NLCP
NLCP
Strong Buy 2026-05-07
Model
DDM
Price at Report
$14.50
Base IV
$16.20
Bear IV
$14.80
Bull IV
$17.62
Entry Zone: 11-14 · Sell Above: 18
Bore Family Office
Valuation Report — NewLake Capital Partners (NLCP) • May 7, 2026
3-Stage DDM (Ke) • Discount Rate: 12.50% • Current Price: $14.50
Prepared by Lurch • Bore Family Office • Data: Finnhub, StockAnalysis.com, S&P Global Market Intelligence
🏢 Business Overview
NewLake Capital Partners is an internally-managed real estate investment trust that provides real estate capital to state-licensed cannabis operators through sale-leaseback transactions, third-party purchases, and build-to-suit funding. The company owns a portfolio of 34 properties — 15 cultivation facilities and 19 dispensaries — primarily leased to single tenants under triple-net lease agreements. Founded in 2019 and IPO'd in 2021, NLCP is the only pure-play cannabis REIT on the OTCQX market, with gross real estate assets of $433M and just $7.6M in total debt (1.6% debt-to-assets). Revenue is 97% rental income with high tenant concentration risk (top 3 tenants represent ~60% of ABR), offset by contractual annual escalators and near-zero leverage that provides a significant margin of safety.
| Business Segment | Revenue | % of Total | YoY Growth | Margin | Notes |
|---|---|---|---|---|---|
| Cultivation Facilities | $22M | 44% | +2.0% | — | 15 properties, triple-net leased to operators |
| Dispensaries | $27M | 53% | +2.0% | — | 19 properties, triple-net leased |
| Other (Interest/Fees) | $2M | 3% | +5.0% | — | Loan interest + reimbursables |
| Blended Growth Rate | — | 100% | +2.1% | — | Weighted avg across segments |
📊 Business Lifecycle Stage
Stage 1
Startup
Startup
Stage 2
Hyper Growth
Hyper Growth
Stage 3
Self Funding
Self Funding
Stage 4
Operating Leverage
Operating Leverage
Stage 5
Capital Return
Capital Return
Stage 6
Decline
Decline
Stage 4 — Mature/Growth: Revenue growing modestly with profits inflecting rapidly. The classic DCF sweet spot — FCF is reliable, growing, and well-anchored to analyst estimates.
Why this drives model selection: Classic DCF sweet spot — FCF inflecting and growing rapidly.
🔍 Quality Scorecard
| Metric | Value | Assessment |
|---|---|---|
| ROIC | 6.6% | <8% weak |
| FCF Margin | 83.1% | ≥10% strong |
| Debt / EBITDA | 0.2x | ≤2x conservative |
| Revenue Trend | Growing 3yr | 3-year directional trend |
| FCF Margin Trend | Stable (±1pp) | Directional margin trajectory |
| Analyst Revisions | Neutral | Last 90 days consensus direction |
✅ Quality profile supports the valuation
📊 Financial Snapshot
| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue ($M) | $28 | $45 | $47 | $50 | $51 |
| Rev YoY Growth | — | +60.4% | +5.2% | +5.9% | +1.9% |
| Gross Margin | — | — | — | — | — |
| EBITDA ($M) | $21 | $37 | $39 | $42 | $43 |
| EBITDA Margin | 75.5% | 82.4% | 82.2% | 83.8% | 83.8% |
| Operating Income ($M) | $13 | $24 | $25 | $27 | $27 |
| Operating Margin | 46.7% | 54.2% | 52.1% | 54.5% | 53.4% |
| Net Income ($M) | $11 | $22 | $25 | $26 | $26 |
| Net Margin | 40.0% | 48.8% | 51.9% | 52.1% | 51.5% |
| EPS (diluted) | $0.66 | $1.03 | $1.16 | $1.27 | $1.28 |
| Free Cash Flow ($M) | $27 | $37 | $40 | $43 | $42 |
| Annual DPS | $0.430 | $1.440 | $1.570 | $1.700 | $1.720 |
| Total Debt ($M) | $0 | $0 | $0 | $8 | $8 |
💹 Capital Return & Share Count Analysis
Net Share Change
+19.5% (2021→2025)
📈 Net dilution — issuances exceed buybacks
EPS Amplification
EPS grew +93.9% vs net income +134.4% over the period — -40.4pp of EPS growth diluted by share issuance.
