Top Cannabis REITs to Watch in December 2025Cannabis real estate investment trusts remain a unique way to gain sector exposure. Instead of selling cannabis, these companies collect rent or interest. As a result, they reduce direct operational risk. Still, tenant health and capital markets remain critical factors. As December 2025 approaches, several names stand out for investors. In particular, Innovative Industrial Properties, NewLake Capital Partners, and Chicago Atlantic Real Estate Finance deserve atten ...

CHICAGO, Dec. 19, 2025 (GLOBE NEWSWIRE) -- Chicago Atlantic Real Estate Finance, Inc. (NASDAQ: REFI), a commercial mortgage real estate investment trust, announced that its board of directors has declared a regular quarterly cash dividend of $0.47 per share for the fourth quarter of 2025. The regular quarterly dividend, which equates to an annualized rate of $1.88 per common share, is payable on January 15, 2026, to shareholders of record as of the close of business on December 31, 2025. About Chicago Atlan ...

Core Insights - The ancillary cannabis sector is gaining attention as it provides essential services without directly handling the plant, facing fewer regulatory challenges compared to plant-touching companies [1][2] - Despite a slowdown in the U.S. cannabis market growth in 2025, analysts maintain a long-term positive outlook, prompting investors to seek stable investment opportunities [1][2] Industry Overview - The U.S. cannabis market is expanding, with new recreational states emerging, although the growth rate has decelerated in 2025 [1] - Ancillary companies are less affected by retail price fluctuations, providing a more predictable revenue stream, making them attractive to investors [2] Company Profiles Innovative Industrial Properties (IIPR) - IIPR is a leading cannabis real estate investment trust, focusing on cultivation and processing facilities with long-term triple-net lease agreements [5][6] - The company operates primarily in limited-license states, ensuring stable demand and indirect exposure to retail performance [6][8] - Despite industry challenges, IIPR remains profitable, maintaining a conservative balance sheet and steady rental income [8][9] NewLake Capital Partners (NLCP) - NLCP adopts a focused approach, owning both industrial and dispensary properties under triple-net leases, ensuring steady rental income [10][12] - The company emphasizes conservative borrowing and predictable income, making it a lower-risk option in the ancillary sector [12][13] - NLCP has maintained stable financial performance and continues to pay solid dividends, with potential for growth as new recreational states emerge [14][15] Chicago Atlantic Real Estate Finance (REFI) - REFI operates as a commercial mortgage REIT, providing secured loans to cannabis operators rather than owning properties, which reduces operational risk [16][19] - The company focuses on credit quality and capital preservation, generating attractive interest income from its loan portfolio [18][19] - REFI's strategy allows it to participate in cannabis growth while avoiding many risks associated with cultivation or retail operations [19]

Industry Overview - The cannabis industry has experienced significant growth since the first state legalized cannabis, leading to opportunities for investors [1] - Legal operators in the cannabis sector are facing challenges that may impact trading for marijuana stocks [2] - The outcome of upcoming federal reform legislation will be crucial for the trading behavior of marijuana stocks [3] Company Highlights - **Innovative Industrial Properties, Inc. (NYSE:IIPR)**: A real estate investment trust (REIT) focused on specialized industrial properties and life science real estate [4] - **Chicago Atlantic Real Estate Finance, Inc. (NASDAQ:REFI)**: Reported total revenues of $64.7 million and net income of $28.3 million, or $0.97 per share for Q3 2025 [7] - The company paid a quarterly dividend of $1.90 per common share on October 15, 2025, with a debt to total gross assets ratio of 13% and total gross assets of $2.7 billion [7] - **NewLake Capital Partners, Inc.**: An internally-managed REIT providing real estate capital to state-licensed cannabis operators [12] - The company advanced approximately $3.3 million to existing borrowers from October 1, 2025, to November 4, 2025, and had total liquidity of approximately $63 million as of November 4, 2025 [14]

Core Insights - The ancillary cannabis sector is gaining interest as it navigates a changing landscape, with ancillary operators facing fewer challenges compared to traditional cannabis companies [1][2] - The U.S. cannabis industry continues to grow, with increasing consumer demand and the development of new markets, benefiting ancillary providers [2][3] - Expectations for federal reform could enhance the long-term outlook for ancillary stocks, particularly those involved in real estate and structured lending [3] Summary of Key Companies - **Innovative Industrial Properties (IIPR)**: A specialized real estate investment trust (REIT) that supports regulated cannabis operators through long-term net leases, focusing on cultivation and processing facilities in key states. The company benefits from stable rental agreements and has a conservative financial strategy, maintaining strong cash reserves and manageable debt [5][8] - **NewLake Capital Partners (NLCP)**: Another cannabis-focused REIT that leases to operators across cultivation and retail-support properties. It emphasizes high-quality assets and long-term leases, maintaining a diverse tenant base to balance revenue streams. The company shows steady growth and low leverage, appealing to investors seeking stability [9][11] - **Chicago Atlantic Real Estate Finance (REFI)**: A commercial mortgage REIT that provides senior secured loans to state-licensed cannabis operators. This model allows REFI to capture high-interest income while maintaining collateral control. The company focuses on limited-license states and maintains a disciplined credit approach, generating predictable revenue from interest payments [12][14]

