The cannabis industry has been a long time coming, but it’s finally starting to take off. With the legalization of marijuana in Canada and California, the industry is expected to continue its rapid growth.
The afc gamma news is a report on strong quarterly results for the cannabis industry. The company raised their dividend and plans to spend $1 billion over the next five years.
In the cannabis lending market, the AFCG stock is well positioned.
AFC Gamma Inc is largely unknown to most cannabis investors (NASDAQ:AFCG). This is due to the fact that it just became public in March.
However, due of the company’s unassuming name, several marijuana investors may miss AFC Gamma stock. It’d be a pity, given that “AFC” stands for Advanced Flower Capital.
And if you’re a marijuana business, money is crucial. Marijuana businesses find it difficult to get funds via conventional methods since the drug is still illegal on the federal level in the United States. Cannabis companies in the United States that are short on cash may either seek money at a lower value, negotiate with creditors, or sell their infrastructure and licenses.
This is when AFC Gamma Inc enters the picture. AFC Gamma is a major supplier of institutional loans to high-quality cannabis businesses in the United States. It is a real estate investment trust (REIT). (Source: AFC Gamma Inc, “Q2 2021 Earnings Presentation,” August 5, 2021.)
From production to processing to distribution, the firm provides financing to companies in all aspects of the marijuana sector.
To far, AFC Gamma has evaluated 344 transactions for a total of $6.7 billion. That isn’t to say that everyone is given a handout. AFC Gamma Inc has rejected 261 offers and is currently evaluating 65 others.
With $195.0 million in loans and a total of $237.0 million invested, the REIT has only financed 15 transactions. It also has $855.0 million in current transaction financing available.
That distinguishes AFC Gamma from Innovative Industrial Properties Inc., another famous cannabis real estate investment trust (NYSE:IIPR).
AFC Gamma offers loans and associated credit facilities, which are usually backed by significant assets, while Innovative Industrial Properties acquires property from medical marijuana businesses and leases it back to them.
AFC Gamma Inc’s loans usually feature amortization and/or cash flow sweeps, as well as substantial collateral and competitive pricing.
The loans provide yearly gross returns of about 12 percent to 20% on average.
BeLeaf Medical receives a $23 million credit facility.
AFC Gamma reported in late August that it had given BeLeaf Medical, LLC, a single-state Missouri operator, with a $23.0-million credit facility. (AFC Gamma Inc, August 31, 2021, “AFC Gamma Provides BeLeaf Medical, LLC With $23 Million Senior Secured Credit Facility to Fund Its Missouri Expansion.”)
The funds will be used to expand BeLeaf Medical’s three Missouri cultivation facilities, which are located in Lakefront, Jonesburg, and Cherokee, as well as to buy the Jonesburg facility.
The business has almost finished the building of 25,000 square feet of canopy and intends to add another 16,000 square feet.
Medical marijuana was approved in Missouri in 2018, with legal sales beginning in October 2020. Since then, sales in the “Show Me” state have topped $91.0 million, with more than 130,000 patients registered. Medical marijuana sales in Missouri are expected to reach $225.0 to $300.0 million for the entire year 2021.
Devi Holdings has been added to the credit facility.
AFC Gamma stated on September 13 that it has increased the size of its senior credit facility with Devi Holdings Inc. (doing business as Nature’s Medicines) by $30.0 million. (AFC Gamma Inc, September 13, 2021, “AFC Gamma Expands Existing Senior Secured Credit Facility With Devi Holdings, Inc. by $30 Million.”)
The company is headquartered in Phoenix, Arizona. In Arizona, Maryland, Michigan, Missouri, Pennsylvania, and Massachusetts, Nature’s Medicines runs marijuana growing and distribution facilities.
Nature’s Medicines will be able to use the credit facility to execute strategic acquisitions and grow its operations.
The increased credit facility now has a total value of $62.5 million, with an associate syndicating $10.0 million of it. A first-lien mortgage on all of Nature’s Medicines’ owned real estate and other commercial-security assets secures the loan.
Exceptional Q2 Results
AFC Gamma reported total interest income of $8.7 million for the second quarter ended June 30. It spent $3.6 million on total expenditures during the quarter. (AFC Gamma Inc, August 5, 2021, “AFC Gamma, Inc. Announces Financial Results for Quarter Ended June 30, 2021,” AFC Gamma Inc.)
The business earned $4.6 million in net profits, or $0.34 per share. It earned $5.8 million in distributable profits, or $0.43 per share.
The business closed on $71.3 million in new contract commitments in the second quarter and financed $77.8 million in new and existing obligations.
AFC Gamma Inc closed on $7.6 million in new commitments and financed $10.9 million in new and existing obligations as of August 31, the third quarter’s end.
“AFC Gamma has a best-in-class staff, solid balance sheet, and improved access to capital,” said Leonard Tannenbaum, CEO. Ibid.) (Source: Ibid.)
“As we enter the second half of 2021, we continue to see significant demand for money, and we think we are well positioned as a first mover and a leader in the fast expanding cannabis financing market,” he added.
The dividend on AFCG stock has increased.
One of the benefits of investing in a REIT is that it is required by law to distribute at least 90% of its taxable revenue in the form of dividends to its shareholders.
The board of directors of AFC Gamma declared a quarterly dividend of $0.43 per share of common stock, or $1.72 on an annual basis, for the quarter ending September 30. (Source: AFC Gamma Inc, “AFC Gamma Raises Quarterly Dividend,” September 15, 2021.)
This translates to an annual dividend yield of 8%.
In addition, the September quarterly payout marks a 13.2 percent increase over the $0.38 quarterly dividend paid in June.
StockCharts.com provided the chart.
AFC Gamma Inc, the only Nasdaq-listed supplier of institutional loans to the cannabis sector, is a financially sound business operating in a fast expanding addressable market.
The REIT targets loans with annual gross yields of about 12 percent to 20%, providing investors with an excellent risk-adjusted return on investment.
AFC Gamma stock also offers investors dependable, increasing, high-yield dividends due to its robust cash flow and first-mover advantage.
The afc gamma investor relations is a company that provides financial services to the cannabis industry. They reported strong Q2 results and raised their dividend.
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