Zoned Properties Announces 171% Revenue Growth

Zoned Properties®, Inc. (OTCQB: ZDPY), a leading real estate development firm for emerging and highly regulated industries, including legalized cannabis, today announced its financial results for the quarter ended March 31, 2022.

First Quarter 2022 Financial Results

• Revenues were $938,701 for the quarter ended March 31, 2022, compared to $345,845 for the quarter ended March 31, 2021, an increase of 171.4%.
• Operating expenses were $929,183 for the quarter ended March 31, 2022, compared to $389,213 for the quarter ended March 31, 2021, an increase of 138.7%.
• The Company reported a net loss of $25,696 for the quarter ended March 31, 2022, as compared to a net loss of $71,335 for the quarter ended March 31, 2021.
• The Company had cash of $787,918 as of March 31, 2022, compared to $1,191,940 as of December 31, 2021, primarily reflecting $500,000 of cash used for a tenant improvement investment related to expansion at its Chino Valley Cultivation Facility.

“I am so impressed by our team, these key results and the culture we are building at Zoned Properties, which has resulted in such a great first quarter. As we continue to expand the Company through recruitment, partnerships, and strategic investments we are working to bring together an increasingly diverse group of experts with skillsets focused on cannabis real estate development,” commented Bryan McLaren, Chief Executive Officer of Zoned Properties. “Our team established an aggressive framework for national expansion in 2022. The efforts are just starting to reflect in our quarterly results, which are focused on diversified revenue growth while maintaining healthy cash flow from operations.”

“We are putting our full-spectrum of integrated commercial real estate services into action. With strong momentum and proof of concept, we believe we have a clear pathway to national growth and scalability,” commented Berekk Blackwell, Chief Operating Officer of Zoned Properties. “We expect property technology to become the catalyst for scaling our commercial real estate services nationally, which we believe can unlock an exciting pipeline of property acquisitions to expand our property investment portfolio.”

Management Discussion and Company Highlights

• Zoned Properties has developed a full spectrum of integrated growth services to support its commercial real estate development model; the Company’s Property Technology (“PropTech”), Advisory Services, Commercial Brokerage, and Investment Portfolio collectively cross-pollinate within the model to drive project value associated with complex real estate projects.
  • Zoned Properties Property Technology: PropTech platforms have the opportunity on a national scale to bring service and data solutions to complex markets such as regulated cannabis. Zoned Properties has partnered with premier real estate zoning experts at Zoneomics to solve one of the biggest challenges in cannabis real estate: how to identify zoned properties that can be permitted and authorized for cannabis operations. The project team officially launched is REZONE Beta platform into the marketplace in April 2022. Under the brand, “Rezone”, the PropTech data platform will focus on democratizing commercial real estate intelligence, providing hundreds of thousands of service professionals, business operators, and real estate investors with the data and information they need to successfully develop regulated real estate projects.
  • Zoned Properties Advisory Services: The Company has been expanding its advisory services team nationally to strengthen the Zoned Properties network and our best practices, specializing in commercial real estate solutions for the regulated cannabis industry. Since inception, the advisory team has served clients in 10+ states, across 100+ projects, creating $400,000+ in advisory revenues.
  • Zoned Properties Commercial Brokerage: We created our own in-house licensed brokerage in June 2021. Since inception, the brokerage team has served clients in multiple states, closing over $50 million worth of real estate transactions, and has now been engaged on listings for over 1.5 million square feet of commercial real estate for cannabis dispensaries, cultivation, processing, and warehouse facilities across the nation. The brokerage team is implementing a growth strategy to establish Zoned Properties brokerage offices in new state markets and further strengthen existing brokerage partnerships creating access to service the national cannabis marketplace.
  • Zoned Properties Investment Portfolio: Zoned Properties owns properties within its of investment portfolio that are leased to regulated cannabis operators. The Company has achieved a stabilized property portfolio that produces $1.83 million annually in triple-net, passive rental revenue as of March 2022, and is expected to yield over $30 million in cash flow over the life of the contracted lease terms.
    • Chino Valley Cultivation Facility, Arizona: Property expansion has included more than $8 million of capital investment by the Company’s significant tenant at the Chino Valley Cultivation Facility, significantly increasing operational size and rental revenue for Zoned Properties. Effective March 1, 2022, Zoned Properties provided the Company’s significant tenant with an initial tenant improvement allowance of $500,000 to advance the Chino Valley project toward the next phase of expansion. In exchange, the base rent rate under the Chino Valley lease agreement increased from $0.82 per square foot monthly to $0.90 per square foot monthly over the life of the lease term, equating to $1.05 million annually.
    • Open Dør Dispensaries Franchise Investment: As part of the Company’s commercial real estate strategy, Zoned Properties has invested in and partnered with a national cannabis retail franchisor, Open Dør Dispensaries, which has been vetting prospective investment partners and franchisees from across the country to target new franchise locations for existing and upcoming regulated cannabis markets. Zoned Properties can benefit both directly and indirectly from any growth achieved by Open Dør Dispensaries. As an investor, the Company will receive a percentage of initial franchise fees and renewal fees, and as the commercial real estate partner, the Company is positioned to provide commercial real estate services and investments for franchise real estate locations.