Financial Performance - Net interest income for Q3 2025 was $13,685,274, a decrease of 5.1% from $14,424,987 in Q2 2025 and a decrease of 5.3% from $14,459,393 in Q3 2024[3] - Distributable earnings for Q3 2025 were $10,522,142, or $0.50 per share, compared to $10,850,941, or $0.52 per share in Q2 2025[3] - For the nine months ended September 30, 2025, net income was $29,125,711, compared to $27,853,228 for the same period in 2024, representing a year-over-year increase of approximately 4.6%[15] - Distributable Earnings for the three months ended September 30, 2025, were $10,522,142, compared to $11,159,241 for the same period in 2024, reflecting a decrease of about 5.7%[18] - Basic earnings per common share for the three months ended September 30, 2025, were $0.42, down from $1.33 in the same period of 2024[15] - Net interest income for the nine months ended September 30, 2025, was $40,882,509, compared to $41,152,195 for the same period in 2024, showing a slight decline of about 0.7%[15] - The company reported a basic Distributable Earnings per Weighted Average Share of $1.48 for the nine months ended September 30, 2025, compared to $1.61 for the same period in 2024[18] Loan and Growth Opportunities - Total loan principal outstanding as of September 30, 2025, was $399,948,492, an increase of 12.2% from $356,285,780 in Q3 2024[3] - The company has a pipeline of over $415 million in new loan opportunities, indicating strong future growth potential[2] - The company advanced approximately $3.3 million to existing borrowers on delayed draw term loan facilities from October 1, 2025, to November 4, 2025[4] Financial Stability and Ratios - As of September 30, 2025, total leverage was approximately $101.7 million, with $52.4 million drawn on the Revolving Loan[5] - The debt/equity ratio improved to 32.8% from 38.8% in Q2 2025, indicating better financial stability[3] Dividends and Shareholder Returns - The company declared regular dividends of $0.47 per share, consistent with the previous quarter[3] - The company intends to pay dividends to stockholders in an amount equal to its net taxable income, subject to Board authorization[16] Expenses and Management Fees - Total expenses for the nine months ended September 30, 2025, were $11,753,622, compared to $13,463,967 for the same period in 2024, indicating a decrease of approximately 13%[15] - Management and incentive fees for the three months ended September 30, 2025, were $1,435,071, compared to $1,669,116 for the same period in 2024, a decrease of approximately 14%[15] Outlook and Confidence - Chicago Atlantic affirmed its 2025 outlook previously issued on March 12, 2025, indicating confidence in future performance[6] Shareholder Metrics - The weighted average number of common shares outstanding for the three months ended September 30, 2025, was 21,074,771, compared to 19,625,190 for the same period in 2024, an increase of about 7.4%[18] Credit Losses - The provision for current expected credit losses for the three months ended September 30, 2025, was $557,220, compared to a benefit of $(989,597) for the same period in 2024[18]

