Warren Buffett and cannabis stocks go together like orange juice and toothpaste. In other words, they don’t.
There are plenty of reasons why that’s the case. Buffett has never been a fan of “sin” stocks. Most pot stocks aren’t profitable — and the billionaire investor doesn’t like companies that don’t make money. The fact that cannabis remains illegal at the federal level in the U.S. is also likely a major impediment.
However, I think there’s one marijuana stock that even Buffett might like: Innovative Industrial Properties (NYSE:IIPR).
Image source: Getty Images.
The REIT stuff
First of all, IIP addresses some of the potential objections the Oracle of Omaha would likely have to many cannabis stocks. It’s highly profitable. Its business doesn’t violate any federal laws, either.
IIP is a real estate investment trust (REIT) that focuses on the U.S. medical cannabis industry. Although its tenants aren’t compliant with federal cannabis laws, IIP isn’t involved in the sale or handling of cannabis at all. The company is able to list its shares on the New York Stock Exchange with no problem.
In the fourth quarter of 2020, IIP’s revenue and earnings more than doubled year over year. Such robust growth is typical for the company. Its shares sank because the seemingly impressive numbers didn’t meet analysts’ expectations, but Buffett has never thought all that highly of what Wall Street analysts think anyway.
There’s ample reason to…
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Warren Buffett and cannabis stocks go together like orange juice and toothpaste. In other words, they don’t.
There are plenty of reasons why that’s the case. Buffett has never been a fan of “sin” stocks. Most pot stocks aren’t profitable — and the billionaire investor doesn’t like companies that don’t make money. The fact that cannabis remains illegal at the federal level in the U.S. is also likely a major impediment.
However, I think there’s one marijuana stock that even Buffett might like: Innovative Industrial Properties (NYSE:IIPR).
Image source: Getty Images.
The REIT stuff
First of all, IIP addresses some of the potential objections the Oracle of Omaha would likely have to many cannabis stocks. It’s highly profitable. Its business doesn’t violate any federal laws, either.
IIP is a real estate investment trust (REIT) that focuses on the U.S. medical cannabis industry. Although its tenants aren’t compliant with federal cannabis laws, IIP isn’t involved in the sale or handling of cannabis at all. The company is able to list its shares on the New York Stock Exchange with no problem.
In the fourth quarter of 2020, IIP’s revenue and earnings more than doubled year over year. Such robust growth is typical for the company. Its shares sank because the seemingly impressive numbers didn’t meet analysts’ expectations, but Buffett has never thought all that highly of what Wall Street analysts think anyway.
There’s ample reason to…
