Innovative Industrial Properties: The Bull Case Is Tempting, But It's Not For Me

Innovative Industrial Properties remains a Hold due to worsening AFFO dividend coverage and ongoing tenant distress. Despite a 23.5% share price appreciation, Q2 2026 revenue and AFFO declined by 5% and 2.7%, respectively, compared to Q4, with the payout ratio rising to 104%. IIPR's tenant diversification has improved, reducing bankruptcy risk, but occupancy has trended down to 95.8%. Federal cannabis rescheduling is a key potential catalyst, but its timing and impact remain uncertain, keeping me on the sidelines.

Introduction Back in February I wrote about Innovative Industrial Properties Trust (IIPR) again. Covering the company and, more specifically, the Q4 2025 results. I remained cautious on IIPR's common stock due to the fact that tenant