| Year | Diluted Shares (M) | YoY Change | Buyback Spend ($M) | Buyback Yield |
|---|---|---|---|---|
| 2021 | 17.6M | — | — | — |
| 2022 | 21.8M | +24.1% | — | — |
| 2023 | 21.6M | -1.2% | $12 | 3.8% |
| 2024 | 21.0M | -2.7% | — | — |
| 2025 | 21.0M | +0.1% | — | — |
Share count declined from 21.81M (2022) to 20.99M (2025), a 3.8% reduction over 3 years driven primarily by a $11.8M buyback in 2023. No buybacks in 2024 or 2025. Management has prioritized dividend increases and balance sheet preservation over systematic repurchases.
📈 DDM Scenarios
$15
🔴 Bear
$16
📊 Base
$18
🚀 Bull
$14.50
Current Price
$16
Analyst Avg PT
| Scenario | Stage 1 (Yrs 1–5) | Stage 2 (Yrs 6–10) | Terminal g | Ke | Intrinsic Value | vs Price |
|---|---|---|---|---|---|---|
| 🔴 Bear | 0.5% | 1.0% | 1.0% | 12.50% | $15 | ▲2.1% |
| 📊 Base | 2.0% | 1.5% | 1.5% | 12.50% | $16 | ▲11.7% |
| 🚀 Bull | 3.0% | 2.5% | 2.0% | 12.50% | $18 | ▲21.5% |
📋 Full 10-Year Projection Tables
Bear Scenario
Stage 1: 0.5% | Stage 2: 1.0% | Terminal: 1.0%
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $1.729 | $1.537 | $1.54 |
| Year 2 | Stage 1 | $1.737 | $1.373 | $2.91 |
| Year 3 | Stage 1 | $1.746 | $1.226 | $4.14 |
| Year 4 | Stage 1 | $1.755 | $1.095 | $5.23 |
| Year 5 | Stage 1 | $1.763 | $0.979 | $6.21 |
| Year 6 | Stage 2 | $1.781 | $0.879 | $7.09 |
| Year 7 | Stage 2 | $1.799 | $0.789 | $7.88 |
| Year 8 | Stage 2 | $1.817 | $0.708 | $8.58 |
| Year 9 | Stage 2 | $1.835 | $0.636 | $9.22 |
| Year 10 | Stage 2 | $1.853 | $0.571 | $9.79 |
| Terminal | — | TV=$16.28 | PV(TV)=$5.01 (34% of IV) | $14.80 |
| Intrinsic Value | — | — | PV(Divs) $9.79 + PV(TV) $5.01 | $14.80 |
How the price per share is derived: Each year's projected dividend is discounted back at Ke (12.50%) to get its present value. After Year 10, dividends are assumed to grow at the terminal rate (1.0%) in perpetuity — the Gordon Growth formula gives a terminal value of DPS11 / (Ke − gT) = $16.28. That terminal value is then discounted back 10 years to today's dollars (PV of TV = $5.01). Intrinsic value = PV of all dividends ($9.79) + PV of terminal value ($5.01) = $14.80 per share.
Base Scenario
Stage 1: 2.0% | Stage 2: 1.5% | Terminal: 1.5%
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $1.754 | $1.559 | $1.56 |
| Year 2 | Stage 1 | $1.789 | $1.414 | $2.97 |
| Year 3 | Stage 1 | $1.825 | $1.282 | $4.26 |
| Year 4 | Stage 1 | $1.862 | $1.162 | $5.42 |
| Year 5 | Stage 1 | $1.899 | $1.054 | $6.47 |
| Year 6 | Stage 2 | $1.928 | $0.951 | $7.42 |
| Year 7 | Stage 2 | $1.956 | $0.858 | $8.28 |
| Year 8 | Stage 2 | $1.986 | $0.774 | $9.05 |
| Year 9 | Stage 2 | $2.016 | $0.698 | $9.75 |
| Year 10 | Stage 2 | $2.046 | $0.630 | $10.38 |
| Terminal | — | TV=$18.88 | PV(TV)=$5.81 (36% of IV) | $16.20 |
| Intrinsic Value | — | — | PV(Divs) $10.38 + PV(TV) $5.81 | $16.20 |
How the price per share is derived: Each year's projected dividend is discounted back at Ke (12.50%) to get its present value. After Year 10, dividends are assumed to grow at the terminal rate (1.5%) in perpetuity — the Gordon Growth formula gives a terminal value of DPS11 / (Ke − gT) = $18.88. That terminal value is then discounted back 10 years to today's dollars (PV of TV = $5.81). Intrinsic value = PV of all dividends ($10.38) + PV of terminal value ($5.81) = $16.20 per share.
