Few cannabis stocks are in the position to pay dividends to shareholders, and the entire sector has seen valuations get crushed. For example, the AdvisorShares Pure US Cannabis ETF (NASDAQ: MSOS) is down 68% for the past 12 months.

Yet, there are a handful of cannabis companies that do pay dividends and for the most part, those disbursements have remained steady. In some cases, the dividends have even increased.

So if valuations have you as down as your portfolio, take heart that some companies have a strong commitment to their dividend game.

Steady dividend payers

Innovative Industrial Properties (NYSE: IIPR) last week announced that its board of directors declared a first-quarter dividend of $1.90 per share of common stock, representing an annualized dividend of $7.60 per common share. In 2023, the company paid roughly $1.80 per share.

Since its inception, IIP has paid more than $885 million in common stock dividends to its shareholders.

“The company has continued to execute, generating over $255 million of cash flow from operations and returning over $210 million to shareholders through dividends, continuing our track record of increasing our annual dividends each year since our inception in 2016,” Executive Chairman Alan Gold said during the company’s latest earnings call.

The announcement came despite ongoing challenges with one of its biggest portfolio holdings, PharmaCann. The two companies had announced an arrangement to address the MSO’s default, but according to a regulatory filing, it looks like PharmaCann hasn’t lived up to its promise to start paying its rent again.

Turning Point Brands (NYSE: TPB) declared a regular quarterly dividend of $0.075 per common share at the end of February. This was a 7% increase over the regular quarter dividend declared in November 2024. The company paid $0.07 per share in 2024. The dividend is payable on April 11 to shareholders of record on the close of business on March 21.

The company’s forward annual dividend yield, according to Yahoo Finance, is 0.52%. Alliance Global Partners is keeping its buy rating on the stock and increased its price target from $80 to $85.

Scotts Miracle-Gro Co. (NYSE: SMG) announced a cash dividend of $0.66 per share at the end of January. Despite the company’s struggles with the Hawthorne hydroponic subsidiary, the company has maintained a steady dividend. It has been paying the 66-cent dividend since 2022 and has a dividend yield of 3.4%.

SMG’s stock is only down 9.7% for the past 12 months, which compared to other cannabis stocks isn’t too disappointing. However, most of the company’s sales are in its home gardening division and not Hawthorne, which it plans to spin off.

Dividend drop

Advanced Flower Capital (NASDAQ: AFCG), which was formerly known as AFC Gamma, reported its earnings last week and told investors the dividend was dropping. The company declared a dividend of $0.33 for the fourth quarter, which was down from last year’s fourth-quarter dividend of $0.48.

InvestingPro reported that data shows, “The company maintains a significant 13.9% dividend yield, although dividend growth has declined by 31.25% over the last 12 months.”

AFC’s earnings caused analysts to drop price targets on the company, with Jefferies Financial Group downgrading shares from a buy rating to a hold rating with a $7 target price on the stock. That’s down from its prior target price of $10. Alliance Global Partners also lowered its price target to $10 from $13 and kept a Buy rating on the shares.

Other cannabis-adjacent companies that pay dividends include Altria Group, which had a substantial investment in Cronos Group. That company has an 8.3% dividend yield. Constellation Brands also has a big investment in Canopy Growth, and it has a dividend yield of 1.47%.

Privately held multistate operator Story Cannabis received a second cash infusion from Florida-based Advanced Flower Capital (Nasdaq: AFCG), formerly known as AFC Gamma, to the tune of $15 million, which it intends to use to fund more expansion in Ohio.

The loan – which was technically awarded to an Ohio-specific subsidiary of Arizona-based Story – comes less than half a year after AFC also loaned Story $41 million to build out operations in Maryland in October.

AFC CEO Daniel Neville said in a press release that Story has proven itself as one of the more creditworthy companies in the U.S. marijuana trade, with a team that has “consistently executed in a volatile cannabis market.”

