Innovative Industrial Properties seen as undervalued with strong growth potential after cannabis rescheduling boost

Innovative Industrial Properties (IIPR) is currently trading at a high yield despite having a strong, low-debt balance sheet. The recent regulatory change moving cannabis to Schedule III is expected to improve tenant credit quality and reduce risks in IIPR's portfolio. The company has refinanced its debt and is actively working to re-tenant troubled properties, with agreements nearing completion. These factors support a strong buy rating, with expectations for yield improvement and multiple expansion driven by tenant upgrades and regulatory catalysts.