What happened

Shares of Innovative Industrial Properties (NYSE: IIPR)  rocketed nearly 50% higher last month, according to data provided by S&P Global Market Intelligence, after the real estate investment trust ( REIT ) boosted its dividend.

So what

On June 14, Innovative Industrial Properties raised its quarterly cash dividend by 33% to $0.60 per share. At its current share price of $130, that places IIP's annualized dividend yield at 1.8%.

Yet IIP's yield belies the incredible growth of its payout over its short life as a public company. IIP has increased its quarterly dividend four times since its initial public offering in December 2016. And the gains have been sizable; IIP's most recent raise represents a year-over-year increase of 140%.

Innovative Industrial Properties' investors can expect larger marijuana-fueled dividends in the coming quarters. Image source: Getty Images.

Now what

Wall Street has ratcheted up its price targets for Innovative Industrial Properties in recent weeks. Analysts are growing increasingly bullish on the REIT's business model, which includes acquiring facilities used to grow medical marijuana and leasing them to state-licensed growers.

The company's properties produce steady, recurring cash flow, which it passes on to shareholders via its fast-growing dividend. And as Innovative Industrial Properties acquires more properties to support the explosive growth of the marijuana market, investors can expect many more dividend increases in the years ahead.