Innovative Industrial Properties offers high-yield dividend opportunities

Innovative Industrial Properties is a real estate investment trust (REIT) that focuses on properties for the marijuana industry. The company is known for being profitable and offers a high-yield dividend, which makes it an interesting option for investors. As support for marijuana legalization grows in the U.S., Innovative is seen as a strong choice for stock portfolios. The company is the largest cannabis-focused REIT, with a portfolio of 109 properties. These properties are leased to well-known cannabis companies like Trulieve and Green Thumb Industries. This leasing model helps marijuana businesses avoid the challenges of owning property while focusing on their core operations. In 2024, Innovative's properties generated nearly $307 million in revenue, and adjusted funds from operations reached over $256 million. However, these numbers were slightly lower than in 2023 due to a tenant, PharmaCann, defaulting on leases. After negotiations, Innovative and PharmaCann reached an agreement that alleviated some financial pressure. Despite recent challenges, analysts expect Innovative to rebound. They project revenue for 2026 to reach approximately $311 million, a nearly 5% increase from 2025. Innovative pays out at least 90% of its taxable income as dividends to maintain its status as a REIT. Currently, the dividend remains at $1.90 per share, which gives a yield close to 11%, even after recent tenant issues. The future of marijuana legalization in the U.S. remains uncertain, but public support is strong. Many believe laws will eventually change, benefiting Innovative and the industry as a whole. Overall, Innovative Industrial Properties may offer a good opportunity for investors looking for high yields and potential growth in the cannabis sector.