Bull Scenario
Stage 1: 3.0% | Stage 2: 2.5% | Terminal: 2.0%
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $1.772 | $1.575 | $1.57 |
| Year 2 | Stage 1 | $1.825 | $1.442 | $3.02 |
| Year 3 | Stage 1 | $1.879 | $1.320 | $4.34 |
| Year 4 | Stage 1 | $1.936 | $1.209 | $5.55 |
| Year 5 | Stage 1 | $1.994 | $1.107 | $6.65 |
| Year 6 | Stage 2 | $2.044 | $1.008 | $7.66 |
| Year 7 | Stage 2 | $2.095 | $0.919 | $8.58 |
| Year 8 | Stage 2 | $2.147 | $0.837 | $9.42 |
| Year 9 | Stage 2 | $2.201 | $0.762 | $10.18 |
| Year 10 | Stage 2 | $2.256 | $0.695 | $10.87 |
| Terminal | — | TV=$21.92 | PV(TV)=$6.75 (38% of IV) | $17.62 |
| Intrinsic Value | — | — | PV(Divs) $10.87 + PV(TV) $6.75 | $17.62 |
How the price per share is derived: Each year's projected dividend is discounted back at Ke (12.50%) to get its present value. After Year 10, dividends are assumed to grow at the terminal rate (2.0%) in perpetuity — the Gordon Growth formula gives a terminal value of DPS11 / (Ke − gT) = $21.92. That terminal value is then discounted back 10 years to today's dollars (PV of TV = $6.75). Intrinsic value = PV of all dividends ($10.87) + PV of terminal value ($6.75) = $17.62 per share.
🔲 Sensitivity Table
| Ke \ gT | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 10.5% | $20 | $20 | $21 | $22 | $22 |
| 11.0% | $19 | $19 | $20 | $20 | $21 |
| 11.5% | $18 | $18 | $19 | $19 | $20 |
| 12.0% | $17 | $17 | $18 | $18 | $19 |
| 12.5% | $16 | $17 | $17 | $17 | $18 |
| 13.0% | $15 | $16 | $16 | $16 | $17 |
| 13.5% | $15 | $15 | $15 | $16 | $16 |
| 14.0% | $14 | $14 | $15 | $15 | $15 |
| 14.5% | $14 | $14 | $14 | $14 | $15 |
Green = >10% above current price. Red = >10% below. Gold = within ±10%.
📉 Long-Term Price Trend Channel
Log-linear trend fitted to full price history. ±1.5σ bands. Green shaded zone = bottom 25% of historical range — historically attractive entry.
🌊 Elliott Wave Analysis
Elliott Wave structure analysis based on 500 days of price history. Current position and wave progress help evaluate entry timing.
| Structure | Type | Span | Waves | Score | Rules |
|---|---|---|---|---|---|
| Impulse 1 | Impulse | $17.19 → $12.59 | 1→2→3→4→5 | 12.4 | R1:100 R2:100 R3:100 |
| Correction 2 | Correction | $12.59 → $13.57 | A→B→C | 3.7 | R1:100 R2:100 R3:100 |
| Impulse 3 | Impulse | $13.57 → $11.72 | 1→2→3→4→5 | 7.6 | R1:100 R2:100 R3:100 |
| Correction 4 | Correction | $11.72 → $15.30 | A→B→C | 6.7 | R1:100 R2:100 R3:100 |
| Impulse 5 (partial) | Impulse | $15.30 → $14.40 | 1 | 3.6 | R1:100 R2:100 R3:100 |
Current position: In Impulse 5, Wave 1
🏦 Comparable Valuation
| Company | Ticker | P/AFFO | P/FFO | EV/EBITDA | Div Yield | Notes |
|---|---|---|---|---|---|---|
| NewLake Capital | NLCP | 6.9× | 6.9× | 6.5× | 11.9% | Cannabis REIT, OTCQX |
| Innovative Industrial | IIPR | 13.1× | 13.1× | 15.8× | 6.4% | Cannabis REIT, NYSE |
| Realty Income | O | 15.2× | 15.2× | 18.6× | 5.5% | Net-lease REIT, S&P 500 |
| National Retail Prop. | NNN | 14.0× | 14.0× | 16.4× | 5.7% | Net-lease REIT |
| LTC Properties | LTC | 12.8× | 12.5× | 14.2× | 6.1% | Healthcare REIT, smaller |
| NLCP 3-yr avg | — | — | — | 8.0× | 10.5% | Historical median |
💰 Dividend / Distribution Analysis
| Metric | Value |
|---|---|
| Annual DPS | $1.720 |
| Current Yield | 11.87% |
| Consecutive Growth Years | 3 |
| 1-yr DPS CAGR | +1.2% |
| 3-yr DPS CAGR | +3.2% |
| 5-yr DPS CAGR | N/A |
| 10-yr DPS CAGR | — |
| Payout Ratio (DPS/EPS) | 82.3% ⚠️ |
| FCF Payout Ratio | 83.0% ⚠️ |
| Sustainability Verdict | Watch |
AFFO payout ratio of 82% provides moderate coverage. Cannabis tenant concentration (Ayr Wellness vacancies, Cannabist forbearance) creates earnings volatility. Quarterly DPS flat at $0.43 since Q2 2024 — watch for payout exceeding 90%.