Loan Portfolio Composition - As of September 30, 2025, approximately 63.3% of the loan portfolio was comprised of floating rate loans, while 36.7% were fixed rate loans[162]. - The company aims to maintain a diversified portfolio across jurisdictions and verticals, including cultivators, processors, and dispensaries[157]. - As of September 30, 2025, 34.8% of the principal of loans held in the portfolio were backed by personal or corporate guarantees[157]. - The company's loan portfolio included loans to 26 borrowers with a carrying value of approximately $398.1 million as of September 30, 2025[186]. - The total principal of loans held for investment as of September 30, 2025, was approximately $399.9 million, with fixed-rate loans at $146.3 million (36.7%) and floating-rate loans at $251.7 million (63.3%)[189]. - The loan portfolio is diversified across multiple states, including Michigan, Arizona, and Florida[190]. - The company has a significant portion of loans (11.6%) maturing in 2025, indicating potential liquidity events[190]. - The top three borrowers represented approximately 27.5% of principal outstanding as of September 30, 2025, indicating a concentration risk in the loan portfolio[253]. - The company has a diverse loan portfolio across multiple states, with the top five states (Illinois, Ohio, Florida, Pennsylvania, and Michigan) accounting for 66% of the total loans[255]. Financial Performance - Interest income for the three months ended September 30, 2025, decreased by approximately $1.0 million, or 6%, compared to the same period in 2024, primarily due to a decline in the weighted average portfolio yield from 18.2% to 16.5%[185]. - Net interest income for the three months ended September 30, 2025, was $13.7 million, a decrease of 5% from $14.5 million in the same period in 2024[183]. - Distributable Earnings for the three months ended September 30, 2025, were $10,522,142, compared to $11,159,241 for the same period in 2024, representing a decline of about 5.7%[199]. - The book value per share as of September 30, 2025, was approximately $14.71, slightly down from $14.83 as of December 31, 2024[200]. - For the nine months ended September 30, 2025, the Company reported net cash provided by operating activities of approximately $22.3 million, an increase of approximately $0.9 million compared to $21.3 million for the same period in 2024[212]. - Net cash provided by investing activities for the nine months ended September 30, 2025, was approximately $16.0 million, significantly higher than $2.0 million for the same period in 2024[213]. - For the nine months ended September 30, 2025, net cash used in financing activities was approximately $(35.8) million, compared to $(24.4) million for the same period in 2024[216]. Risk Management - The company faces risks related to interest rate volatility, credit losses, and changes in market conditions that could impact its operating results[169]. - The company’s loans are primarily secured by real estate, equipment, receivables, and licenses, with strict loan covenants in place to mitigate credit risk[250]. - The company is exposed to market risks, particularly fluctuations in interest rates, which could affect net interest income and the fair value of loans[241]. - The company expects to utilize historical market loan loss data to estimate future expected loan losses, reflecting the maturing cannabis industry and increasing consumer demand[232]. - The company’s CECL Reserve is impacted by subjective estimates of future loan performance and macroeconomic conditions, which are revised quarterly[233]. - The company faces risks from decreases in property values, which could reduce collateral value and potential loan repayment[257]. Dividend and Tax Strategy - The company is externally managed and elected to be taxed as a REIT, which requires distributing at least 90% of its taxable income to stockholders[166]. - The company intends to pay dividends to stockholders in an amount equal to net taxable income, subject to Board authorization[197]. - The Company anticipates distributing at least 90% of its REIT taxable income to stockholders annually, with total cash dividends declared for the nine months ended September 30, 2025, amounting to $1.41 per share[220]. Loan Management and Strategy - The company intends to grow its portfolio by making loans to leading operators in the cannabis industry, with loans ranging from $5 million to $200 million[156]. - The company intends to capitalize on favorable market conditions in the cannabis sector to expand its portfolio and addressable market[177]. - The company is actively managing its loan portfolio, with options for contractual extensions and amendments as needed[190]. - The company may seek to raise further equity capital and issue debt securities, with a Shelf Registration Statement effective for up to $500 million of securities[209]. Interest Rates and Economic Conditions - The effective Prime Rate as of September 18, 2025, was 7.25%, reflecting changes in interest rates that impact the company's operations[163]. - The company has 16 floating-rate loans, representing approximately 63.3% of the total loan portfolio, and estimates a hypothetical 100 basis points increase in the Prime Rate would increase annual cash interest income by approximately $2.5 million[238]. - The commercial real estate loans are subject to volatility due to various economic factors, which may adversely affect the company's financial performance[257].

