How Zoned Properties' Robust Growth Strategy is Generating Rapid Improvement in Diversified Revenue Potential
Finding and securing property in highly regulated industries like cannabis can be extremely challenging today. Business owners need to be strategic given the varying regulations and restrictions from state to state in the U.S., and even more so at the local level.
Zoned Properties (OTCQB:ZDPY), a full-service real estate development firm, is purpose-built to help cannabis operators navigate the nuance and complexity in real estate of this highly evolving and regulated industry. It is positioned to help businesses from the early stages of real estate projects like zoning, site identification, permitting and compliance to collaborating with property owners, architects, engineers and equipment vendors.
Zoned Properties’ primary role as a public company is to acquire, develop and lease these regulated properties positioning for investment returns. The company is wrapping up an $8 million expansion to its portfolio in Arizona funded by its primary tenant in the state, which will result in an increase in the annual portfolio revenue for the company — $1.2 to $1.7 million.
Bryan McLaren, CEO of Zoned Properties, spoke with Benzinga to discuss the company’s robust growth strategy that has positioned the company for is resulting in rapid development in diversified revenue.
Photo: Bryan McLaren
Major Gaps in Services for the Cannabis Space
“There are major gaps in services for the marketplace,” said McLaren. “For example, regulated cannabis companies need capital, insurance and real estate brokers that understand the nuance and intricacies of the industry. For many years, and even today, traditional professionals and firms have not been willing to work with cannabis, at least in a lot of places.”
To bridge the gap, Zoned Properties started building multiple growth divisions that could meet the needs of a cannabis operator as well as generate diversified revenue — and importantly allowing the company to improve its best practices, reputation, and ability to truly vet future investment targets and feeding its pipeline for property acquisitions and revenue growth.
McLaren’s vision is that when Zoned Properties works for a third-party client or it looks to invest in real estate in these regulated markets, the company should be able to enhance the value of that real estate and mitigate the risk by helping its clients, partners, and tenants or the regulated industry marketplace as a whole. In this case, cannabis companies.
Robust Growth Strategy
Zoned Properties has four growth divisions that McLaren thinks are the future of the company as it will help improve its positive cash flow. The increasing positive cashflow, in turn, will allow the company to continue to acquire and invest in regulated properties.
McLaren is confident that these growth divisions will not only be diversified revenue drivers on their own but will also become a catalyst to raise healthy capital that can help feed the pipeline of property acquisitions for Zoned Properties.
This way, the company does not have to wait for the organic cashflow to come from those growth divisions — resulting in large and healthy use of capital.
The four growth divisions include advisory services, brokerage services, franchise projects and proptech data projects.
As for advisory services, Zoned Properties helps clients develop cannabis projects by securing property, developing the project and sustaining profits.
Given that real estate transactions are extremely challenging in the regulated cannabis industry, the company built its own licensed brokerage services team in Arizona to directly assist clients through the process toward a successful transaction.
McLaren explained that the advisory and brokerage services were essentially developed as a way to serve third-party clients that require strategic guidance and consulting in real estate, one of the highest risk areas for clients looking to establish or expand their business operations.
Zoned Properties’ franchise services strategy was built on the belief that franchise organizations are strong drivers of real estate development and investment opportunities.
In January, the company partnered with a national cannabis retail dispensary, The Open Dør. Through its convertible debenture, Zoned Properties has the opportunity to convert its investment for up to a 33% equity stake in the franchisor organization.
The data project has two core focus points within the division.
- A zoning and GIS project to increase efficiency and find “green zone” properties for regulated operators in cannabis and later in other industries like gaming or psychedelics
- A data project to help drive consumer information so that it can push foot traffic to the retail brick-and-mortar locations
McLaren reveals that Zoned Properties has added focused investment and development into cross-pollinating services in its real estate projects to enhance the company’s value and mitigate risk.
“Our vision is to make regulated cannabis a strong, thriving and accepted industry in the marketplace and in our communities,” said McLaren. “I think that has really set the foundation for our company to be able to work on multiple projects — like our franchise, brokerage, and proptech data and software projects — so that there’s a level of trust in our network.”
Zoned Properties, Inc is a partner of Benzinga. The information in this article does not represent the investment advice of Benzinga or its writers.
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