2023 is New York’s year for cannabis – at least that is what we are being told. It has nearly been two years since the state voted in legalized recreational use and sale, but the state has been very slow in getting processing facilities and dispensaries up and running, with only three of the 66 licensed establishments in operation as of the end of February. It is no secret that New York has the potential to be one of the largest cannabis markets in the world. This year alone, New York City is expecting over 50 million visitors – many of them looking to buy legal weed. 

Everyone can see the value that New York will bring to the industry, but why does it feel like they are dragging their feet to bring something to the table? 

It appears that the state may have bit off more than it can chew. 

A lack of understanding of the complexities of securing commercial cannabis real estate combined with the fact that raising necessary capital has been slow-moving, has made it so that cultivators now have too much supply with no means of distribution to meet the demand. 

Good intentions, slow follow-through 

The guiding social equity program behind New York’s retail licensing system is a giant leap forward within the cannabis industry to bring up those directly affected by the failed war on drugs. The Cannabis Adult-Use Retail Dispensary (CAURD) licenses are aimed at prioritizing these underserved communities and awarding licenses to those who have been convicted of marijuana-related crimes, or have a direct family member that has been charged, with the opportunity to open retail locations. Nonprofits that work directly with these communities have a chance at obtaining licenses as well. 

One of the most enticing things about these licenses is that the Dormitory Authority of the State of New York (DASNY) has been tasked with finding storefronts for entrepreneurs who have been granted licenses and even build them out for them. To do so, the state has contracted 10 firms to design and construct each dispensary. But again, the state has been very slow in getting dispensaries up and running. It seems that DASNY has discovered the reality that finding landlords willing to lease to a cannabis business may be more daunting than expected. 

This only adds to the sense of urgency that has lingered in the air for the last two years. Businesses are ready to get up and running just to play catch up to the underground market that is thriving across New York City’s boroughs. Currently, New York has estimated that there are roughly 1,400 unlicensed retailers operating in the city. Unregulated sales mean that weed has the potential of going to underage kids, being tainted and it is all ultimately going untaxed. New Yorkers and the state are hurting due to the delayed rollout, but there is still time to change things around.

Since spaces are limited for license holders waiting on DASNY to figure out the real estate landscape, the state has started to give licensees the option to go out on their own to secure a location for the sake of being one of the first to the legal market. 

The problem is that this good news comes with a caveat. If a licensee decides to break out on their own, they will be forgoing their share of the $200 million public-private fund that DASNY has budgeted to help with operating costs. This fund is essentially a state loan that each retailer will have to pay back, including interest. But the problem is that DASNY has not yet raised the necessary funds to dole out to retailers – the only amount that the public is aware of is the $50 million that the state provided. 

So, the million dollar questions are, do these entrepreneurs take a chance to be first to the scene? Or do they trust that the money and real estate issues will work themselves out? 

It is hard to say. But what we do know is that there are new cultivating and processing licenses being secured this year as well, and a huge backlog of weed in storage, so there will be no lack of product once the doors to the public open up – right now, it is just a matter of time. 

So maybe NYC should get out of its own way, put a bit more “market” in the cannabis market, and let 1,000 blossoms bloom! 

Andrew Kaye has been involved in all aspects of the financial services industry, as a fund portfolio investment manager, investment banker, family office investor and attorney.  He has worked with start-ups on their first raise through global enterprises undertaking billion-dollar stock offerings, and has significant investment experience in the cannabis industry. Currently, Andrew works as Sweet Leaf Madison Capital’s Chief Commercial Officer. Lending his expertise toward the creation of middle market financing solutions for real estate and equipment financing needs in the cannabis space.”

“Sweet Leaf Madison Capital provides non-dilutive, asset-based lending solutions to the underserved middle market of the cannabis industry by originating real estate loans, equipment financing, securitized term loans, and more for entrepreneurs and businesses. The company is based in Denver, Colorado and has offices in New York City and West Palm Beach, Florida. To learn more or complete a loan application, visit Sweet Leaf Madison Capital online, or continue the conversation on LinkedIn, Twitter and Facebook.”

Andrew J. Kaye is Chief Commercial Officer of Sweet Leaf Madison Capital. He can be reached at akaye@sweetleafmadison.com.

Environmental, Social, and Governance (ESG) initiatives are central to the evolving business landscape as more organizations dedicate resources to amplify their social impact, execute on purpose-driven goals, and ultimately create long-term value.  

