Innovative industrial properties (IIPR -10.51%) released its latest quarterly numbers after hours on Wednesday, and investors reacted accordingly on Thursday. Unfortunately, this reaction was negative, with the market driving down the stock’s value by almost 11%. The barometer S&P500 the index, on the other hand, landed in positive territory with a gain of 0.7% on Thursday.

The third quarter figures created a buzz

Innovative, a highly specialized real estate investment trust (REIT) that focuses on properties used by cannabis industryrevealed its third quarter figures. These showed that the company had revenue of $76.5 million for the period, down almost 2% from $77.8 million in the same quarter of 2023. It also missed analysts’ consensus forecast of $77.4 million.

Net income also declined, falling to $39.7 million ($1.37 per share) from last year’s profit of $41.3 million. Tipsters who follow innovative stocks were expecting $1.45 per share. Meanwhile, adjusted funds from operations (AFFO), the most critical profitability metric for REITs, has also headed south. This was $64.3 million compared to $64.8 million in the third quarter of 2023.

In its earnings release, Innovative attributed its revenue decline primarily to a $3 million drop in rent and property management fees.

Buying opportunity

Another factor explaining the sell-off of innovative stocks was timing. The results were released very shortly after Election Day, during which several marijuana legalization initiatives were rejected by voters, notably in the populous state of Florida.

To many, cannabis just doesn’t seem like a good investment right now, but I think it presents a good opportunity to buy innovative stocks. The company is one of very few marijuana REITs available anywhere, and despite electoral setbacks, at some point this country is destined to actually legalize the drug. I would seriously consider getting innovative products due to the lower prices.