🔮 Analyst Forecast Section
(a) EPS Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| 2022 | $1.03 | — | — | — | Actual |
| 2023 | $1.16 | — | — | — | Actual |
| 2024 | $1.27 | — | — | — | Actual |
| 2025 | $1.28 | — | — | — | Actual |
| 2026 | $1.25 | $1.35 | $1.45 | 2 | Estimate |
| 2027 | $1.30 | $1.42 | $1.55 | 2 | Estimate |
(b) Revenue Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| 2022 | $0.0B | — | — | — | Actual |
| 2023 | $0.0B | — | — | — | Actual |
| 2024 | $0.1B | — | — | — | Actual |
| 2025 | $0.1B | — | — | — | Actual |
| 2026 | $0.1B | $0.1B | $0.1B | 2 | Estimate |
| 2027 | $0.1B | $0.1B | $0.1B | 2 | Estimate |
(c) Individual Analyst Price Targets
| Analyst | Firm | Rating | PT | Upside |
|---|---|---|---|---|
| Imperial Capital | Imperial Capital | Buy | $16 | +10.3% |
| Compass Point | Compass Point | Neutral | $15 | +3.4% |
(d) Earnings Surprise History
| Quarter | EPS Act vs Est | EPS Beat/Miss | Rev Act vs Est | Rev Beat/Miss | Guidance |
|---|---|---|---|---|---|
| Q3 2025 | $0.31 vs $0.30 | +$0.01 ✅ | $12.8B vs $12.5B | +$0.3B ✅ | AFFO $0.51/share |
| Q2 2025 | $0.31 vs $0.30 | +$0.01 ✅ | $12.9B vs $12.6B | +$0.3B ✅ | AFFO $0.51/share |
| Q1 2025 | $0.31 vs $0.30 | +$0.01 ✅ | $12.8B vs $12.5B | +$0.3B ✅ | None |
| Q4 2025 | $0.29 vs $0.30 | $-0.01 ❌ | $12.6B vs $12.6B | $-0.0B ❌ | Q1 2026 DPS $0.43 |
(e) Confidence Band Commentary
Only 2 analysts cover NLCP (Compass Point and Imperial Capital). EPS estimates carry wide uncertainty. Finnhub EPS data for this OTC-listed name may not reflect normalized AFFO/share. Forward projections are largely model-derived given limited analyst coverage. AFFO/share ($2.09) is the more reliable REIT metric than GAAP EPS ($1.28).
💡 Investment Thesis
- Near-zero leverage (1.6% debt/assets) — NLCP's $7.6M in borrowings against $433M in gross assets is among the lowest leverage ratios in the REIT universe. This provides enormous financial flexibility and near-zero refinancing risk, a critical advantage during cannabis industry turbulence.
- 11.9% dividend yield at 82% AFFO payout — The yield is among the highest in the REIT sector, and the payout is well-covered by AFFO. Contractual rent escalators (2-3% annually) provide organic income growth even without new acquisitions.
- Catalyst: Cannabis rescheduling (Schedule III) — If finalized, rescheduling would remove IRC §280E tax burden from operators, significantly improving tenant creditworthiness and reducing NLCP's biggest risk factor — tenant default.