Pressure from stakeholders and shareholders has been instrumental in transforming how organizations are planning for the future. In the Accenture Future of Work Study 2021, 65% of employees believe organizations should be responsible for leaving their people “net better off” through work and 71% of consumers believe ethical corporate practices and values are an important reason to choose a brand. But even beyond this shift in demand for company transparency and a more defined investment in communities from corporations, ESG reporting will soon be a necessity for public companies and a variety of financial organizations. 

The Securities and Exchange Commission’s climate-related disclosure earlier this year is a major shift in how companies will be structured requiring corporate entities to proactively integrate ESG into their business model. 

Though the proposed rules will most likely lead to legal challenges, accepting the realities of where global business stands today and the environmental issues communities are facing should be at the forefront of every cannabis business, whether they are public or private. There will also inevitably be opportunities that develop from these policies to engage with stakeholders and increase value. 

Recent data illustrate the positive results of adopting new standards and reporting methods. According to the Accenture Future of Work Study 81% of sustainable stock indices outperformed their peer benchmarks in 2020. ESG focuses on the Triple-Bottom-Line principles, which essentially advocates for a balance between people, profit, and planet when considering any program or project within an organization. Sustainability professionals who have been advocating for both ESG and Triple-Bottom-Line principles will likely not be surprised by these statistics, as their focus on a long-term, balanced approach to creating value can be less subject to the waxing and waning fluctuations that come with the single-bottom-line approach of focusing only on short term profit.

ESG in Cannabis Real Estate

It is essential for cannabis companies to make ESG initiatives a priority as more investors look to these frameworks as potential predictors for future success. Already some cannabis license applications are requiring environmental impact statements and state-level environmental compliance documentation. 

The cannabis industry also has a unique opportunity as a relatively young and emerging industry. Many cannabis companies already have the capacity and infrastructure to adapt swiftly to changing regulations. In the new era of ESG, cannabis corporations are in the position to make these principles a part of their core narrative early on and become more attractive to investors. 

In commercial real estate, here are some of the most relevant ESG initiatives to consider. 

• ENERGY MANAGEMENT (e.g. Utility Installation & Efficiency)

• WATER & WASTE WATER MANAGEMENT (e.g. Water Use & Treatment)

• PRODUCT DESIGN & LIFECYCLE MANAGEMENT (e.g. Building Operations)

1. PHYSICAL IMPACTS OF CLIMATE CHANGE. (e.g. Indoor Air Quality)  

These are based on the Sustainability Accounting Standards Board’s (SASB) materiality finder for real estate, which also provides insight across a broad range of industries for those interested in other sectors.

There are many ways to begin monitoring and collecting data that will help provide a clearer picture of a cannabis facility’s operational efficiency. For facilities already existing in the cannabis ecosystem, property owners and operators should consider investing in eco-friendly waste management initiatives, repurposing materials when possible, and ensuring recycling capabilities at every operation. Utilizing technology platforms to track water consumption and overall environmental performance will allow an operation to investigate what opportunities exist to reduce energy use by replacing equipment or introducing more natural ventilation into spaces to reduce heating and cooling use. 

For those in the early stages of a cannabis real estate project, industry professionals should make ESG initiatives a part of their buildout strategy from the beginning. This means addressing the potential physical risks and impacts on a building where you’re looking to develop. Is the property in a flood zone and at risk of rising sea levels? Is the potential building site exposed to other natural disasters like wildfires?

Many of these environmental and climate-related risks also intersect on a social level. In cannabis real estate, companies should consider whether a building and its materials are safe for workers and the larger community. For example, due to changing weather patterns and increasing temperatures, air quality may decrease or there may be extended periods of drought. Planning ahead to mitigate some of these risks is essential, from considering the introduction of cisterns to collect rainwater during extreme weather that can be repurposed in drier seasons, as well as on-site green spaces and rooftop gardens that can generate cooler temperatures while providing a welcoming environment for employees.

The key to preparing for ESG requirements and ensuring that your organization is ready to tackle these issues is to incorporate these specific needs directly into project objectives and having experts on the project team that understand both short-term requirements and long-term opportunities.

Overall, cannabis real estate needs to be developed with geography and locality risks in mind. It’s not only a necessity to make energy-efficient and sustainable strategies a part of a facility’s infrastructure, but also consider where and how that property will be impacted in the future. 

Bryan McLaren serves as the Chairman and CEO of publicly traded Zoned Properties, Inc. (ZDPY). As a licensed Realtor, certified Green Roof Professional,and former City Sustainability Commissioner, with multiple Masters degrees focused specifically on Sustainable Development, Bryan has navigated state regulatory programs for environmental projects and cannabis commercial real estate projects nationally across hundreds of development projects.  