Core Insights - Chicago Atlantic Real Estate Finance, Inc. reported its financial results for the quarter ending September 30, 2025, highlighting a focus on proven operators in limited-license states and strong underwriting practices [1][2] Financial Performance - Net interest income for the quarter was $13,685,274, a decrease from $14,459,393 in the previous quarter and $14,424,987 in the same quarter last year [3] - Total expenses before provision for expected credit losses were $4,193,515, down from $4,565,322 in the previous quarter and similar to $4,237,354 a year ago [3] - Net income for the quarter was $8,934,539, slightly up from $8,877,375 in the previous quarter but down from $11,211,636 in the same quarter last year [3] - Distributable earnings were reported at $10,522,142, compared to $10,850,941 in the previous quarter and $11,159,241 a year ago [3][22] Portfolio and Capital Activity - The total loan principal outstanding was $399,948,492, a decrease from $421,918,148 in the previous quarter and an increase from $356,285,780 a year ago [3] - The company has a pipeline of over $415 million in new opportunities and advanced approximately $3.3 million to existing borrowers on delayed draw term loan facilities during the subsequent period [2][5] - As of September 30, 2025, the company had total leverage of approximately $101.7 million, with $52.4 million drawn on the revolving loan and $49.3 million in notes payable due 2028 [12] Market Position and Strategy - The company remains insulated from potential adjustments in the Prime rate, with 86% of current loans structured with interest rate floors greater than or equal to the prevailing Prime rate [2] - Chicago Atlantic focuses on delivering strong, risk-adjusted returns to stockholders, as evidenced by recent stock purchases in the open market [2] Outlook - The company affirmed its outlook previously issued on March 12, 2025, indicating confidence in its growth trajectory [7]

Core Insights - The U.S. cannabis industry is projected to exceed $40 billion in sales by 2025 and could surpass $70 billion by 2030 as more states legalize cannabis for medical and recreational use [1][19] - Cannabis REITs such as Innovative Industrial Properties, Chicago Atlantic Real Estate Finance, and NewLake Capital Partners are positioned to benefit from this growth, offering attractive dividend yields between 8% and 12% [1][20] Group 1: Innovative Industrial Properties (IIPR) - IIPR is the first publicly traded cannabis REIT in the U.S., focusing on acquiring and leasing specialized facilities to licensed operators [3][5] - The company reported quarterly revenues of approximately $62.9 million, a decline from the previous year due to tenant defaults, but maintained a net income exceeding $25 million [8][9] - IIPR has a strong balance sheet with a debt-to-asset ratio below 12% and over $190 million in available liquidity, emphasizing disciplined acquisitions [9] Group 2: Chicago Atlantic Real Estate Finance (REFI) - REFI specializes in originating senior secured loans to state-licensed cannabis operators, providing a unique entry point into the cannabis space [10][12] - The company maintains a loan portfolio generating attractive interest spreads between 12% and 15%, with strong credit performance and high income stability [13][14] - REFI's conservative loan-to-value ratios and focus on experienced operators contribute to low default rates, making it well-positioned to capitalize on the industry's capital needs [14] Group 3: NewLake Capital Partners (NLCP) - NLCP focuses on property ownership through sale-leaseback transactions and build-to-suit projects, leasing to major cannabis operators [16][18] - For the first half of 2025, NLCP reported revenues of $26.1 million and a stable net income of $13.6 million, with a low debt-to-asset ratio of approximately 1.6% [17][18] - The company's dividend payout is currently $0.43 per share quarterly, translating to an annualized payout of $1.72 per share, ensuring sustainability [18]

Core Insights - Chicago Atlantic Real Estate Finance, Inc. announced that its Officers and Directors purchased approximately 54,000 shares valued at around $673,000, increasing their beneficial ownership to about 1,770,000 shares, which represents approximately 8.2% of fully diluted common shares outstanding [1][2] Company Overview - Chicago Atlantic Real Estate Finance, Inc. is a commercial mortgage REIT that focuses on originating senior secured loans primarily to state-licensed cannabis operators in limited-license states across the United States [3] - The company has closed over $2.8 billion in credit and equity investments to date and operates offices in Chicago, Miami, New York, and London [3] Management Confidence - The Co-Chief Executive Officer expressed confidence in the company's opportunities and commitment to generating strong risk-adjusted returns for shareholders, emphasizing that purchasing shares in the open market is a demonstration of this confidence [2]

