Zoned Properties (ZDPY) released a company presentation on Monday that shows that the company has moved from an annual loss of $501,576 in 2016 to a year-to-date gain of $1 million. Zoned Properties develops and leases properties in emerging industries, including licensed medical marijuana.
The company is coming from a position of strength uncommon among many pot stocks with a solid balance sheet of $9.6 million in assets and $2.2 million in liabilities, but no warrants and no convertible debt. The company currently has six properties in its portfolio with five locations in Arizona and one in Colorado.
Part of the turn in fortunes for Zoned Properties for 2017 was the one-time net gain from the sale of a property in Tempe Arizona for $831,753. The book value for the company as of June 30 is $9.4 million and the market value is $23.7 million.
The stock though hasn’t performed as well as the company’s balance sheet. It has plunged 48% over the past year from a 52-week high of $3.88 to a low of 50 cents. The stock started to recover following the company’s second-quarter earnings release in August. In that release, the company noted that its revenue had increased 23% to $505,000 from the previous year’s second-quarter earnings of $410,000. Operating expenses also declined 32% to $355,000 from the previous year’s second quarter expenses of $524,000. The net income was also positive at $118,000 versus the previous year’s loss of $173,000.
Zoned also announced last week that it increased the space being leased by its tenant in Tempe Arizona. “Expansion at the Tempe Property will drive increased revenue and profitability in the coming quarters as increased monthly rent payments take effect,” commented Bryan McLaren, Chief Executive Officer of Zoned Properties. “Our anchor tenant now occupies more than 50% of the 60,000 square feet of total rentable space under long-term lease agreements with guaranteed rent escalators throughout their terms.”
So, while Zoned Properties is humming along in the Arizona market, some investors may be wanting to see if they’ll be expanding beyond the state and pursuing properties in other bigger markets. The real estate space in the cannabis industry is becoming crowded very quickly. It may be that the stock will respond as Zoned expands their footprint further away from the Arizona market.