Cannabis stocks have been on fire over the past year, but one company is flying under the radar. The United States Cannabis Index has outperformed its more well-known counterparts by double digits in 2019 and could continue to do so even after legalization of recreational marijuana kicks off in Canada and California later this year.
Zoned properties is a company that was founded in 2017. It is a U.S.-based cannabis company that has been ignored by the market and could double again.
It’s possible that ZDPY won’t be a penny stock for much longer.
Zoned Properties Inc (OTCMKTS:ZDPY) is an underappreciated marijuana investment that has quietly outperformed the market.
Best of all, it’s an ancillary marijuana stock, which means it doesn’t cultivate marijuana. This makes it an excellent choice for investors who are hesitant to engage directly in the cannabis sector.
As of this writing, the stock of Zoned Properties has increased by:
- Over the previous three months, there has been a 54 percent increase.
- Year-to-date, 110 percent
- Year-over-year growth of 165 percent
No matter how you look at it, they are incredible increases.
Despite these significant changes, ZDPY stock is a penny stock, so you may not have heard of it. Zoned Properties stock is now trading at $0.90 per share as of this writing.
And we all know what Wall Street thinks of penny stocks: they’re dodgy investments with a justification for being penny stocks.
However, this rationale does not apply to Zoned Properties Inc. The firm, which is situated in Arizona, has been growing at a double-digit rate and is profitable. It also has a track record of good cash flow and operating income.
StockCharts.com provided the chart.
Zoned Properties Inc is a real estate investment trust.
Zoned Properties is a real estate development company that assists cannabis businesses in navigating the complex and highly regulated world of legal marijuana. Zoned Properties has carved itself a place in the market. (Source: Zoned Properties Inc, “Investor Presentation: August 2021,” last visited October 13, 2021.)
Try cultivating legal cannabis if you thought filing your taxes was difficult. The burgeoning marijuana business in the United States is heavily regulated and mostly governed by municipal zoning and permitting laws. There are around 39,500 local governing bodies in the United States that have jurisdiction over where a licensed cannabis operation may operate.
There are two main methods for a business to earn from marijuana real estate.
The first is capital finance, which is usually provided by a real estate investment trust (REIT), such as Innovative Industrial Properties Inc. (NYSE:IIPR). In return for loans or rent, a REIT functions as a bank. Innovative Industrial Properties, for example, acquires property from cannabis businesses and rents it back to them.
The provision of services is the second option to earn from cannabis real estate. Zoned Properties Inc is a company that specializes in this. The firm offers counseling, brokerage, franchising, and data on property technologies.
In essence, it offers all of the services that a cannabis firm would need to construct real estate projects.
The benefit of operating as a “quasi-REIT” is that Zoned Properties Inc may reinvest more of its money in its operations while avoiding many of the requirements that REITS must adhere to, such as the obligation to return the overwhelming majority of profits to investors as dividends.
Zoned Properties Inc has over 15 years of expertise in program development and six years of experience in the cannabis industry. In the regulated marijuana business, it has consulted on over 100 projects.
Cultivation Facility in Arizona Expands Significantly
Zoned Properties Inc revealed in August that it had amended a leasing agreement with a tenant at their cultivation site in Chino Valley, Arizona. The move boosts Zoned Properties’ rental income and cash flow dramatically. (Source: Business Wire, August 24, 2021, “Zoned Properties Announces Completion of $8 Million Expansion at Its Chino Valley Cultivation Facility.”)
The tenant has put more than $8.0 million into the property thus far. Throughout the rest of the lease term, the tenant retains master rights to the property and amenities.
The Chino Valley facility’s operating area rose from 40,000 to 67,512 square feet on September 1, and the new basic rental payments climbed by 68 percent, from $32,800 to $55,195 per month.
The yearly basic rental payments will climb by 143 percent, from $393,600 to $957,550, after phase one of the expansion is completed.
“The increased demand for regulated marijuana production space and consumer goods in Arizona has gone well beyond original expectations as a consequence of the newly authorized and implemented adult-use marijuana program,” said Bryan McLaren, CEO of Zoned Properties Inc. Ibid.) (Source: Ibid.)
“Industry analysts estimate that consumer demand in Arizona might rise over $1 billion in the next several years, necessitating an increase in the cultivation quota,” he stated.
Exceptional Q2 Results
Zoned Properties Inc said that revenue for the second quarter ended June 30 climbed by 83 percent year over year to $550,064. (Source: Business Wire, August 12, 2021, “Zoned Properties Reports Second Quarter 2021 Financial Results.”)
In the second quarter of 2021, the firm earned $112,594 in net income, or breakeven per diluted share, compared to a net loss of $18,927 in the second quarter of 2020.
The income from operations of Zoned Properties Inc was $139,653, up from $9,753 in the second quarter of 2020. It generated $284,408 in net cash from operations in the six months ended June 30, 2021, compared to $72,232 in the same period the previous year.
Zoned Properties Inc had $1.0 million in cash on June 30, 2021, compared to $699,335 on December 31, 2020.
“The shift of legacy cannabis businesses into a regulated cannabis marketplace has been taking place at a size and speed that most data estimates among industry experts have failed to account for,” McLaren said. Ibid.) (Source: Ibid.)
“This is such an exciting moment for the regulated cannabis sector as a whole, and our team at Zoned Properties is delighted to be helping to evolve commercial real estate development techniques for burgeoning and highly regulated industries,” says the company.
Zoned Properties stock is an undervalued cannabis penny stock in the United States, but that may not last long. The firm has been producing excellent financial performance, raising a healthy quantity of cash, and investing it in intriguing investment possibilities.
Investors are optimistic about Zoned Properties Inc’s long-term prospects, as seen by the stock price more than tripling in the previous year.
The “tcnnf stock” is a company that has seen its shares increase by more than 1,000% over the past year. The company also has a market cap of $4 billion and it could double again.
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