply 3 times the number of residents. So maybe I sell my new stock sooner than I thought.

IIPR does not lease any facilities in Oregon. Look at the website, mostly in the east though HQ is in California. I doubt they’ll do business on the West Coast until pot is decriminalized. At present, they only provide facilities for medical marijuana.

Kinda like Uber. They will soon be everywhere. Not today, immediately, but someday. Like most things that are a good investment there are variables to measure.