About Zoned Properties, Inc. (OTCQB: ZDPY):

Zoned Properties is a leading real estate development firm for emerging and highly regulated industries, including regulated cannabis. The company is redefining the approach to commercial real estate investment through its integrated growth services.

Headquartered in Scottsdale, Arizona, Zoned Properties has developed a full spectrum of integrated growth services to support its real estate development model; the Company’s Property Technology, Advisory Services, Commercial Brokerage, and Investment Portfolio collectively cross-pollinate within the model to drive project value associated with complex real estate projects. With national experience and a team of experts devoted to the emerging cannabis industry, Zoned Properties is addressing the specific needs of a modern market in highly regulated industries.   

Zoned Properties is an accredited member of the Better Business Bureau, the U.S. Green Building Council, and the Forbes Real Estate Council. Zoned Properties does not grow, harvest, sell or distribute cannabis or any substances regulated under United States law such as the Controlled Substance Act of 1970, as amended (the “CSA”). Zoned Properties corporate headquarters are located at 8360 E. Raintree Dr., Suite 230, Scottsdale, Arizona. For more information, call 877-360-8839 or visit www.ZonedProperties.com.  

Twitter: @ZonedProperties

LinkedIn: @ZonedProperties

NEW CANAAN, Conn., July 06, 2022 (GLOBE NEWSWIRE) — NewLake Capital Partners, Inc. (OTCQX: NLCP) (the “Company” or “NewLake”), a leading provider of real estate capital to state-licensed cannabis operators, today is announcing $50 million of investments across three properties, marking the full commitment of capital raised during the Company’s initial public offering. NewLake acquired two properties from a leading publicly-traded U.S. multi-state cannabis operator (MSO) and amended its existing lease with another leading publicly-traded U.S. MSO to fund an already completed expansion. As of June 30, 2022, NewLake has approximately $28.7 million of unfunded commitments.

The two properties NewLake acquired include an approximately 38,000 square-foot operational cultivation facility in Pennsylvania for $14.5 million and an approximately 56,500 square-foot operational cultivation facility in Nevada, a new market for NewLake, for $13.6 million. NewLake is also providing an additional $750,000 for tenant improvements at the Pennsylvania property. NewLake’s $21.0 million investment in an existing operational cultivation facility funded an approximately 50,000 square foot expansion as well as other capital improvements at the site.

“We are excited to announce these transactions, where 98% of our capital commitment was funded at closing. Through these transactions, we have added a new publicly-traded MSO Tenant partner, a new market to NewLake’s portfolio and taken advantage of built-in growth in our portfolio,” said David Weinstein, NewLake’s Chief Executive Officer. “With capital available from our credit facility, we continue to have runway to invest in the U.S. cannabis industry.”

About NewLake Capital Partners, Inc.
NewLake Capital Partners, Inc. is an internally-managed real estate investment trust that provides real estate capital to state-licensed cannabis operators through sale-leaseback transactions and third-party purchases and funding for build-to-suit projects. NewLake owns a portfolio of 31 cultivation facilities and dispensaries that are leased to single tenants on a triple-net basis, and has provided two loans aggregating $35 million. For more information, please visit www.newlake.com.

Forward-Looking Statements
This press release contains “forward-looking statements.” Forward-looking statements can be identified by words like “may,” “will,” “likely,” “should,” “expect,” “anticipate,” “future,” “plan,” “believe,” “intend,” “goal,” “project,” “continue” and similar expressions. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs and expectations. Forward-looking statements, including statements regarding the timing of settlement and the use of proceeds of the initial public offering, are based on the Company’s current expectations and assumptions regarding capital market conditions, the Company’s business, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, changes in the condition of the U.S. economy and, in particular, the U.S. real estate market.

NewLake Investor Contact:
Valter Pinto, Managing Director
KCSA Strategic Communications
[email protected]
PH: (212) 896-1254

NewLake Media Contact:
McKenna Miller
KCSA Strategic Communications
[email protected]
PH: (212) 896-1254

This article was published by CFN Enterprises Inc. (OTCQB: CNFN), owner and operator of CFN Media, the industry’s leading agency and digital financial media network dedicated to the burgeoning CBD and legal cannabis industries. Call +1 (833) 420-CNFN for more information.

About Ryan Allway

Mr. Allway has over a decade of experience in the financial markets as both a private investor and financial journalist. He has been actively involved in the cannabis industry since its inception, covering public and private companies.

