John SchroyerChicago Atlantic Real Estate Finance Inc. (Nasdaq: REFI) posted net income of $8.7 million in the first quarter of 2024, the Illinois-based cannabis real estate lender reported, down sequentially from $9.4 million.
The company’s net interest income, from its $401.3 million portfolio, was also down 10.8% to $13.2 million for the quarter from $14.8 million in the fourth quarter, which it said was “due to no prepayments and related fees received during the first quarter.” That contrasts with $1.8 million in prepaid fees in the final quarter of last year.
Despite the slight bumps in the road, CEO Peter Sack in a news release that said the firm’s cannabis investment portfolio has “demonstrated remarkable stability with the weighted average yield to maturity remaining above 19%.” He added that the company is continuing its “selective” choices for capital deployment.
“The originations pipeline is robust as operators look to take advantage of improving sentiment in the industry and pursuing growth in states such as Maryland, Missouri, and Ohio,” Sack said.
Chicago Atlantic is also eager to capitalize on the potential for federal cannabis rescheduling, Executive Chairman John Mazarakis said in a statement.
“Once enacted, the policy change is likely to bring significant benefits to the U.S. cannabis industry, including the elimination of punitive federal tax burdens, increased access to capital, and increased employment and investment opportunity to the expected benefit of our shareholders,” Mazarakis said. “While there is still uncertainty as to exactly how and when the rescheduling will conclusively take place, this report signals encouraging progress for the industry as a whole.”
As of March 31, Chicago Atlantic’s portfolio included 28 loans totaling $401.3 million, with a weighted average yield to maturity of 19.4%, the company reported in its latest financials. In the first quarter alone, the company issued $22.5 million in new loans, including to at least one new borrower and several existing clients.
Chicago Atlantic also issued another 896,443 shares during the first quarter, which raised $13.9 million in capital for the company.
The company announced $9.7 million in distributable earnings, which equated to 52 cents per weighted average common diluted share. On April 15, Chicago Atlantic paid out a quarterly cash dividend of 47 cents per share of common stock.
At the close of the quarter, Chicago Atlantic had $383.6 million in total assets, including $6.9 million in cash, against $97.6 million in total liabilities. Subsequently, as of May 7, the company reported $22 million in total liquidity, including a $19.2 million secured revolving credit facility.
