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apartment REITs
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single family rental REITs
manufactured housing REITs
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Cell tower REITs
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office REITs
mall REITs
hotel REITs
Timber REITs
healthcare REITs
Billboard REITs
shopping center REIT
Casino REITs
cannabis REITs
farmland REIT investing
mortgage REITs

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  • Alex Pettee, CFA

Cannabis REITs: High On Growth

  • Cannabis REITs are riding a seemingly never-ending 'high' since bursting onto the scene in the late 2010s, thriving in the murky and often contradictory regulatory framework of legalized marijuana.

  • The ongoing federal prohibition - and the resulting limit on access to traditional banking - has forced cultivators and retailers to turn to alternative sources for capital, including cannabis REITs.

  • While still early in the evolution of the industry, we see emerging parallels with the casino industry where REITs have carved out a profitable and attractive niche with a sustainable competitive advantage.

  • Critically, as additional states adopt tax and regulatory frameworks, marijuana cultivation licenses are increasingly "attached" to the real estate asset - and limited in quantity - an ideal structure for these REITs.

  • Valuations remain sky-high and risks are plentiful, but for growth-oriented investors willing to speculate on the emerging industry, cannabis REITs offer unique exposure and have delivered relentless performance.

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Disclosure: A complete list of holdings and Real Estate and Housing Index definitions and holdings are available at Hoya Capital Real Estate advises an Exchange Traded Fund listed on the NYSE. Hoya Capital is long all components in the Hoya Capital Housing 100 Index.

Additional Disclosure: It is not possible to invest directly in an index. Index performance cited in this commentary does not reflect the performance of any fund or other account managed or serviced by Hoya Capital Real Estate. Data quoted represents past performance, which is no guarantee of future results. Information presented is believed to be factual and up-to-date, but we do not guarantee its accuracy.

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