Last week, Las Vegas-based commercial real estate and development company the Siegel Group announced that it had completed the sale of the Artisan Hotel Boutique to Pro Hospitality Group for $11.9 million.

Alex Rizk, the owner of Phoenix-based Pro Hospitality Group, told the Las Vegas Review-Journal that he is planning a $3 million renovation of the 64-room hotel on Sahara Boulevard at Interstate 15 near the Las Vegas Strip. He said that when the regulations are in place at the state and local level, he will make the Artisan a “cannabis-friendly” destination for tourists to the city.

“This is a lifestyle, boutique hotel,” Rizk said.

The Siegel Group acquired the Artisan Hotel in 2009, “transforming the location into one of the most well-known and visited boutique hotels in Las Vegas,” the company said in a statement about the sale.

“The hotel gained a loyal following among locals, tourists, and boutique enthusiasts who were drawn to the location’s eclectic design and hip, intimate atmosphere,” the company wrote. “The unique hotel contained a bar-lounge with a popular after-hours scene, a restaurant, wedding chapel, and one of the few topless pools in town.”

Cannabis Consumption Lounges Authorized Last Year

Last year, Nevada lawmakers passed legislation that gave the state Cannabis Compliance Board the authority to regulate lounges that allow the onsite consumption of weed products. The board is currently in the process of drafting regulations and local governments will have the authority to enact tighter measures. Officials from Clark County, home to Las Vegas, announced in January that they were keeping track of efforts to regulate cannabis consumption lounges at the state level.

Under the 2016 ballot measure that legalized recreational pot in Nevada, the consumption of cannabis products was only legally permitted in private residences. The legalization of regulated cannabis consumption lounges was intended to give visitors a place to enjoy the benefits of the state’s cannabis reform.

As a state senator in 2017, Clark County Commissioner Tick Segerblom led the first effort in the state legislature to legalize cannabis consumption lounges. Last year, he characterized lounges as a “game changer” for the state’s hospitality businesses.

“Consumption lounges are so perfect for our tourism industry,” Segerblom told the Review-Journal. “The sooner we get out there, the more we’ll be looked upon as a marijuana-friendly city and state.”

New Owner Has Cannabis-Friendly Hotel in Phoenix

Pro Hospitality Group already operates a cannabis-friendly hotel, the Clarendon Hotel and Spa, in its home city of Phoenix, Arizona. The hotel’s website informs potential guests that the property features “cannabis-friendly rooms and amenities” that allow “vaping, dabbing, flower, etc.” The Clarendon also boasts a cannabis consumption lounge that is open to both hotel guests and the general public.

“Since we are currently a split-use hotel with cannabis and non-smoking rooms, we do ask that any smoking take place in your cannabis-friendly room and not in the public areas of the hotel,” the website notes. “Vapes and smokeless products can be used in outdoor public areas, not including the restaurant.”

The Clarendon also notes that it is “working on a cannabis shuttle service to take hotel guests from the hotel to a local dispensary and back again,” according to the website.

The property opened its first cannabis-friendly rooms in July, followed by the rest of the west wing of the hotel for a total of 16 guest rooms that welcome the consumption of cannabis products. The Clarendon is also accepting reservations for a limited number of rooms on the cannabis-friendly lodging booking site Bud and Breakfast.

50% Revenue Growth Year-over-Year and 188% Increase in Cash Provided by Operations in 2021

National Advisory & Brokerage Clients in New State Markets Set the Stage for Company Expansion

SCOTTSDALE, Ariz., March 24, 2022–(BUSINESS WIRE)–Zoned Properties®, Inc. (the “Company”) (OTCQB: ZDPY), a leading real estate development firm for emerging and highly regulated industries including legalized cannabis, today announced its financial results for the fourth quarter and year ended December 31, 2021.

Full-Year 2021 Financial Results

• Revenues were $1.82 million for the year ended December 31, 2021, compared to $1.22 million for the year ended December 31, 2020, representing an increase of 49.8%.
• Operating expenses were $1.78 million for the year ended December 31, 2021, compared to $1.18 million for the year ended December 31, 2020.
• Cash provided by operating activities was $489,257 for the year ended December 31, 2021, compared to $170,040 for the year ended December 31, 2020, representing an increase of 188%. that was primarily attributable to cash generated from advisory and brokerage revenues.
• The Company had cash of $1,191,940 as of December 31, 2021, compared to $699,335 as of December 31, 2020, continuing positive cash-flow.

