Innovative Industrial Properties, Inc. (IIPR), a real estate investment trust (REIT) focused on acquiring and managing properties leased to state-licensed cannabis operators, reported its financial results for the third quarter and the nine months ended September 30, 2024.

For the three months ended September 30, 2024, total revenues decreased to $76.5 million from $77.8 million in the same period of 2023. However, for the nine months, revenues slightly increased to $231.8 million from $230.4 million year-over-year. The company’s total expenses for the third quarter rose to $34.6 million, compared to $34.0 million in the prior year, while expenses for the nine months increased to $102.0 million from $99.7 million. Consequently, income from operations for the third quarter fell to $42.0 million from $43.8 million, and for the nine months, it decreased to $126.3 million from $130.6 million.

Net income for the third quarter of 2024 was $40.2 million, down from $41.6 million in 2023, while net income for the nine months decreased to $121.6 million from $124.0 million. Net income attributable to common stockholders also declined, with $39.7 million reported for the third quarter compared to $41.3 million in 2023, and $120.4 million for the nine months, down from $122.9 million.

The company’s cash and cash equivalents increased to $147.1 million as of September 30, 2024, from $140.2 million at the end of 2023. Total stockholders’ equity was reported at $1.95 billion, a slight decrease from $1.95 billion at the end of 2023. The company issued 402,673 shares of Series A Preferred Stock during the nine months for net proceeds of $9.6 million, and 123,224 shares of common stock for net proceeds of $11.8 million.

Strategically, IIPR acquired a 23,000 square foot industrial property in Maryland for $5.6 million in October 2024, and executed a lease with a subsidiary of Maryland Cultivation and Processing. The company also amended its Revolving Credit Facility, increasing commitments from $50 million to $87.5 million as of November 2024.

The company continues to face challenges in the cannabis market, including declining unit pricing and increased operational costs due to inflation, which have pressured margins and led to some tenant consolidations. Despite these challenges, IIPR maintains a robust portfolio of 108 properties across 19 states, with a 95.7% lease rate and a weighted-average remaining lease term of 14 years.