Last Thursday, a company named Innovative Industrial Properties Inc. (NYSE: IIPR) began trading on the New York Stock Exchange. The initial public offering (IPO) from the company was the first on the NYSE for a cannabis-related company.
The IPO, however, did not generate much heat or light or even smoke. IIPR had originally planned to hold its IPO during Thanksgiving week, offering 8.75 million shares at $20 per share to raise $175 million. After several cuts to the number of shares on offer, Thursday’s IPO launched with 3.35 million shares raising $67 million.
IIPR is a real-estate investment trust (REIT) that plans to acquire and manage specialized industrial properties leased to experienced, state-licensed operators for their regulated medical-use cannabis facilities. The company owns no properties yet, but is reported to be about to acquire a $30 million facility in New York.
The lackluster IPO could be down to a couple of things: first, $175 million was a little rich for a company with no assets; and second, the nomination of Senator Jeff Sessions to become the Attorney General of the United States under a Trump administration. Sessions, as we’ve noted before, is a staunch opponent of marijuana legalization and should he be confirmed as AG the Obama administration’s more tolerant attitude toward marijuana is believed likely to be reversed, and quickly. If Sessions decides rigorously to enforce federal drug laws, companies like IIPR and the cannabis-related small businesses that have sprung up in the states where weed is legal, face at best an uncertain future.
Weed’s Legal in California, but Activists Fear a Battle Ahead with Jeff Sessions, Trump’s Pick for Attorney General
Backers of laws allowing marijuana use in California are girding for a possible political and legal battle against President-elect Donald Trump’s pick for attorney general, Sen. Jeff Sessions, a staunch foe of pot legalization.
Marijuana industry leaders in the state and around the U.S. have launched an opposition campaign to the Senate confirmation of the Republican senator from Alabama and are appealing to the Trump camp to make sure the president-elect’s policies are consistent with his campaign comments that he favors allowing states to decide how to enforce marijuana laws.
“We are very concerned, because Sen. Sessions has a strong record of opposition to marijuana reform,” said Bill Piper, a senior director of the Drug Policy Alliance, a national legalization group that supported California’s Proposition 64, which legalizes recreational use of marijuana.
Sessions said at a legislative hearing in April that “good people don’t smoke marijuana,” a drug that he said is “dangerous.” He went on to say, “We need grown-ups in charge in Washington to say marijuana is not the kind of thing that ought to be legalized.”
Read more at the Los Angeles Times.