Fourth Quarter 2021 Financial Results

• Revenues were $537,211 for the quarter ended December 31, 2021, compared to $308,977 for the quarter ended December 31, 2020.
• Operating expenses were $535,345 for the quarter ended December 31, 2021, compared to $268,046 for the quarter ended December 31, 2020.
• For the quarter ended December 31, 2021, the Company reported net loss of $111,583, as compared to net income of $12,270 for the quarter ended December 31, 2020.
• The Company had cash of $1,191,940 as of December 31, 2021, compared to $1,090,682 as of September 30, 2021, continuing positive cash-flow.

Management Discussion and Company Highlights

• Zoned Properties Property Portfolio: Zoned Properties has achieved a stabilized, debt-free, property portfolio in Arizona that now produces $1.83 million annually in triple-net rental revenue, as of March 2022. We believe the Company is now positioned to explore healthy debt financing opportunities that could help fund the national expansion of the Company’s property portfolio.
  • Portfolio expansion in 2021 and subsequent to year-end 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.
  • Subsequent to year-end 2021, 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.
  • Subsequent to year-end, effective March 1, 2022, Chino Valley’s operational square footage increased from 67,312 square feet to 97,312 square feet, and the new base rental payments at the facility increased 59% from $55,195 per month to $87,580 per month, reflecting both the increase in operational square footage and the increase to the base rent rate. The increase represents a year-over-year annualized base rental revenue increase from $393,600 in March 2020 to $1,050,970 in March 2021, reflecting a 167% increase.
  • The Chino Valley Cultivation Facility sits on over 47 acres of land, and also includes an approved master plan for additional future expansion. If currently permitted and construction-ready expansion were to be completed in its entirety, the additional square footage of operational and rentable building space would increase another 60,000 square feet, for a total of 157,312 square feet of operational and rentable space at the facility. This change would effect an increase in annualized base rental revenue to $1,698,970 for the Chino Valley Cultivation Facility plus additional rental payments under the triple-net lease.

• Zoned Properties Commercial Real Estate Services: The Company’s expanding leadership team is continuing to scale the Company’s commercial real estate services divisions: Advisory Services, Brokerage Services, Franchise Services, and Property Technology (“PropTech”) Services.
  • Zoned Properties Advisory Services: The Company has been expanding its advisory services team nationally, specializing in commercial real estate for emerging and regulated industries, including the regulated cannabis industry. The team has successfully identified hundreds of cannabis zoned properties nationally and has recently helped clients close cannabis real estate transactions in Arizona, New Mexico, Ohio, and New Jersey.
  • Zoned Properties Brokerage Services: Since inception of the Company’s in-house licensed brokerage in June 2021, the Zoned Properties team has closed over $50 million worth of real estate transactions for brokerage clients and has engaged with clients to list over 300,000 square feet of commercial real estate for cannabis dispensaries, cultivation, processing, and warehouse facilities. The brokerage team is currently engaged with national cannabis organizations, buyers, investors, and exclusive client listings with over $500,000 in future commission potential across dozens of commercial real estate projects.
  • Zoned Properties Franchise Services: Zoned Properties and national cannabis retail franchisor, Open Dør Dispensaries, have 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 will 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.
  • Zoned Properties PropTech Services: PropTech data solutions have the opportunity at 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 expects to officially launch the platform into the marketplace in 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.

“The Zoned Properties mission and value proposition has never been stronger than it is today, empowering regulated industry stakeholders with commercial real estate solutions. We are helping cannabis operators and entrepreneurs enter the regulated marketplace with legitimacy. During 2021, we successfully recruited a sophisticated team of experts onto our team and formalized service partnerships across the nation,” commented Bryan McLaren, Chief Executive Officer of Zoned Properties. “With stabilized, passive revenue from our portfolio and a clear pathway to expand into state-cannabis markets nationally, we believe that Zoned Properties is positioned for tremendous growth and scalability. These growth opportunities are the result of our team’s direct involvement in hundreds of regulated projects across the nation, leveraging our full-spectrum of commercial real estate services. We thank our shareholders, stakeholders, clients and partners for their trust in Zoned Properties and will continue working hard to bring them value.”

About Zoned Properties, Inc. (OTCQB: ZDPY):

Zoned Properties is a leading real estate development firm for emerging and highly regulated industries, including regulated cannabis. The company is redefining the approach to commercial real estate investment through its integrated growth services.

