Raising IIPR to a Best Idea Long
We will be hosting a Black Book call on IIPR on Wednesday, September 16th, at 2PM ET.
IIPR, the only U.S. listed cannabis REIT, focuses on the acquisition, ownership, and management of specific industrial properties leased to experienced, state-licensed operators for their regulated medical-use cannabis facilities. We are bullish on the U.S. cannabis industry, and IIPR is well-positioned to ride the industry’s overall momentum through a growing pipeline of deals. The company currently owns 62 properties, at approximately 4.7M rentable square feet, and upwards to $1.1B in invested capital.
Since the year-end FY18, the dividend has been raised four times and has increased by 300.2%. While it seems the dividend growth has been incredible, the payout ratio has been maintained below 90% over the past four years. The stock is trading at a forward P/AFFO of 23.7, and as a result, its current dividend yield is 3.7%, and that is assuming management doesn't increase the next dividend.
IIPR has high-quality tenants, a conservative balance sheet, and a stellar management team that can execute.
IIPR was first added to the Hedgeye Cannabis Long Bias Bench on 5/29.
Event Details
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Confirmation Number: 13709268
CLICK HERE for webcast event details (includes video and materials link)
Another CEO shakeup for a Canadian LP (CRON)
A day after Aurora announced its appointment of Miguel Martin, Cronos Group announced that it had appointed 30-year CPG executive Kurt Schmidt as the company’s new CEO. Mike Gorenstein, who has served Chairman, President, and CEO of Cronos since 2016, will be assuming the role of Executive Chairman. Schmidt brings more than three decades of experience leading and growing global consumer packaged goods companies and their brands.
Schmidt served as director and Chief Executive Officer of Blue Buffalo Company, Ltd. from 2012 through 2016. Prior to joining Blue Buffalo, Schmidt was Deputy Executive Vice President at Nestlé S.A., where he was responsible for Nestlé Nutrition, including several science-oriented and heavily regulated businesses. He also served as a member of the company’s Executive Committee. Schmidt joined Nestlé in 2007 as part of its acquisition of Gerber Products from Novartis, where he was the President and Chief Executive Officer of Gerber Products Company from 2004 to 2007. Prior to Gerber, Schmidt held a variety of leadership roles at Kraft Foods.
Schmidt’s appointment concludes a yearlong search led by Gorenstein: “Over the past year, I’ve led a search for an experienced consumer focused executive who shares the Company’s values and can help take us to the next level. When I met Kurt, it was immediately clear that he is uniquely suited to drive the Company’s next phase of growth and continue our commitment to lead the industry forward responsibly.”
In Q2 2020, Cronos reported $9.9M in net revenue and -$3.0M in gross loss. The company incurred an inventory write-down of $3.1M, on dried cannabis and cannabis extracts, primarily driven by cannabis product price compression in the Canadian market. Cronos is sitting on ~1.1B in cash and cash equivalents.
Liberty Health Sciences gives an update on its Florida facility meant to double its capacity (LHSIF, TCNNF, CURLF)
Liberty Health Sciences gave an update on its ‘LHS360' cultivation facility, located on a 387-acre parcel in Gainesville, FL. The company plans on expand its facility by another 300,000 square feet by the end of calendar year 2021. This will double its capacity and bring the total cultivation space to 490,000 square feet. The company anticipates that the latest expansion will create more than 200 new jobs to support its growing operation and 26 retail stores, with plans for another ten locations to come online before year end.
Liberty also received Florida Department of Health approval for its Ethanol Extraction Lab, which can extract more than 100 kgs of biomass material per day. This will provide an influx of distillate oil used for oil-derived products, including edibles. This new lab will be 10-times more productive than the Company's current CO2 extraction platform. It will help alleviate processing bottlenecks and allow the Company to expand its current 277 SKU's, with plans to add an additional 150.
While Trulieve has already has Florida Department of Health approval for its commercial kitchen and was been selling edibles just a week after the green light, Liberty is still in the process of obtaining its Florida Department of Agriculture (FDACS) license, which will be followed by the Florida Department of Health approval.
At 26 retail units in Florida, Liberty has 9.6% share of approved units, 5.4% share of mgs THC sold, 2.5% mgs CBD sold, and 6.5% of flower oz sold, as of the most recent Florida OMMU data on a 4WMA.
