Few cannabis stocks are in the position to pay dividends to shareholders, and the entire sector has seen valuations get crushed. For example, the AdvisorShares Pure US Cannabis ETF (NASDAQ: MSOS) is down 68% for the past 12 months.
Yet, there are a handful of cannabis companies that do pay dividends and for the most part, those disbursements have remained steady. In some cases, the dividends have even increased.
So if valuations have you as down as your portfolio, take heart that some companies have a strong commitment to their dividend game.
Steady dividend payers
Innovative Industrial Properties (NYSE: IIPR) last week announced that its board of directors declared a first-quarter dividend of $1.90 per share of common stock, representing an annualized dividend of $7.60 per common share. In 2023, the company paid roughly $1.80 per share.
Since its inception, IIP has paid more than $885 million in common stock dividends to its shareholders.
“The company has continued to execute, generating over $255 million of cash flow from operations and returning over $210 million to shareholders through dividends, continuing our track record of increasing our annual dividends each year since our inception in 2016,” Executive Chairman Alan Gold said during the company’s latest earnings call.
The announcement came despite ongoing challenges with one of its biggest portfolio holdings, PharmaCann. The two companies had announced an arrangement to address the MSO’s default, but according to a regulatory filing, it looks like PharmaCann hasn’t lived up to its promise to start paying its rent again.
Turning Point Brands (NYSE: TPB) declared a regular quarterly dividend of $0.075 per common share at the end of February. This was a 7% increase over the regular quarter dividend declared in November 2024. The company paid $0.07 per share in 2024. The dividend is payable on April 11 to shareholders of record on the close of business on March 21.
The company’s forward annual dividend yield, according to Yahoo Finance, is 0.52%. Alliance Global Partners is keeping its buy rating on the stock and increased its price target from $80 to $85.
Scotts Miracle-Gro Co. (NYSE: SMG) announced a cash dividend of $0.66 per share at the end of January. Despite the company’s struggles with the Hawthorne hydroponic subsidiary, the company has maintained a steady dividend. It has been paying the 66-cent dividend since 2022 and has a dividend yield of 3.4%.
SMG’s stock is only down 9.7% for the past 12 months, which compared to other cannabis stocks isn’t too disappointing. However, most of the company’s sales are in its home gardening division and not Hawthorne, which it plans to spin off.
Dividend drop
Advanced Flower Capital (NASDAQ: AFCG), which was formerly known as AFC Gamma, reported its earnings last week and told investors the dividend was dropping. The company declared a dividend of $0.33 for the fourth quarter, which was down from last year’s fourth-quarter dividend of $0.48.
InvestingPro reported that data shows, “The company maintains a significant 13.9% dividend yield, although dividend growth has declined by 31.25% over the last 12 months.”
AFC’s earnings caused analysts to drop price targets on the company, with Jefferies Financial Group downgrading shares from a buy rating to a hold rating with a $7 target price on the stock. That’s down from its prior target price of $10. Alliance Global Partners also lowered its price target to $10 from $13 and kept a Buy rating on the shares.
Other cannabis-adjacent companies that pay dividends include Altria Group, which had a substantial investment in Cronos Group. That company has an 8.3% dividend yield. Constellation Brands also has a big investment in Canopy Growth, and it has a dividend yield of 1.47%.
Despite the headwinds facing the cannabis industry, some companies have managed to hold steady with dividends. Read More
