Price Forecast:

Bullish Case: IIPR shows potential for growth backed by robust demand in the cannabis sector, reflected in 100% rent collection and strong operational metrics. Regulatory positivity could enhance tenant stability, driving share prices up beyond current levels.

Bearish Case: Regulatory hurdles, potential tenant defaults, and economic headwinds pose risks to IIPR’s stability. Declining historical returns coupled with rising market volatility could pressure stock performance, particularly in a less favorable market environment.

Potential Outcomes:

1. Continued Growth (60%): Strong operational data persists.

2. Regulatory Setbacks (25%): New policies disrupt operations.

3. Economic Downturn (10%): Market pressures lead to reduced growth.

4. Increased Dividends (5%): A resurgence in dividend growth improves investor confidence.

Trading Oracle: Given current market conditions, initiate a bull put credit spread: sell the $100 put and buy the $95 put, expiring in 31 days. This targets a favorable risk/reward ratio with a potential return of 20% based on historical performance and current volatility estimates. Focus on capturing premium with positive edge.

November 21, 2024