The new $15 million loan was secured by the value of licenses held by Story in both Ohio and Georgia, along with real estate the company owns in both states, as collateral. The funds will be used to purchase and build out new dispensaries in Ohio, Story said in a release.

Story also has a footprint in New Jersey, according to the company website.

The cash infusion news comes at a time when capital has been scarce for U.S. cannabis companies, with more and more companies choosing to rely on debt financing over selling equity stakes. Those financial struggles have also hit home for AFC, which reported a sharp decline in cannabis industry income in the third quarter last year.

Cannabis real estate lenders are taking markedly different approaches to troubled credit and market headwinds lately, with some aggressively restructuring loans while others maintain a wait-and-see approach, according to earnings calls over the past week.

While broader real estate stocks rallied on the Federal Reserve’s latest rate cut, with the Real Estate Select Sector SPDR Fund seeing some gains this week, cannabis REITs are trying to balance tenant challenges against opportunities created by broader capital scarcity.

“There is, in some ways, not a cannabis market in the U.S. There’s 40 distinct relatively uncorrelated markets,” Chicago Atlantic Real Estate Finance (Nasdaq: REFI) CEO Peter Sack told analysts. The company, which has a $560 million pipeline, has methodically restructured its portfolio against rate risk, increasing fixed-rate protection from 24% to 52% since last year.

Those state-by-state dynamics are also playing out in real time through tenant struggles. Innovative Industrial Properties (NYSE: IIPR) reported a 1.7% revenue decline, to $76.5 million, and it had to dip into security deposits to cover rent from tenants including 4Front Ventures Corp. and Tilt Holdings, while also terminating its Temescal Wellness lease in Massachusetts.

Advanced Flower Capital (NASDAQ: AFCG) has taken a more proactive stance, aggressively working through troubled credits while positioning for what it terms “Cannabis 3.0” opportunities.

“Since last year, we made substantial progress exiting, restructuring or securing significant paydowns on seven key loans,” AFC CEO Daniel Neville said on that company’s analyst call, highlighting $150 million in capital repaid.

The political landscape further complicates those calculations. While Chicago Atlantic emphasized its conservative 7% Florida exposure is underwritten purely to medical market assumptions, AFC sees Republican electoral gains reshaping the broader funding environment.

“With the Republican sweep, we expect access to capital in the cannabis sector to remain scarce,” AFC President Robyn Tannenbaum said. Though President-elect Trump has shown some support for cannabis, she added that “broader cannabis legislation may not be the Republican administration’s top priority.”

Each REIT has also calibrated differently to rate movements. Chicago Atlantic maintained an 18.3% yield while boosting fixed-rate exposure, as AFC positioned 67% of its portfolio in fixed rates or above-market floors.

“We’ve decreased our portfolio exposure to additional interest rate cuts by approximately 28%,” Chicago Atlantic COO David Kite said.

Even workout strategies reflect the divergence. Where AFC has actively restructured troubled credits, NewLake Capital Partners reported 97% rent collection despite allowing Revolutionary Clinics to pay half of its obligations following a restructuring that brought in fresh capital and management.

For Chicago Atlantic’s Sack, the key is staying grounded in fundamentals: “We do not invest based upon the expectation of speculative political or regulatory events, and that principle is fundamental to our focus on comfortable debt service coverage, collateral quality and deep understanding of our limited license markets.”

When asked about competition from regional banks, AFC’s Neville pushed back on suggestions of easing conditions.

“More (banks) coming out or getting more cautious than are coming in,” he said, calling a recent high-profile loan “the exception rather than the rule.”

The mounting challenges mirror broader industry pressures, but Neville argued that specialized lenders maintain an advantage despite – or perhaps because of – the difficulties.

“Having the dedicated focus on cannabis, having both the top-down and the bottoms-up operating experience and having five, six, seven years of history in the industry is a really valuable asset for us,” Neville said. “And those without that type of specialization are generally taking a more cautious approach.”