- Value trap risk: Tenant concentration and cannabis overhang — Ayr Wellness vacancies, Cannabist/PharmaCann forbearance, and OTC listing limit institutional demand. The stock trades at a significant discount to NAV ($18.88 book value/share) partly because of these structural headwats.
👔 Management Quality & Culture
CEO: Anthony Conigl · Tenure: Since 2009 (~17 yrs)
Net Insider Buys (12m)
+28,920 shares
Incentive Alignment
⚠️ Moderate
Compensation: Equity-based compensation present
CEO Background & Track Record
Board of Directors :: NewLake Capital Partners, Inc. (NLCP)
He joined Pangea Properties in 2009 as the company’s fifth employee and the Chief Investment Officer and took over as CEO in 2017. During Mr. Martay’s tenure at Pangea Properties, he has directly overseen the acquisition of
He joined Pangea Properties in 2009 as the company’s fifth employee and the Chief Investment Officer and took over as CEO in 2017. During Mr. Martay’s tenure at Pangea Properties, he has directly overseen the acquisition of
Management Team :: NewLake Capital Partners, Inc. (NLCP)
He was a recipient of United Hospital Fund’s 2018 Distinguished Trustee Award. Mr. Coniglio received a B.S. in Accounting and Finance from the State University of New York, College at Oneonta. Mr. Coniglio was a Certified Public Accountant
He was a recipient of United Hospital Fund’s 2018 Distinguished Trustee Award. Mr. Coniglio received a B.S. in Accounting and Finance from the State University of New York, College at Oneonta. Mr. Coniglio was a Certified Public Accountant
Team - NewLake Capital Partners, Inc.
Coniglio also serves as an Advisory Board Member, Speaker, Volunteer and Coach. Mr. Coniglio received a B.S. in Accounting and Finance from the State University of New York, College at Oneonta. Mr. Coniglio was a Certified Public Accountant
Coniglio also serves as an Advisory Board Member, Speaker, Volunteer and Coach. Mr. Coniglio received a B.S. in Accounting and Finance from the State University of New York, College at Oneonta. Mr. Coniglio was a Certified Public Accountant
Capital Allocation & Strategy
NewLake Capital Partners (OTCPK:NLCP) - Stock Analysis - Sim
Research NewLake Capital Partners' (OTCPK:NLCP) fundamentals, past performance, valuation, dividends and more.
Research NewLake Capital Partners' (OTCPK:NLCP) fundamentals, past performance, valuation, dividends and more.
Latest NLCP News - NewLake Capital Partners CEO Anthony Coni
Each quarterly distribution was $0.43 per share; the January 15, 2026 payment is taxable in 2025. ... NewLake Capital Partners (OTCQX: NLCP) announced that Anthony Coniglio, President and CEO, will present at the Sidoti Mic
Each quarterly distribution was $0.43 per share; the January 15, 2026 payment is taxable in 2025. ... NewLake Capital Partners (OTCQX: NLCP) announced that Anthony Coniglio, President and CEO, will present at the Sidoti Mic
Employee Ratings
Culture Signal
Mixed
Employee Review Excerpts
About Newlake Capital Partners Inc (NLCP) - Investing.com
Get an in-depth profile of Newlake Capital Partners Inc, including a general overview of the company's business and key management, as well as employee data and location and contact information.
Get an in-depth profile of Newlake Capital Partners Inc, including a general overview of the company's business and key management, as well as employee data and location and contact information.
NewLake Capital Partners, Inc. (NLCP)
NewLake Capital Partners is a leading provider of real estate capital to state-licensed cannabis operators. Founded in 2019, we are a triple-net lease REIT that acquires industrial and retail properties through sale-leaseback…
NewLake Capital Partners is a leading provider of real estate capital to state-licensed cannabis operators. Founded in 2019, we are a triple-net lease REIT that acquires industrial and retail properties through sale-leaseback…
Press Releases :: NewLake Capital Partners, Inc. (NLCP)
50 Locust Avenue New Canaan, CT 06840 · Main Office: (203) 594-1402 Email: info@newlake.com
50 Locust Avenue New Canaan, CT 06840 · Main Office: (203) 594-1402 Email: info@newlake.com
Sources: Finnhub insider data · Brave Search (Glassdoor, Indeed, Comparably, news) · Earnings surprise data from analyst forecasts · Qualitative signals are directional only.
