He’s long been opposed to the legalization of cannabis. But he may be changing his tune. New York Governor Andrew Cuomo has, on more than one occasion, called cannabis a gateway drug. But a new report on the benefits of legalization could be a catalyst for the governor to reconsider his opposition to legalization.
Changing Cuomo’s Mind
Of course, this isn’t some big epiphany, but the governor needed some convincing.
The governor also has quickly discovered that one of his challengers, actor and activist Cynthia Nixon, has garnered a lot more support than political insiders expected, due primarily to her making legalization a top priority in her bid to become governor.
Politics aside, the Health Department’s new report offered some great data points that are sure to be excellent fodder for coming debates.
Reductions in opioid prescriptions, the fact that prohibition has resulted in disproportionate criminalization of certain racial and ethnic groups, and the realization that with legalization in place, the Empire State could end up generating as much as $542.3 million a year in tax revenues, are all key points that will certainly bolster the movement to legalize cannabis.
Stock That Will Benefit From New York Legalization
Of course, this doesn’t mean Cuomo will really back legalization in an honest and responsible way. But if he does, there’s one company that investors should have exposure to: Innovative Industrial Properties (NYSE: IIPR).
Innovative Industrial Properties is a cannabis REIT that utilizes triple-net lease arrangements, whereby the tenant is responsible for taxes, maintenance, insurance and structural repairs, as well as base rent. The lease terms are typically set at a minimum of fifteen years with renewal options exercisable by the tenant, and with contractual annual rent adjustments.
IIPR currently has two assets in New York: One with PharmaCanna, which has 127,000 square feet of rentable space, and one with Vireo Health, which has 40,000 square feet of rentable space.
IIPR also has assets in Minnesota, Arizona, Maryland, Massachusetts, and Pennsylvania. But today, we’re focusing on New York, which is where Innovative Industrial Properties already has a first-mover advantage.
Innovative Industrial Properties is actually a fairly safe cannabis stock to own. It trades on the NYSE, it pays a small dividend, and the company’s executive chairman is a 30-year veteran of the real estate industry who co-founded two NYSE-listed REITs. One of which was BioMed Realty Trust, which was sold to Blackstone in 2016 for $8 billion. Keep a close eye on Innovative Industrial Properties.
*Full Disclosure: Jeff Siegal currently own shares of Innovative Industrial Properties (NYSE: IIPR)