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This Dividend Stock Can Also Give You Exposure to the Fast-Growing Cannabis Industry

Many dividend stocks don’t offer attractive growth prospects. But when it comes to Innovative Industrial Properties (NYSE:IIPR), it’s a bit of an exception. The real estate investment trust (REIT) focuses on the cannabis industry and can offer investors an attractive mix of both dividend income and some promising long-term growth prospects.

As the cannabis industry continues to expand, and if legalization takes place in the future, there could be strong demand for greater operating space in the cannabis industry from producers. Not only could Innovative Industrial Properties expand its presence and generate more revenue, there’s also the potential for it to grow its dividend as well. Since 2020, the REIT’s revenue has soared from $117 million to just under $310 million this past year. And during that time, net income has more than doubled from $64 million to $163 million.

Today, Innovative Industrial Properties pays a dividend that yields 7% per year, which is far higher than the S&P 500 average of 1.4%. On a $25,000 investment, that means you could be collecting $1,750 per year in dividends if you invest in the REIT. Over the past 12 months, Innovative Industrial Properties stock has risen by 35% as hopes are rising that marijuana reform could be coming soon in the U.S., which could pave the way for more growth in the industry.

At 17 times earnings, Innovative Industrial Properties is a reasonably priced REIT to buy right now that could be particularly appealing to cannabis investors who want a relatively safe way to invest in the industry and to take advantage of its growth prospects.