Innovative Industrial Properties (NYSE:IIPR), a REIT-marijuana stock, has been investors’ favorite since 2019. On June 30, the company announced its decision to raise additional capital of $225 million.
The company plans to raise the capital through a public offering of its common stock. Innovative Industrial Properties also offered underwriters a 30-day option to purchase up to an additional 402,504 shares of its common stock.
Innovative Industrial Properties raised cash
On June 30, Innovative Industrial Properties announced the upsizing and pricing of an underwritten public offering of 2,683,363 shares of its common stock at $83.85 per share. The gross proceeds would come up to $225 million.
The company offered a 30-day option for some additional shares to be purchased. On July 2, Innovative Industrial Properties announced the full exercise of underwriters’ option to purchase an additional 402,504 shares of common stock. The total gross proceeds from the transaction are $258.7 million.
Raising cash through stock dilution never sits well with investors. However, in Innovative Industrial Properties’ case, it has successfully utilized the cash to grow its business. Innovative Industrial Properties is a non-conventional real estate investment trust company. The company mainly provides real estate solutions to medical marijuana companies in the US.
Choosing the medical cannabis industry has been a wise move for the company. Medical cannabis is a booming sector. So far, 33 states and the District of Colombia have legalized medical cannabis. Since 2019, IIPR has been on an acquisition spree. Now, the company owns 55 properties with around 4.1 million rentable square feet in various US states. Therefore, Innovative Industrial Properties proved that raising capital through stock dilution is beneficial for its growth, which ended investors’ skepticism.
More acquisitions in 2020
In 2020, Innovative Industrial Properties acquired nine properties totaling 1.1 million rentable square feet. The company’s quarterly numbers have also been impressive, which kept investors’ trust intact. However, the performance has declined slightly compared to last year due to the industry’s struggles and the pandemic. Innovative Industrial Properties continues to plan for future growth.
On July 1, the company announced that it closed a property acquisition in Massachusetts. The company also entered into a long-term and triple-net lease agreement for the property with US cannabis company Cresco Labs.
Innovative Industrial Properties mainly generates its revenue from rental revenue. The company recorded a 210% increase in its revenue to $21.1 million in the first quarter. Overall, Innovative Industrial Properties is the best way to enter the marijuana industry in a non-conventional way. IIPR is also a dividend stock that has consistently paid and increased dividends. The company increased its dividend by 122% in its recent first quarter. A dividend stock is always a safety net for long-term growth investors.
Year-to-date, IIPR is the only marijuana stock with positive returns. Aurora Cannabis (NYSE:ACB), Canopy Growth (NYSE:CGC), Cronos Group (NASDAQ:CRON), and OrganiGram (NASDAQ:OGI) have lost 52.6%, 22%, 19.5%, and 33.8%. Meanwhile, US cannabis peers Cresco Labs and Curaleaf have declined 38.9% and 6.2% YTD.
To learn more about the cannabis industry, read What to Expect from Marijuana Stocks in July.