Innovative Industrial Properties Stock Continues to Dominate in 2021
Consistency isn’t something you often see in the marijuana stock market. At least, you’re unlikely to see consistency when it comes to pulling in impressive gains week after week, month after month, etc.
Innovative Industrial Properties Inc (NYSE:IIPR) is an outlier in that IIPR stock somehow seems to be unwavering in its ability to rise. But will Innovative Industrial Properties stock be able to continue its gains in 2022?
My honest answer: absolutely.
Dear reader, I’ve been vocal about my support for IIPR stock for years. Over the past three years (throughout which I’ve been an ardent supporter), Innovative Industrial Properties stock has enjoyed an insane 600% gain.
The gain of 600% is impressive, and it’s even more impressive considering how consistent Innovative Industrial Properties Inc’s gains have been.
Remember, we’re talking about the pot stock market, a sector that’s famous for its volatility. That volatility is precisely what makes the industry so appealing.
Marijuana stocks are prone to making huge upward swings in a matter of weeks, or even days. But the downside of that volatility is that gains easily won can just as easily be lost. Even the top pot stocks have gone into prolonged correction periods.
IPPR stock, however, doesn’t seem to follow that same rhythm.
While there have been ups and downs, Innovative Industrial Properties stock never seems to take more than a month or so to recover from corrections, no matter what may be happening in the larger marijuana market.
Take a look at Innovative Industrial Properties Inc’s stock chart:
Chart courtesy of StockCharts.com
Despite other top marijuana stocks going into significant nosedives over the past six months, IPPR stock has trended in the exact opposite direction.
In other words, the market forces that often send other pot stocks tanking simply don’t impact Innovative Industrial Properties stock in the same way.
And that makes perfect sense.
After all, IIPR stock isn’t your traditional weed stock; it’s a marijuana real estate investment trust (REIT) that has established a business model of buying land across the U.S. to rent out to marijuana producers.
This business model has proven to be extremely profitable, and it has allowed Innovative Industrial Properties Inc a number of advantages that are denied to other U.S. marijuana companies.
The first thing that should stick out is that Innovative Industrial Properties stock is listed on the New York Stock Exchange (NYSE). That essentially makes it the only U.S. pot stock that has a listing on one of the two major U.S. exchanges (the other being the Nasdaq).
This allows Innovative Industrial Properties Inc to rake in huge influxes of cash from investors, both retail and institutional. In contrast, virtually every other U.S. marijuana stock trades over the counter, which limits the amount of cash they can raise publicly.
Why does being on the NYSE versus being on the over-the-counter (OTC) market make such a difference? Because there’s a stigma surrounding the OTC market in the minds of many investors.
While it may not be fair, the simple fact is that, by being listed on a major U.S. stock exchange, investors have a sense that a company is vetted and legitimate. OTC stocks are seen as riskier and less trustworthy.
Another huge advantage that IIPR stock has is that Innovative Industrial Properties Inc is just as much of a real estate company as it is a marijuana company, and real estate is one of the fastest-growing and stable investments right now.
Doubters and doomsayers speak of real estate bubbles on the horizon that could burst at any moment, and they may even be right, but central banks have been reluctant to let real estate value drop, as indicated by their response to the 2008 financial crisis.
At that time, among the top priorities of the U.S. government was to stabilize the housing market by buying mortgages from failing banks and reselling them to private investors.
Investment firms like Blackstone Inc (NYSE:BX), which operated as a private equity firm in 2008, were able to buy up huge swaths of the housing market for next to nothing, then either flip the properties to other private equity groups or run them as rental properties, generating massive amounts of wealth.
In other words, the real estate market is quite protected, so that engenders a lot of trust in Innovative Industrial Properties stock.
Furthermore, Innovative Industrial Properties Inc operates on the assumption that the U.S. marijuana market is growing and will continue to grow for years to come.
That’s pretty much universally believed. While it’s uncertain which pot stocks will be best positioned to take advantage of said market growth, the fact that there will be growth is almost indisputable.
As such, rather than trying to single out one pot stock that will beat out all rivals, many investors are happy to just invest in a REIT that will supply marijuana producers with the properties they need to grow cannabis.
Analyst Take
Much like the old adage, “when there’s a gold rush, sell picks and shovels,” Innovative Industrial Properties Inc has taken to selling farmland during a marijuana rush.
All this serves to make IIPR stock one of the most exciting and stable pot stocks, able to rise without fear of a major sustained correction for potentially years to come.
While there are many great options for marijuana investors, it’s hard to dispute that Innovative Industrial Properties Inc has been the most impressive pot company of the past several years.
And the best part is that Innovative Industrial Properties stock’s winning streak shows no signs of slowing down as the U.S. marijuana market continues to expand rapidly.
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