In a sign of the growing demand for cannabis, shares of Overlooked Landlord to the Pot Industry have increased 158% YOY. With Canada now legalizing recreational marijuana, investors are betting on this company’s future as it is poised to be one of the largest players in the industry.
The innovative industrial properties is a company that owns and operates buildings in Colorado, California, and Oregon. They have been able to increase their shares by 158% over the last year.
The stock of a power REIT is up 158 percent year over year; it’s just stretching its legs.
Pot stocks are about more than just producing, processing, and selling marijuana.
In reality, ancillary marijuana companies have outperformed the rest of the cannabis industry. GrowGeneration Corp (NASDAQ:GRWG), Innovative Industrial Properties Inc (NYSE:IIPR), AFC Gamma Inc (NASDAQ:AFCG), Agrify Corp (NASDAQ:AGFY), and Hydrofarm Holdings Group Inc are among the companies we’ve examined in Profit Confidential (NASDAQ:HYFM).
Power REIT is another great ancillary pot stock to consider (NYSE:PW).
The firm is a real estate investment trust (REIT) that focuses on non-traditional, sustainable real estate. Greenhouses, solar power, and transportation infrastructure are all examples of this. PW stock has been ignored by marijuana stock investors since cannabis was not the company’s original focus—but it is now.
In early September, Power REIT drew a lot of interest when it revealed that it had closed on its previously disclosed purchase of a greenhouse growing facility in Marengo Township, Michigan. The state of Michigan has the country’s second-largest cannabis market. (Source: GlobeNewswire, September 9, 2021, “Power REIT Acquires 556,146 Square Foot Cannabis Greenhouse Cultivation and Processing Facility for $18.4 Million in Highly Accretive Transaction.”)
The land, which spans 556,000 square feet, is located in Marengo County’s “Marijuana Overlay District,” which provides for limitless cannabis production permits. Plans are in place to add 330,236 square feet to the 61-acre site, which also has more acreage available for development.
Power REIT’s shares soared to new highs as a result of the purchase. PW stock is up by: as of this writing.
- 16.5 percent in the previous month
- Over the past three months, there has been a 25% increase.
- Year-to-date, 88 percent
- Year-over-year growth of 158 percent
- Since March 2020, the market has increased by 618 percent.
By all indications, this underappreciated marijuana landlord is just getting started.
StockCharts.com provided the chart.
Overview of the PW Stock
Power REIT is a real estate investment trust that focuses on long-term real estate with excellent risk-adjusted returns. Controlled Environment Agriculture (CEA), Solar Farm Land, and Transportation are the three sectors represented by the specialized REIT. (Source: Power REIT, “Investor Presentation – September 2021,” accessed October 4, 2021.)
The business is primarily focused in growing its CEA greenhouse property portfolio for food and cannabis production.
Pittsburgh & West Virginia Railroad, a fully owned subsidiary of Power REIT, owns railroad real estate that is leased to Norfolk Southern Corporation for 99 years with unlimited renewal possibilities after that.
The railroad is made up of 112 miles of track and related property assets. The route runs from western Pennsylvania to eastern Ohio, passing via West Virginia.
The REIT also owns seven sites with a total land area of around 600 acres that are leased to utility-scale solar energy projects.
Power The cash flow from REIT’s solar land assets is very predictable. Its residents have spent more than 20 times the land’s value on solar installations. Long-term power purchase agreements with investment-grade municipalities and/or regulated utilities are also in place for the projects.
The solar farms generate about 50.0 million kWh of carbon-free energy each year, which is enough to power about 4,600 houses.
Then there are Power REIT’s CEA cannabis assets, which number 21 at the moment. Colorado, Michigan, California, and Maine are among the states where they may be found. The buildings are leased by the REIT to tenants who are licensed to grow medicinal cannabis.
Since starting a CEA acquisition binge in July 2019, the company’s core funds from operations (FFO) have risen from $0.13 per share in the second quarter of 2019 to $0.51 per share in the second quarter of 2021, resulting in a pro forma run rate of $0.90.
The management of Power REIT expects $60.0 million in recent deals to yield $60.0 million over the next three years.
This money may be utilized to buy more assets and diversify the company’s portfolio. In addition, assuming 100% reinvestment and a 15% FFO return on investments, the firm could add more than $11.6 million to its FFO.
Exceptional Q2 Results
Power REIT’s sales increased by 133 percent year over year to $2.3 million in the second quarter ending June 30. (Source: GlobeNewswire, August 9, 2021, “Acquisitions Drive Significant Year-Over-Year Growth.”)
Its net income increased by 236 percent to $1.4 million, or $0.41 per share, year over year. The company’s core FFO increased by 202 percent to $1.7 million, or $0.51 per share, year over year.
Power REIT had $28.8 million in cash and cash equivalents at the end of the second quarter, compared to $5.6 million as of December 31, 2020.
Accretive purchases increased Power REIT’s CEA portfolio by eight buildings, or about 317,000 square feet, during the quarter. This should result in yearly rent of about $4.6 million, providing a 17 percent return on initial capital.
The REIT recently executed a rights issue that raised $37.0 million, allowing it to continue with its accretive acquisition strategy. It still has $20.0 million in cash on hand.
Furthermore, the firm filed a shelf registration statement, which will improve the trust’s access to capital.
The revised business strategy for Power REIT, which involves the acquisition of a large number of CEA facilities for the cannabis sector, continues to generate significant growth.
For the six months ending June 30, the company’s core FFO increased by 102 percent year over year. This shows the company’s rapid expansion and the excellent returns it can generate from its strategic CEA investments.
And it’s just the beginning.
While cannabis is legal in 92 percent of the United States, it is still prohibited at the federal level. Furthermore, state and municipal laws continue to have an effect on the industry’s development. This suggests that Power REIT stock has a lot of room to expand in the future years.
Shares of Overlooked Landlord to the Pot Industry Up 158% YOY. The sbvrf is a company that invests in pot-related companies and has seen their share price increase by 158% year-over-year.
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