⚖️ DDM Verdict: Strong Buy — NewLake Capital Partners (NLCP)
Current price: $14.50 | Analyst Avg PT: $15.50
$15
🔴 Bear
$16
📊 Base
$18
🚀 Bull
| Tier | Price | Action |
|---|---|---|
| Tier 1 — Starter | ≤$14 | Begin position |
| Tier 2 — Add | ≤$12 | Add on weakness |
| Tier 3 — Full | ≤$11 | Full allocation |
| Sell Alert | ≥$18 | Above fair value — consider trimming |
How tiers are set: Tier 1 = Base IV × 0.92 (8% discount to base case). Tier 2 = midpoint of Bear & Base IV (building on meaningful weakness). Tier 3 = Bear IV × 1.05 (just above worst-case — maximum margin of safety). Sell alert = Bull IV × 0.85 (15% discount to bull case — above fair value range).
Accumulate NLCP at current levels with a Base intrinsic value of $16.20. The 11.9% yield provides substantial income protection, and near-zero leverage eliminates balance sheet risk. However, tenant dislocations and OTC-listing illiquidity cap near-term upside. The stock becomes a Sell below $11 (AFFO yield >19%) if tenant defaults accelerate, and a Strong Buy only if cannabis rescheduling is finalized and all vacancies re-tenanted.
📂 Current Position Summary
| Metric | Value |
|---|---|
| Shares Held | 3,322 |
| Average Cost Basis | $15.20 |
| Current Market Value | $48,169 |
| Unrealized P&L | $-2,325 (-4.6%) |
| Annual DPS | $1.720/yr |
| Annual Dividend Income | $5,714/yr |
| Current Yield (at price) | 11.86% |
| Yield on Cost | 11.32% |
| vs Target (~$200K) | $48,169 / $200,000 (24%) |
🔧 Model Notes & Calibration
| Assumption | Rationale / Notes |
|---|---|
| Model Selection | DDM (3-stage) using DPS ($1.72/share) as base. For a high-payout REIT (82% AFFO payout), DPS is the appropriate base because investors receive DPS, not AFFO. Using AFFO would overstate intrinsic value by ~20%. The DPS-AFFO gap (18%) is captured by the retention rate contributing to modest balance sheet growth. |
| Ke Build (Cost of Equity) | CAPM Ke = 4.32% (Rf) + 0.81 (β) × 5.5% (ERP) = 8.77%. Cannabis REIT risk premium +3.73% applied for: (1) OTC listing / limited institutional access, (2) Schedule I regulatory overhang, (3) tenant concentration risk (top 3 tenants ~60% of ABR), (4) limited analyst coverage/illiquidity, (5) sector distress (Ayr Wellness bankruptcy). Adjusted Ke = 12.5%. |
| Growth Calibration | FY2025 AFFO growth was just 0.5% ($2.08→$2.09). DPS growth decelerated from 9.0% (2023) and 8.3% (2024) to 1.2% (2025). Contractual rent escalators (2-3%/yr) provide a floor, but tenant vacancies (Ayr Wellness 2 properties, Cannabist forbearance) offset organic growth. Base case 2.0% assumes escalators partially offset by vacancies. Cannabis rescheduling would be a significant catalyst improving tenant creditworthiness. |
| Terminal Growth | Bear 1.0% / Base 1.5% / Bull 2.0% — well below generic 2.5-3.0% terminal. Cannabis REITs face structural headwinds: limited institutional access, regulatory uncertainty, and tenant concentration. Even in the bull case, terminal growth capped at 2.0% given industry constraints. |
| Sanity Check | Base IV $16.20 vs analyst consensus PT $15.50 (range $15-$16) → +4.5%. P/AFFO at Base IV ($16.20/$2.09 = 7.7×) is well below peer median (IIPR 13.1×, O 15.2×), reflecting the cannabis/OTC discount. NAV discount is ~14% ($16.20 IV vs $18.88 BV/share). The model correctly values the high yield + low growth profile. |
| Dividend Sustainability | AFFO payout ratio of 82% is within REIT norms but leaves thin margin for error. Cannabis tenant risk (Ayr Wellness vacancies, Cannabist forbearance) could push payout above 90% in a stress scenario. Quarterly DPS has been flat at $0.43 since Q2 2024, indicating management is cautious about growth until vacancies are resolved. |
Bore Family Office • Analysis generated by Lurch • Not investment advice.