Innovative Industrial Properties: Attractive Business, But High Oil Prices Could Be A Problem

2026-03-19 12:48:07 ET

Innovative Industrial Properties ( IIPR ) appears to be an appealing investment candidate for income focussed investors at first sight. The company's well-diversified tenant portfolio, its steadily growing AFFO, the growing cannabis market in the United States, the firm's expansion into the life science market, as well as its valuation, all indicate that IIPR could be and attractive investment candidate right now. But there is one significant risk that we cannot forget, and that high energy need of the indoor cannabis growers, with energy costs making up almost 50% of their operating expenses. If energy prices were to remain high, tenants could face significant challenges, potentially creating headwinds for IIPR as well....

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