"Capital provider" for cannabis producers rises after dividend announcement
Shares of NewLake Capital Partners, a real estate firm specializing in properties for licensed cannabis producers, rose by 2% on Thursday, June 13. The company announced that it would pay a dividend of $0.43 per share for the second quarter of 2024.
Details
NewLake Capital Partners’ stock price increased by 2.08% on Thursday, June 13, on Nasdaq, reaching $19.65 per share. Over the past year, NewLake’s shares have gained 62.16%. However, since its initial trading in mid-2021, the stock has decreased by almost 30%.
On Thursday, NewLake announced a second-quarter dividend for 2024 amounting to $0.43 per share, nearly 5% more than the payout after the first quarter. The dividend is scheduled for payment on July 15.
About NewLake
Founded in 2019, NewLake describes itself as a capital provider for licensed cannabis growers and retailers. The company operates two main business lines. The first is sale-leaseback transactions: NewLake purchases cannabis cultivation facilities and then leases them back to operators for an average of 15-20 years, with the tenants covering associated costs such as taxes, insurance, and maintenance. The second line of business is financing the construction of bespoke dispensaries.
In the first quarter, NewLake reported revenue of $12.6 million, a 10.4% increase year-over-year. Net income attributable to common shareholders grew by nearly 17% to $6.9 million over the same period.
«The cannabis industry has much to be excited about following the proposal to reschedule cannabis from Schedule I to Schedule 3,» said CEO Anthony Coniglio upon releasing the financial results. Currently, cannabis is classified under Schedule 1, which includes drugs with a high potential for abuse (alongside heroin). However, in May, the U.S. Department of Justice proposed reclassifying it to Schedule 3, alongside ketamine and codeine (the former used as an anesthetic, the latter for coughs among other uses). This reclassification is one of Joe Biden‘s campaign promises.
Analyst views
According to MarketWatch, two analysts are tracking NewLake’s performance. Their recommendation is to buy, with an average price target of $23.5 per share, indicating a potential upside of 19.6% from the closing price on June 13.