Headquartered in Scottsdale, Arizona, Zoned Properties has developed a full spectrum of integrated growth services to support its real estate development and investment model; Advisory Services, Brokerage Services, Franchise Services, and PropTech Data Services each cross-pollinate within the model to drive project value associated with complex real estate projects. With national experience and a team of experts devoted to the emerging cannabis industry, Zoned Properties is addressing the specific needs of a modern market in highly regulated industries.

Zoned Properties is an accredited member of the Better Business Bureau, the U.S. Green Building Council, and the Forbes Real Estate Council. Zoned Properties does not grow, harvest, sell or distribute cannabis or any substances regulated under United States law such as the Controlled Substance Act of 1970, as amended (the “CSA”). Zoned Properties corporate headquarters are located at 8360 E. Raintree Dr., Suite 230, Scottsdale, Arizona. For more information, call 877-360-8839 or visit www.ZonedProperties.com.

Twitter: @ZonedProperties
LinkedIn: @ZonedProperties

Safe Harbor Statement

This press release contains forward-looking statements. All statements other than statements of historical facts included in this press release are forward-looking statements. In some cases, forward-looking statements can be identified by words such as “believe,” “expect,” “anticipate,” “plan,” “potential,” “continue” or similar expressions. Such forward-looking statements include risks and uncertainties, and there are important factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These factors, risks and uncertainties are discussed in the Company’s filings with the Securities and Exchange Commission. Investors should not place any undue reliance on forward-looking statements since they involve known and unknown, uncertainties and other factors which are, in some cases, beyond the Company’s control which could, and likely will, materially affect actual results, levels of activity, performance or achievements. Any forward-looking statement reflects the Company’s current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to operations, results of operations, growth strategy and liquidity. The Company assumes no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

COVID-19 Statement

In March 2020, the World Health Organization declared COVID-19 a global pandemic and recommended containment and mitigation measures worldwide. We are monitoring this closely, and although operations have not been materially affected by the COVID-19 outbreak to date, the ultimate duration and severity of the outbreak and its impact on the economic environment and our business is uncertain. Currently, all of the properties in our portfolio are open to our Significant Tenants and their customers and will remain open pursuant to state and local government requirements. We did not experience in 2021, and to date have not experienced in 2022, any material changes to our operations from COVID-19. We do not anticipate any such material changes for the remainder of 2022. Our tenants are continuing to generate revenue at these properties and they have continued to make rental payments in full and on time and we believe the tenants’ liquidity position is sufficient to cover its expected rental obligations. Accordingly, while we do not anticipate an impact on our operations, we cannot estimate the duration of the pandemic and potential impact on our business if the properties must close or if the tenants are otherwise unable or unwilling to make rental payments. In addition, a severe or prolonged economic downturn could result in a variety of risks to our business, including weakened demand for our properties and a decreased ability to raise additional capital when needed on acceptable terms, if at all. At this time, the Company is unable to estimate the impact of this event on its operations.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220324005166/en/

Contacts

Media Relations
Proven Media
Neko Catanzaro
Tel (401) 484-4980
[email protected]

Investor Relations
Zoned Properties, Inc.
Bryan McLaren
Tel (877) 360-8839
[email protected]
www.zonedproperties.com

This article was published by CFN Enterprises Inc. (OTCQB: CNFN), owner and operator of CFN Media, the industry’s leading agency and digital financial media network dedicated to the burgeoning CBD and legal cannabis industries. Call +1 (833) 420-CNFN for more information.

About Ryan Allway

Mr. Allway has over a decade of experience in the financial markets as both a private investor and financial journalist. He has been actively involved in the cannabis industry since its inception, covering public and private companies.

by  Carmen Andrade

In the last section of the series aimed to help landlords navigate the evolving cannabis landscape, this article focuses on terminations and insurance issues.

Lease Terminations

When negotiating a termination provision in a lease, both landlords and tenants will want to include specific parameters regarding the “what, when and how” of the termination process.

The “what” concerns what the trigger is for the termination which can run from the generic to the very specific. By way of example, either party may want to have a broad termination right which allows each party to terminate the lease for any or no reason. Alternatively, each party, when it relates to the other party’s termination right, will want to limit the other party’s termination right to a specific trigger (e.g. inability to obtain approvals, revocation of license, and sale of property of which the premises are a part of, etc.).

The “when” concerns at what point will the termination right mature and how long will the right remain available for exercise by the party seeking to terminate, and how much notice must be given before the termination occurs.In allowing a termination right, the landlord should build in a sufficient cushion of time to allow for marketing of the space, securing a new tenant, retrofitting the space for the new tenant, and any rent concession period afforded to the replacement tenant. In particular, a landlord will want to limit the window of time during which a tenant may exercise the termination right. Ideally, from the landlord perspective, if the window passes, the termination right is deemed waived and the lease continues.

