Innovative Industrial Properties (IIPR) is a REIT leasing space to cannabis operators, with a portfolio in 19 states. The company’s rapid growth model through sale-leasebacks is now facing pressure due to weakening cannabis market fundamentals. Tenant distress is a critical risk, with four tenants defaulting on leases in the past nine months. Financial implications suggest a potential dividend cut of 24-40%. Applying a 15% cap rate indicates over 30% downside from current levels. With limited re-leasing prospects, IIPR faces challenges ahead, making it a compelling short candidate. STAG Industrial, Inc. (STAG) remains strong amid e-commerce demand.

Read more at Yahoo Finance: Innovative Industrial Properties, Inc. (IIPR): A Bear Case Theory