Advanced Flower Capital Cuts Dividend 35% After Loan Loss Impact

Advanced Flower Capital Inc. (NASDAQ: AFCG), a real estate investment trust specializing in loans to state-licensed cannabis operators, announced a significant cut in its second-quarter dividend to $0.15 per share from $0.23 in the first quarter, reflecting a realized loss related to a loan to an unnamed public company. The dividend, payable on July 15, 2025, to shareholders of record as of June 30, led to an 11% decline in AFCG's stock price, which has dropped about 39% year-to-date. Despite the dividend cut, analysts maintain an overall "Outperform" rating on the stock with an average price target suggesting potential upside, although one valuation model indicates a slight downside risk. AFCG’s Board evaluates quarterly dividends based on Distributable Earnings, a non-GAAP measure designed to reflect current loan activity excluding certain adjustments, and the company remains committed to distributing at least 90% of its taxable income as dividends to comply with REIT requirements. The management emphasizes its expertise in underwriting and managing loans secured by real estate and license value within the cannabis sector, aiming to sustain shareholder returns amid operational challenges. Investors will be closely watching how AFCG navigates these difficulties and whether it can regain momentum in a volatile market segment.