Cannabis-Use Private Mortgage REIT vs Publicly Traded REIT

[Rob Sechrist]

Cannabis-use focused publicly-traded REITs such as IIPR have outperformed their non-cannabis publicly traded peers, but there is still the volatility of the market fluctuations of the stock price regardless of the REIT dividend. Private REITs avoid these market fluxations and over many of the same benefits.

A mortgage REIT, gets the same tax benefits, such as qualifying for a 20% savings on Federal income taxes and only paying state taxes in the investor's domicile state.

As a specialty asset-class that was deemed an essential business during COVID-19, this was the one real estate asset class that was unaffected during the lockdowns across the nation.

The dislocation of the capital markets has provided a niche asset class with disproportionate yields with relatively lower risk.

Most people are unaware of the Rohrabacher–Blumenauer amendment defunded the DOJ from prosecuting any cannabis-related business in a medically licensed state, so there has been a path through since the amendment pasted in 2014.

Additionally, most people are unaware that more than 700+ banks and credit unions have approved Tier I (plant-touching) cash depositor accounts, including FDIC insured State banks and dozens of these banks have already started lending to these cannabis operators in their home states.