May 13, 2025

Interview With Chicago Atlantic Real Estate Finance: A Unique Play On Cannabis Lending

Excerpt from High Yield Landlord

^{Jussi Askola, CFA – May 9, 2025}

We typically don’t cover mortgage REITs (mREITs) at High Yield Landlord.

Why? Most mREITs are deeply sensitive to unpredictable macroeconomic variables like interest rates and spread volatility. Many are also heavily leveraged and suffer from misaligned incentives due to external management structures. Historically, that has translated into a high-risk, low-reward proposition for investors.

But today, we’re making an exception.

We are highlighting Chicago Atlantic Real Estate Finance (REFI). It’s a mortgage REIT, yes—but it may be the rare breed that’s worth considering. Since its IPO, REFI has consistently outperformed peers and carved out a niche in cannabis real estate lending, a sector still underbanked due to regulatory hurdles.

We recently spoke with REFI’s co-CEO, Peter Sack, to better understand what makes their model tick. Our interest was piqued not only by their impressive results but also because we already hold a stake in NewLake Capital Partners (NLCP), an equity REIT in the cannabis space. Understanding the lender’s side provides a fuller picture of the sector.

We’re not ready to invest in REFI just yet, but we are intrigued—and will be following it closely. The company is currently trading at just 8x FFO and offers a 14% dividend yield.

Here are the three main takeaways from our conversation with REFI’s CEO:

1. Better Risk-to-Reward Profile Than Most Other mREITs

Read the full article here: High Yield Landlord