Marijuana-focused real estate investment trust Innovative Industrial Properties (IIPR) is set to debut on the New York Stock Exchange on November 22, opening up another avenue of investment exposure to the budding industry. The recent win of President-elect Donald Trump and his subsequent cabinet appointments, however, may complicate an issue that previously enjoyed continued legislative progress under Barack Obama.

INNOVATIVE INDUSTRIAL IPO: Innovative Industrial Properties, whose executive chairman Alan Gold co-founded BioMed Realty (BMR) and Alexandria Real Estate (ARE), describes itself as a newly formed REIT focused on leasing industrial properties to "state-licensed operators for their regulated medical-use cannabis facilities." The company is offering 8.75M shares in its NYSE debut, which it expects to price at $20.00 per share. IIP currently owns no properties, but has identified a $30M New York industrial space as its initial investment. The company is also evaluating other facilities to purchase with its IPO funds, and has entered non-binding letters of intent for five properties valued at roughly $80M.

Explaining its near-term business opportunity in its IPO prospectus, IIP cites market researcher ArcView in forecasting legal marijuana sales jumping several hundred percent to roughly $22B by 2020, and says that "while we anticipate that future changes in federal and state laws may ultimately open up financing options that have not been available to date in this industry, we believe that such changes will take time, thereby creating an opportunity over the next few years to provide our sale-leaseback solutions to state-licensed industry participants that lack access to traditional financing."

TRUMP MARIJUANA STANCE: The Innovative Industrial IPO will follow the recent election of Donald Trump to the U.S. presidency on November 8, a day which also saw California, Maine, Massachusetts and Nevada legalize recreational marijuana usage, and Florida, Arkansas, North Dakota, and Montana pass medical marijuana efforts. Though campaign-trail promises often fail to coalesce into concrete policies, Trump appears more lenient on the issue than not, saying at a rally in October 2015 that "the marijuana thing is such a big thing. I think medical should happen, right? Don't we agree? I mean, I think so. And then I really believe you should leave it up to the states.

In terms of marijuana, and legalization, I think that should be a state issue." In a February appearance on Fox News, Trump added that "in some ways I think it's good and in other ways, it's bad. I do want to see what the medical effects are. I have to see what the medical effects are and, by the way -- medical marijuana, medical? I'm in favor of it a hundred percent." Trump's selection of staunch drug opponent Jeff Sessions as his proposed Attorney General, however, complicates those remarks; at a Senate hearing in April, Sessions stated, "We need grown-ups in charge in Washington to say marijuana is not the kind of thing that ought to be legalized, it ought not to be minimized, that it's in fact a very real danger.

This drug is dangerous. You cannot play with it, it's not funny, it's not something to laugh about.

Good people don't smoke marijuana." Sessions' nomination drew immediate reaction from pro-marijuana groups, with the Drug Policy Alliance remarking that "those who counted on Trump's reassurance that marijuana reforms 'should be a state issue' will be sorely disappointed," and the Marijuana Policy Project saying that "we would expect appointees who serve at the pleasure of the President to stick to the President's position on this subject. It would certainly be controversial if Sen. Sessions completely defied the President who appointed him." Meanwhile, without making specific mention to Trump or Sessions, Innovative Industrial Properties warns in its prospectus that "strict enforcement of federal laws regarding medical-use cannabis would likely result in our inability and the inability of our tenants to execute our respective business plans. New laws that are adverse to the business of our tenants may be enacted, and current favorable state or local laws relating to cultivation and production of medical-use cannabis may be modified or eliminated in the future."

OTHERS TO WATCH: Other publicly traded companies in the cannabis and cannabinoid space include GW Pharmaceuticals (GWPH) and Zynerba Pharmaceuticals (ZYNE).