How Risky Is Innovative Industrial Properties?
Wall Street loves a good story and, usually, takes story stocks to extreme heights. When reality creeps in, such previously adored stocks generally fall hard as investor enthusiasm wanes. That's exactly what has taken place in the marijuana space, with some of the biggest names in the industry hitting the skids lately. That's why investors might prefer an industry supplier like real estate investment trust (REIT) Innovative Industrial Properties (NYSE: IIPR). There's a lot to like about this owner of grow houses, but there are risks to consider here, too.
Innovative is an interesting way to gain exposure to the marijuana space because it doesn't actually grow anything. It owns the facilities in which the plant is grown and leases them out to growers. The story behind the long-term growth potential for marijuana sales is still largely the same (and huge), even if the enthusiasm for pot growers has died down. Simply put, as long as there is an increasing demand for cannabis, there is likely to be increasing demand for the facilities in which pot is grown.
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Source Fool.com
