With neither the Democratic nor the Republican party close to the 60-vote threshold in the Senate required to advance difficult legislation, federal reform regarding cannabis will likely be on hold for a while. However, with two more states -- Maryland and Missouri -- adopting recreational marijuana sales in ballot referendums this past week, there are now 21 adult-use states. Both of these trends are good for cannabis real estate investment trusts (REITs) like AFC Gamma (NASDAQ: AFCG) and Industrial Properties (NYSE: IIPR).

The two REITs are thriving. This is partly because with cannabis still on Schedule 1 under the Controlled Substances Act, banks generally won't provide full services to marijuana companies in the U.S. That means cannabis retailers, when they need capital, are more likely to turn to REITs for cash, typically is sale leaseback deals in which the seller gets funds while the REIT gets a long-term tenant. The two REITs are benefiting from a supply/demand imbalance in what looks to be a prolonged environment in which it will remain hard for cannabis producers to raise capital.

Maryland and Missouri are currently limited-license states for medical marijuana. As they become recreational-use states more companies will look to expand there, opening up more opportunities for AFC Gamma and Industrial Innovative Properties.

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Source Fool.com