Innovation Industrial Properties, Inc. (IIPR) is a marijuana bank伪装成 a REIT. The company's business model involves selling property to marijuana producers in exchange for long-term lease agreements that generate cash flow to repay the loans. However, IIPR's largest tenant, Parallel, has recently been accused of securities fraud and has a high risk of defaulting on its lease payments. If Parallel defaults, IIPR's property values will likely decrease significantly, leading to a drop in rental income of around 70%. Additionally, IIPR's business model is vulnerable to loss of income due to the difficulty of finding new tenants to replace those who default on their lease payments. The recent lawsuits against Parallel indicate that the company is in a dire situation and is facing imminent lease default risk. Overall, the risks associated with IIPR's business model and largest tenant make it a risky investment.