Core Insights - The U.S. cannabis sector is expanding with more states legalizing medical or adult-use cannabis, leading to increased importance of ancillary cannabis stocks that provide support services without directly selling cannabis [1][2] Industry Overview - The cannabis industry is experiencing shifting trends, including tightening licensing rules in some states and the opening of new retail markets in others. Federal reform discussions are ongoing, particularly regarding banking access and tax structure [2] - Ancillary companies that provide essential infrastructure and capital may benefit more quickly than direct cannabis businesses as reforms progress, making them appealing to investors [2] Risk Management - Risk management is crucial in the cannabis industry due to uncertain regulations, shifting demand patterns, and credit challenges among operators. Investors should assess tenant strength, debt levels, and dividend sustainability when considering ancillary holdings [3] Noteworthy Companies - **Innovative Industrial Properties (IIPR)**: A real estate investment trust specializing in cannabis-licensed industrial facilities, focusing on long-term net-lease agreements with tenants. The company has a strong portfolio and maintains high occupancy rates, providing stable rental income [5][7] - **NewLake Capital Partners (NLCP)**: Another real estate investment trust that owns cultivation, processing, and retail properties. It emphasizes long-term leases and targets reliable operators, maintaining stable cash flow and high occupancy rates [8][10] - **Chicago Atlantic Real Estate Finance (REFI)**: A commercial mortgage REIT providing credit to cannabis-licensed businesses through senior secured loans. The company focuses on high yields while managing credit risk and aims to benefit from improved banking access as federal reforms progress [11][13] Financial Performance - **Innovative Industrial Properties**: Generates revenue primarily from long-term leases, maintaining strong profit margins and a notable dividend. The company has faced isolated tenant defaults but continues to manage its portfolio strategically [7] - **NewLake Capital Partners**: Generates revenue through rental income and maintains a conservative balance sheet, supporting dividend sustainability. The company is focused on stability and disciplined expansion [10] - **Chicago Atlantic Real Estate Finance**: Generates revenue through interest payments and loan structuring fees, maintaining a diversified loan book. The company pays a meaningful dividend but requires careful monitoring of borrower credit trends [13]

Financial Data and Key Metrics Changes - The loan portfolio principal totaled approximately $400 million as of September 30, 2025, with a weighted average yield to maturity of 16.5%, down from 16.8% in the previous quarter [10] - Net interest income for Q3 2025 was $13.7 million, a decrease of 5.1% from $14.4 million in Q2 2025, primarily due to non-recurring fees and the impact of a 25 basis point rate cut [13][14] - Distributable earnings per weighted average share were approximately $0.50 and $0.49 for basic and fully diluted shares, respectively, a modest decrease from $0.52 and $0.51 in the previous quarter [15] Business Line Data and Key Metrics Changes - Gross originations during the quarter were $39.5 million, with $11 million advanced to a new borrower and $20 million related to a new credit facility [10] - The portfolio consisted of 36.7% fixed-rate loans and 63.3% floating-rate loans, with only 14% exposed to further rate declines due to interest rate floors [11] Market Data and Key Metrics Changes - The company noted challenges in private credit markets, including declining interest rates and concerns over underwriting standards, which have led to trading at a discount to book value [6] - The cannabis pipeline currently stands at approximately $441 million, diversified across various growth investments and market activities [7] Company Strategy and Development Direction - The company focuses on principal protection and disciplined capital deployment in limited license jurisdictions, supporting fundamentally sound growth initiatives [7] - Management expressed confidence in the cannabis sector and the company's strategy, highlighting a robust platform to meet industry growth [8] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the volatile private credit environment but emphasized consistent execution and performance [5] - The company is optimistic about the cannabis market, particularly in states like Virginia, which is seen as an attractive market for future growth [24] Other Important Information - Total leverage was 33% of book equity as of September 30, down from 39% in the previous quarter [12] - The company expects to maintain a dividend payout ratio of 90% to 100% for the 2025 tax year, with potential special dividends if taxable income requires it [15] Q&A Session Summary Question: Discussion on the pipeline and ESOP opportunities - Management confirmed that ESOPs continue to be a significant part of the pipeline, with no significant exits other than normal turnover [19] Question: Update on maturing loans - Management is negotiating terms to extend maturing loans and expects to retain the majority of them [21] Question: Opportunities in Virginia's cannabis market - Management views Virginia as an attractive market due to its controlled licensure structure and potential for recreational market growth [24] Question: Underwriting approach and success factors - Management highlighted a focus on limited license jurisdictions and operators with diverse earnings streams as key to their underwriting success [28] Question: Lending program update for New York - The New York Social Equity Fund has opted not to draw additional capital, but the company is ready to support future deployments [56]

