PW - Power REIT makes progress in obtaining Michigan cannabis license

Power REIT ( NYSE: PW ) stock increased 1.7% in Friday after-hours trading after the real estate investment trust focused on greenhouses updated progress on its Michigan greenhouse cannabis licensing and posted Q2 results.

Q2 core FFO per share of $0.41 trailed the single analyst estimate of $0.44 and was unchanged from the previous quarter.

Since the REIT changed its focus to greenhouses, the company has acquired ~2.2M square feet of which ~51% is focused on food cultivation and 49% focused on cannabis cultivation.

It recently acquired a 1.1M square foot greenhouse for tomato cultivation, which the company believes was acquired at a deep discount to replacement cost, said CEO David Lesser.

Regarding delays in licensing its Michigan cannabis greenhouse, its single largest asset, Power REIT ( PW ) has agreed to dismiss one of two actions it filed against Marengo Township. The township has agreed to court ordered mediation to resolve the remaining issues. In the process, PW received a letter from township to satisfy a certificate of occupancy requirement by Michigan Cannabis Regulatory Authority.

The company still needs to get approval of the Michigan Bureau of Fire Services, "but there is no certainty as to the timing to complete the process." Due to the delays, PW has no income from the property during Q1 and Q2 2022.

Based on the lease rate in place, and assuming income is recognized on a straight-line basis, the incremental core FFO from this asset would be ~$0.38 per share per quarter.

In March, Power REIT entered into a lease amendment to fund additional capital improvements to its property in York County, Maine.

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