The “how” concerns the process for effectuating the termination including any monetary consideration to be paid for the right to terminate. Examples of monetary consideration may include reimbursement for unamortized costs relating to the initial tenancy such as broker’s commissions, alterations, work allowances and rent concessions. Other considerations include black-out periods to prohibit a landlord from exercising a termination during high volume production or selling seasons, to allow a particular growing cycle to be completed or to allow for the orderly transfer of product to a new facility.

Noxious Uses

Traditionally, leases contain restrictions on noxious uses. These may include uses that the landlord deems harmful, immoral, or contrary to the general character of the building, development, or site. Landlords will have to revise existing leases to allow for the incoming cannabis tenants to redefine what constitutes a noxious use. Landlords will also have to consider the impact of this revision on existing or targeted tenants to make sure the rules and regulations of the building or project site are uniform. As growers expand, and if the industry is legalized at the federal level, spaces suitable for cannabis tenants may become scarce, especially in densely populated areas like the metro areas of New Jersey. This rapid growth could trigger a greater need and demand for exclusivity provisions in favor of the tenant.

Insurance for Cannabis Tenants

Another consideration New Jersey landlords should think about before entering into leases with cannabis tenants is whether or not these businesses and their related activities will be able to obtain the type of insurance coverage that landlords typically require their tenants to obtain. While coverage for tenants engaged in cannabis operations is available, there are a limited number of carriers that offer this type of coverage which can be expensive and often contain gaps in coverage. This area is still evolving, and the question remains whether insurers will begin to make more readily available liability, property, worker’s compensation, rent loss and/or rent interruption insurance for space leased to tenants in the cannabis industry.

Cannabis-related businesses face many risks and obstacles. They share the same general liability and other risks agricultural and manufacturing businesses face, including workplace accidents, damage to property, and crop failure. Cannabis related businesses are especially prone to fires from both wild and internal sources. Other significant risks include theft, general liability, and product liability. As such, to address the risk of uncertain coverage, landlords may, if the type of coverage that a tenant is able to secure doesn’t comply with the landlord’s insurance requirements, consider requiring cannabis related tenants to self-insure their business.

The Future 

The expansion of the cannabis industry has so far proven to be inevitable across the country and New Jersey has been no exception. To date, many cannabis related businesses in New Jersey are going through the licensing process and are looking for commercial space for their current and future business operations. The New Jersey Cannabis Regulatory Commission recently announced that New Jersey would begin accepting applications for legal cannabis businesses in December of 2021 which will start with growers, processors, and testing labs. The application process for dispensaries will open in March 2022.

Now is the time for landlords to be knowledgeable and prepared to work with cannabis related businesses in this ever-changing and highly watched business landscape.

IN CASE YOU MISSED IT

by  Carmen Andrade

Commercial real estate owners and landlords are faced with the challenge of keeping up with best practices, laws, and regulations regarding leasing space to cannabis-related businesses. This article, the first in a series, aims to help landlords navigate the evolving landscape, focusing first on retrofitting spaces and how to formulate leases.

Cannabis Today – The Boom

Currently, 36 states, the District of Columbia, and 4 out of 5 U.S. territories have legalized the use of cannabis for medical purposes. Additionally, 18 states and the District of Columbia have legalized cannabis for recreational use, including New Jersey. The steady growth in sales of legal cannabis in the United States has proven to be big business, not only for the growers and sellers, but also for owners of real estate holding inventory well suited to serve the growing industry. 2020 was a breakout year with legal sales across the country hitting a record of $17.5 billion, a 46% increase from 2019. The current trend suggests the projected legal sales of cannabis by 2025 in excess of $40 billion.

Investment trusts and other multistate real estate investment vehicles are being used to provide real estate capital for the cannabis industry, including acquiring real estate for conversion or development to industrial and greenhouse buildings, which are then leased to growers in the cannabis industry. Similarly, other real estate investors, even if at a much smaller scale, are likely to pursue the developing real estate opportunities surrounding the cannabis industry. New Jersey landlords should prepare themselves for the ongoing cannabis boom by becoming knowledgeable of the potential issues in real estate leasing transactions with growers and sellers of cannabis.

