Cannabis REITs: Own The Pharmland
Cannabis REITs - the best-performing property sector over the past half-decade - have stumbled in early 2022, pressured by the broader growth-to-value rotation and uncertainty over progress on federal legalization.
Owning the 'Pharmland' - the physical real estate - has been one of the few profitable investments in the cannabis space. Cannabis ETFs have delivered dismal investment performance since 2015.
Thriving in the murky and often contradictory regulatory framework of legalized marijuana, recent legislative movement on cannabis-related bills has raised questions about the future prospects in a federally-legalized environment.
Importantly, federal legalization simply shifts the regulation onto the states, many of which have adopted frameworks that are quite favorable to property owners with licenses that are "attached" to real estate.
While still inherently speculative, valuations now appear quite attractive as these REITs have established a genuine competitive moat, a track record of operational execution, and consistent dividend growth.