Trump Victory: IIPR Stock In Focus After Q3 Earnings Miss, CEO Bullish On Cannabis Regulation

Shares of Innovative Industrial Properties Inc. ($IIPR) rose by over 1% as markets opened on Friday following Thursday’s 11% fall after the cannabis real estate investment trust’s third-quarter earnings fell short of Wall Street expectations. 

IIPR posted earnings of $1.37 per share, falling short of analysts’ forecast of $1.45 per share. This is the third consecutive quarter that the company has missed earnings estimates. Revenue came in at $76.53 million, just under the expected $77.3 million.

Despite the earnings miss, IIPR CEO Paul Smithers is optimistic about cannabis reforms after Republican candidate Donald Trump’s win in the 2024 US election. 

“We're very happy to see Donald Trump as President with regard to cannabis… He's obviously on record supporting the rescheduling. He supports safe banking and he looks at cannabis as a state's rights issue,” Smithers said during the earnings call. 

He added that he believes these positions will endure throughout Trump’s second term. Smithers is particularly hopeful about the new possibilities for cannabis banking, citing Mitch McConnell’s recent departure from the Senate as an opportunity for renewed efforts on safe banking legislation.

McConnell, the longtime Senate Republican leader, blocked efforts to pass the SAFER Banking Act, which would allow banks to provide services to state-licensed marijuana businesses. 

Stocktwits users share this optimism, with many expressing hope for cannabis reform under a Trump administration. 

In August, Trump had made remarks suggesting he was increasingly in favor of legalizing marijuana, especially as more states move toward legalization. 

At a Mar-a-Lago press conference, Trump acknowledged the difficulties of keeping people incarcerated for offenses related to a substance that is becoming legal in more states.

Despite his skepticism on marijuana during his first term as president, Trump voted in favor of  Florida’s Amendment 3 though it failed to pass.

Meanwhile, retail sentiment around IIPR on Stocktwits has hit its lowest point this year dropping to an ‘extremely bearish’ rating (5/100), coupled with a surge in message volume on Friday.

Some users on the platform are concerned that IIPR's stock might be overvalued.

The company attributed its revenue shortfall mainly to a $3 million decline in rent and property management fees.Tthe timing of the IIPR's earnings results also coincided with the defeat of several key marijuana-legalization measures in recent elections, particularly in Florida. 

Despite the company’s financial performance, IIPR’s shares have seen a 10% increase in value so far in 2024.

For updates and corrections email newsroom@stocktwits.com.

Read more: Vistra Stock Jumps on Q3 Earnings, Eyes Regulatory Tailwinds After Trump’s Win