Company Overview - Chicago Atlantic Real Estate Finance, Inc. is a commercial mortgage real estate investment trust (REIT) focused on originating senior secured loans primarily to state-licensed cannabis operators in limited-license states in the United States [4] - The company has closed over $2.8 billion in credit and equity investments to date and operates offices in Chicago, Miami, New York, and London [4] Upcoming Earnings Release - The company plans to issue its earnings release and supplemental financial information before the market opens on Tuesday, November 4, 2025 [2] - A conference call and live audio webcast will be held on the same day at 9:00 a.m. Eastern Time, which will be open to the general public [2][3] - The interactive teleconference can be accessed by calling (833) 630-1956 for domestic callers and (412) 317-1837 for international callers [2]

Group 1 - Mortgage REITs offer better returns than standard REITs but often involve high leverage, complicating the assessment of their portfolio strength [1]

Industry Overview - The cannabis real estate sector is gaining renewed attention, with the U.S. cannabis industry showing robust fundamentals, reaching approximately $30.1 billion in legal sales in 2024, growing about 4.5% year over year [1] - Analysts project the U.S. cannabis market to reach $76 billion by 2030, with an annual growth rate near 11% [1] - Regulatory momentum is building, with lawmakers pushing for federal reform, which could enhance banking access and reduce financing barriers for cannabis operators [1] Company Profiles Innovative Industrial Properties, Inc. (IIPR) - IIPR is the largest publicly traded cannabis REIT in the U.S., owning over 100 properties across 19 states, focusing on long-term triple-net leases with state-licensed cultivators and processors [3] - The company provides essential infrastructure for multi-state operators, enabling steady income through fixed contractual rents [3] - IIPR's balance sheet is conservative, with low leverage and substantial liquidity reserves, maintaining steady rental income despite industry headwinds [6] NewLake Capital Partners, Inc. (NLCP) - NLCP combines industrial and retail cannabis real estate holdings, owning over 30 properties in 12 states by 2025, utilizing a sale-leaseback model [7] - The REIT's properties include dispensaries and production facilities leased to established multi-state operators, providing balanced exposure to both wholesale and consumer-facing segments [7] - NLCP reported total quarterly revenue of approximately $12.9 million in 2025, with net income around $7 million, indicating continued earnings stability [9] Chicago Atlantic Real Estate Finance, Inc. (REFI) - REFI provides structured debt and commercial mortgage loans to cannabis operators, financing acquisition and expansion projects across multiple states [10] - The company managed loan principal balances exceeding $400 million, with an average yield near 17%, and reported quarterly net interest income of around $13 million [12] - Non-performing loans represented less than 1% of total assets, highlighting the strength of REFI's underwriting standards [13] Financial Performance - IIPR's funds from operations (FFO) showed resilience, with management actively renegotiating leases to stabilize revenue [6] - NLCP's disciplined underwriting and conservative financing strategy have allowed consistent rent collection, even amid financial stress in parts of the cannabis sector [9] - REFI's strong liquidity and disciplined credit monitoring help the company navigate potential market downturns, providing a steady income stream for investors [13]

Group 1 - Chicago Atlantic Real Estate Finance, Inc. (NASDAQ:REFI) is a majority shareholder in Vireo Growth Inc. (CSE: VREO), which has signed merger agreements with Proper Cannabis, Deep Roots Harvest, and WholesomeCo Cannabis [1][2] - The merged entity will operate 48 dispensaries, nine cultivation facilities, and have 1,043,500 square feet of production and manufacturing space across seven states [2] - Vireo has valued the merger deals at approximately $397 million and announced a $75 million equity offering at $0.625 per share [2]

Group 1 - Chicago Atlantic Real Estate Finance, Inc. declared a regular quarterly cash dividend of $0.47 per share for Q3 2025, equating to an annualized rate of $1.88 per common share [1] - The dividend is payable on October 15, 2025, to shareholders of record as of September 30, 2025 [1] Group 2 - Chicago Atlantic Real Estate Finance, Inc. is a leading commercial mortgage REIT that focuses on originating senior secured loans primarily to state-licensed cannabis operators in limited-license states in the U.S. [2] - The company has closed over $2.8 billion in credit and equity investments to date and operates offices in Chicago, Miami, New York, and London [2]