Innovative Industrial Properties (IIPR +0.63%) is going to the stock market in order to drum up some funds. The company announced Thursday afternoon that it is floating an issue of 2 million shares of its common stock in a public offering.
Additionally, it will grant the issue's underwriters a 30-day option to buy up to 300,000 shares on top of the 2 million offered to the public.
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Innovative has not yet set a specific price or price range for the shares. The stock's most recent closing price was $79.45; at that level, the issue would raise gross proceeds of $158.9 million. It also has not set a date for this flotation, although the current prospectus -- which is marked "subject to completion" -- has a placeholder date of January 2020.
The company, a real estate investment trust (REIT) focused on properties for cannabis companies, said it will utilize its share of the proceeds to invest in real estate suitable for such businesses. It will also channel some of the funds into "general corporate purposes."
The new stock issue's book-running manager is privately held financial services company BTIG. Other members of the underwriting syndicate include Compass Point Research & Trading, and Ladenburg Thalmann Financial Services.
It's likely that Innovative's new share issue will stoke worries about stock dilution, a frequent and troubling occurrence with marijuana stocks. The company currently has roughly 13.6 million shares outstanding, meaning the 2 million coming to market will almost certainly have an effect on the stock's value.
Innovative stock closed down by nearly 3% on Thursday, and in after-hours trading had fallen another 4.2%.
