The U.S. could potentially be looking to reclassify cannabis. Currently, cannabis is classed as a harmful substance.
However, President Trump has notified the market that he intends to reclassify the drug. This has led to a huge green surge in cannabis tickers in the market.
But the problem in the cannabis stock market – or god forbid, the crypto cannabis market – is the extraordinary risk. Most companies are not profitable and many have undergone massive equity dilution. Not to mention the market is saturated.
The benefits to the cannabis sector for reclassifying the drug remain significant.
So, how does one benefit from the potential rescheduling, avoid the traps of sub-par companies, and manage to earn a yield off of it whilst doing so? That could be Chicago Atlantic Real Estate Finance Inc (NASDAQ: REFI).
REFI’s 13%+ Yield
REFI is a REIT that seeks to provide investors with a yield-bearing asset with full exposure to the cannabis sector.
Despite REFI jumping massively since the mention from Trump on the reclassification of cannabis, the equity is still cheap from a P/E ratio standpoint at just 7.62.
Its yield currently stands at 13.5%. According to Dividend Max, the company pays out typically 4 times per year.
Plus, the stock is still trading at -30% off of its ATH. An ATH it should be added, which does not incorporate the highs of the 2020 cannabis rebound – due to the REIT beginning trading in 2022 – never mind the euphoria of 2018.
And whilst we are unlikely to see the highs of 2018 anytime soon, with a P/E ratio this low and a potentially seismic market shift underway, it is not an asset to be overlooked by any yield hunter today.
The Speculatour’s Disclosure: Not financial advice. No guidance is provided for any particular investor, asset prices can fall as well as rise. The Speculatour is not a licensed securities dealer, broker, investment bank or advisor.
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