"From a regulatory perspective, New York has tripped over itself in developing and implementing rules which has prevented the market from reaching its near-term potential," Hagedorn said in the company's conference call. Etain has one of 10 vertically integrated licenses from the state. In March 2022, RIV Capital acquired Etain Health, one of New York state's original medical marijuana producers, for $247 million. On the consumer side of cannabis, it has a $150 million six-year convertible note in RIV Capital ( CNPOF), which represents a 42% stake. "Consolidation is happening in the industry, and we see opportunities for high-value, no-cash partnerships to further strengthen Hawthorne's ability to provide value-added and innovative solutions to growers." We will be there to support the turnaround," Hagedorn stated in the Q1 2023 conference call. When it does recover, and it will, growers will be ready to invest in capex. "One final point on the cannabis industry. Overall, Scotts' business is in good shape.ĬEO Jim Hagedorn is optimistic about the cannabis industry. While they're down from the surge in sales caused by the pandemic, they're still significantly higher than pre-pandemic. consumer business delivered an 8% year-over-year increase in sales. Most of the decline in SMG's share price from its April 2021 all-time high can be attributed to the relative collapse of its Hawthorne business. Hawthorne's revenues for the three-month period were just $131.5 million, 57% lower than what was reported two years earlier.
Fast forward to SMG's fiscal first-quarter results reported on Feb. In Q1 2021, the company had record first-quarter revenue of $749 million, with Hawthorne's sales up 71% year-over-year to $309.4 million. Some of the gains were attributable to its Hawthorne Gardening division, which provides nutrients, lighting, and other materials used by indoor and hydroponic growers, including the cannabis industry. At the end of 2018, it traded south of $60, but by April 2021, it had reached an all-time high of $250, a cumulative total return of nearly 320%. Scotts Miracle-Gro ( SMG, $73.64) stock has been on a roller-coaster ride for the past four years. "Further, its tenacious enforcement of its landlord rights on non-paying tenants means the rent must be paid." "Given the company is seeing some of its best investment yields, as competitor capital availability has shrunk, we believe IIPR is well positioned to capitalize," Goldfarb says. Piper Sandler analyst Alexander Goldfarb has an Overweight rating (the equivalent of Buy) on IIPR, with a $120 target price, some 72% higher than current levels. Still, IIPR remains one the best REITs on Wall Street, as well as one of the best marijuana stocks, according to analysts. As a result of the defaults, IIPR stock is down more than 20% since mid-January.
That's not something you want to see, but it's part of owning real estate. Investors can assume that the properties account for approximately 8% of its overall rent. The three properties represent 6.3% of committed capital.įor all of 2022, the REIT collected 97% of its rent.
When the REIT unveiled its fourth-quarter results in January, it threw a wrench into the proceedings by reporting that three properties were in default on their rent: one each in Pennsylvania, Michigan and California. Based on this price received, its 110 properties owned at the end of December have a theoretical value of $4.0 billion, 60% higher than its current market cap. However, it sold a Pennsylvania property in November for $23.5 million, or $461 a square foot. At the end of September, it owned 111 properties. In 2022, the REIT stock made nine acquisitions in seven states for $394 million. Nine, including Illinois, California and Pennsylvania, account for almost 90% of its 8.7 million square feet of rentable space. The REIT's diversified portfolio spans 19 states. This grew to 66 by the end of 2020, and IIPR's portfolio is now at 110 properties. It was founded in 2016 when it had just one property under its umbrella. Innovative Industrial Properties ( IIPR, $69.89) is a real estate investment trust (REIT) that invests in greenhouses and industrial facilities for the medical cannabis industry.
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