U.S. IPO Week Ahead: The First REIT Play On The Cannabis Market

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Includes: IIPR
by: Renaissance Capital IPO Research

Only two deals are set to price in the week ahead, which comes as no surprise given the Thanksgiving holiday on Thursday. Looking further into the future, there are a few deals in the pipeline that could launch their deals the week after Thanksgiving, start trading and still make it home in time for the holidays.

IPO Pricings Week of November 21
Issuer
Business
Symbol
Exchange
Deal Size($m)
Market Cap($m)
Price Range
Shares Filed
Bookrunners
Innovative Industrial Properties
San Diego, CA
IIPR
NYSE
$175
$202
$20
8,750,000
Ladenburg Thalmann,
Compass Point
Newly-formed REIT focused on medical-use cannabis cultivation facilities.
Eagleline Acquisition
Radnor, PA
IGLEU
Nasdaq
$150
$188
$10
15,000,000
Stifel,
FBR Capital,
Stephens Inc.
SPAC formed by Formation Capital and focused on health care.
Click to enlarge
Click to enlarge


Innovative Industrial Properties (Pending:IIPR) is aiming to be the first publicly-traded REIT focused exclusively on cannabis cultivation facilities. The company does not currently own any properties, though it has a definitive purchase agreement for its first property, contingent on completion of the IPO, and a pipeline of five additional properties. While it is operating in an uncertain environment from a business model and regulatory standpoint, the company is positioned well to ride the wave of expanded medicinal and recreational cannabis use.

Eagleline Acquisition (IGLEU) is a SPAC formed in May 2016 by two of the principals from Formation Capital, Arnold Whitman and Steve Fishman, that will seek to acquire and operate a healthcare business. The company hopes to utilize the experience of its founders to identify properties; over the last two years, members of management have evaluated over 100 healthcare transactions and invested more than $300 million annually. We do not include blank check companies in our IPO stats.

IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. The Renaissance IPO Index is up 0.3% year-to-date, while the S&P 500 is up 6.7%. Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Alibaba (BABA) and Citizens Financial Group (CFG). The Renaissance International IPO Index is down 5.8% year-to-date, compared to -0.6% for ACWX. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include Recruit Holdings and Cheil Industries.