Could Innovative Industrial Properties Be In Trouble?
The marijuana industry is expected to grow from $24 billion in sales in 2020 to $46 billion in 2026. Real estate investment trust (REIT) Innovative Industrial Properties (NYSE: IIPR) is a "picks and shovels" play on the space, as it owns the grow houses that will support that expansion in sales. That's not a bad position to take, as it allows the REIT to benefit regardless of which pot growers end up being winners. And yet there are some risks that need to be addressed. Here are some big ones to consider.
One of the big problems for cannabis growing companies is the murky legal status of the drug. It is increasingly being legalized for both medicinal and recreational use in U.S. states, but it remains illegal at the federal level. There are rumors that this could change, but until it does, most financial institutions are likely to avoid the sector to ensure they don't run afoul of any laws. Innovative Industrial basically works to take advantage of this funding access problem.
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Source Fool.com