Financial Data and Key Metrics Changes - The loan portfolio principal totaled approximately $400 million as of September 30, 2025, with a weighted average yield to maturity of 16.5%, down from 16.8% in the previous quarter [9] - Net interest income for Q3 2025 was $13.7 million, a 5.1% decrease from $14.4 million in Q2 2025, primarily due to non-recurring fees and the impact of a 25 basis point rate cut [11] - Distributable earnings per weighted average share were approximately $0.50 and $0.49 for basic and fully diluted shares, respectively, a slight decrease from $0.52 and $0.51 in the previous quarter [13] Business Line Data and Key Metrics Changes - Gross originations during the quarter were $39.5 million, with $11 million advanced to a new borrower and $20 million related to the new Verano credit facility [9] - The portfolio consisted of 36.7% fixed-rate loans and 63.3% floating-rate loans, with only 14% exposed to further rate declines due to interest rate floors [10] Market Data and Key Metrics Changes - The company noted challenges in private credit markets, including declining interest rates and high-profile failures in the syndicated loan market, which have affected investor sentiment [5] - The company has a cannabis pipeline valued at approximately $441 million, diversified across various growth investments and restructuring activities [6] Company Strategy and Development Direction - The company focuses on principal protection and disciplined capital deployment in limited-licensed jurisdictions, aiming to support fundamentally sound growth initiatives [6] - The management team executed share repurchases, indicating confidence in the company's strategy and portfolio [8] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the cannabis market, particularly in Virginia, which is seen as an attractive medical and potential recreational market [21] - The company is well-insulated against interest rate declines, with a significant portion of its portfolio protected by rate floors [10] Other Important Information - The company expects to maintain a dividend payout ratio of 90%-100% for the 2025 tax year, with potential special dividends if taxable income requires additional distributions [13] Q&A Session Summary Question: Discussion on the pipeline and potential originations - Management confirmed that ESOPs continue to be a significant part of the pipeline, with no significant exits other than ordinary churn [17] Question: Update on loans maturing before year-end - Management is negotiating terms to extend the majority of loans maturing before year-end [19] Question: Opportunities in Virginia's cannabis market - Management views Virginia as an attractive market and plans to expand relationships and deploy capital as opportunities arise [21] Question: Approach to underwriting and success factors - The company focuses on market analysis, limited license jurisdictions, and conservative leverage levels to ensure credit quality and principal protection [26][29] Question: Competition from regional banks in the cannabis sector - Management acknowledged increased competition from banks that have developed expertise in the cannabis space, viewing them as partners in the lending ecosystem [50] Question: Update on lending program to New York - The New York Social Equity Fund has paused additional capital draws, but the company is ready to support further deployments if needed [54]

Core Insights - Chicago Atlantic Real Estate Finance, Inc. reported quarterly earnings of $0.49 per share, exceeding the Zacks Consensus Estimate of $0.46 per share, but down from $0.56 per share a year ago, resulting in an earnings surprise of +6.52% [1] - The company posted revenues of $13.69 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 3.44%, although this is a decline from $14.46 million in the same quarter last year [2] - The stock has underperformed, losing about 15.2% year-to-date compared to the S&P 500's gain of 16.5% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.43 on revenues of $13.81 million, and for the current fiscal year, it is $1.84 on revenues of $54.51 million [7] - The estimate revisions trend for the company was mixed prior to the earnings release, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market [6] Industry Context - The Financial - Miscellaneous Services industry, to which the company belongs, is currently ranked in the top 32% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Company Overview - Chicago Atlantic Real Estate Finance is a commercial mortgage REIT and institutional lender focused on state-licensed cannabis operators[10] - The company has closed over $3.2 billion in loans since its platform inception[8, 10] - The company's outstanding loan principal is $399.9 million with a gross portfolio yield of 16.5%[8] - The real estate collateral coverage in the current portfolio is 1.2x[8] Portfolio Diversification - The top 10 loans account for 65.7% of the outstanding loan principal[23] - The portfolio is diversified by rate type, with 36.7% in fixed-rate loans and 63.3% in floating-rate loans[23, 67] - The portfolio is diversified across various states, with Illinois at 19%, Ohio at 16%, Florida at 8%, Michigan at 14%, and California at 7%[26] - Loans with Retail/Industrial collateral are 31.6% and 47.1% of the portfolio respectively[28, 32] Financial Performance - For the three months ended September 30, 2025, net income was $8.93 million, or $0.42 per basic share[68] - Distributable Earnings for the three months ended September 30, 2025, were $10.52 million, or $0.50 per basic share[69]