Retrofitting Commercial Space for Cannabis Tenants

Owners of factories, warehouses, self-storage facilities, and other industrial-type facilities which may have sat idle are experiencing a renaissance in interest due, in large part, to the increased need for facilities able to be repurposed for the cultivation and processing of cannabis plants and related products. As cannabis becomes more widely accepted, for both medical and recreational uses, spaces that can be converted into retail and growing use for the cannabis industry are likely to see increased real estate transactional activity. The opportunities presented by the legalization of cannabis to repurpose dormant space seem endless.

Cultivation Considerations

For the cultivation of cannabis products, large, relatively unobstructed spaces located in industrial-type areas able to accommodate the increased square footage needed to grow cannabis are ideal. Other critical elements include the ability to retrofit the space to allow for the climate-control systems necessary to create a high humidity growing environment, the flexibility to implement the health and safety standards targeted to minimize the possible negative effects of such a tenancy (e.g., fumes, mold), and the capacity to upgrade the electrical infrastructure of the space so that it can handle the high-intensity electrical use necessary for such operations.

Power and Energy

The ability to provide sufficient electrical power to meet the demands of the tenant grower is a significant factor to consider in the retrofit process. It takes a lot of power and energy to grow cannabis. Landlords need to understand these requirements and factor in costs for added utility consumption in the leased space.

Security

While tenants proposing to be engaged in cannabis operations are required to submit a detailed, comprehensive security plan to the State with its application, and, if awarded a license, they must implement the plan as represented to the State, landlords should consider what if any additional security measures should be implemented in the common areas of a multi-tenant building.

Terms for Cannabis Related Leases 

Lease Length

Another question landlords will pose if they have the space is how long to lease it for? Since it can cost millions to retrofit the space, initial term leases should typically exceed ten years to allow for the amortization of the retrofit costs. In addition, the tenant will likely want the option to renew the lease in no less than 5-year increments each and/or ensure that the lease term coincides with the term of their license to operate.

Retrofitting Space for Cannabis Businesses

Cannabis growers and other businesses have unique needs for their commercial space that may require landlords to retrofit their existing facilities. As for who pays for the retrofit, it depends on who has the available cash. Because marijuana is currently illegal at the federal level, many banks will not provide financing to buildings used by the industry. Local banks may be more willing to take the risk, along with private investors. Landlords can also use cash on hand to pay for the retrofit and bill those costs back to the tenant as part of the rent over the term of the lease.

The landlord should be careful to include specific language in the lease that allows the landlord to install submeters to monitor the tenant’s electricity and use of other utilities. With significant monthly electricity consumption costs typical in the operation of these growing facilities, the lease must protect the landlord’s profit by ensuring that utilities do not overtake the rental stream.

Particular attention should also be given to the condition in which the tenant is required to return the space to the landlord at the end of the lease term based upon the type of installations made by the tenant throughout the lease term. It is also important to be cognizant of any laws that require notice of cessation of operations. The tenant’s installations may be so unique to its cannabis cultivation business that instead of creating value to the landlord, they create increased demobilization costs to the landlord if not properly imposed as a tenant responsibility.

Considerations for Existing Financing

In addition to the issue of how to finance the retrofit, there is the issue of what impact these tenancies will have on existing financing. Landlords must be sure to review any financing documents encumbering their property for prohibition or limitation on certain uses and the steps to be followed in order to obtain approval for new tenancies.

Triple Net Leases

One solution is to structure the lease as a triple net lease with the tenant paying base rent to the landlord. All other costs and expenses (e.g., proportionate share of real estate taxes, insurance, utilities, and security) incurred in connection with the space would be paid for by the tenant. While gross rent structures (that incorporate these costs into the rent itself) may work with tenants in other industries, the variable costs associated with operating a cannabis cultivation facility requires that additional rent costs be accounted for.

Legal Standing

While the federal legality of cannabis operations remains in question, landlords should be cognizant of bank deposits made from rent received from tenants with cannabis operations.

As the cannabis infrastructure in New Jersey continues to evolve, landlords may be facing pressure to enter into new leasing agreements quickly and possibly without knowledge of the relevant information.

For more information, part two  of this series will discuss rental rates, security deposits, compliance and more.  

SCOTTSDALE, Ariz., November 10, 2021–(BUSINESS WIRE)–Zoned Properties®, Inc. (the “Company” or “Zoned Properties”) (OTCQB: ZDPY), a leading real estate development firm for emerging and highly regulated industries including legalized cannabis, today announced its financial results for the three and nine months ended September 30, 2021.

Third Quarter 2021 & Nine Months Ended September 30, 2021 Financial Results

• Revenue increased 28% to $387,365 for the third quarter of 2021, compared to $302,772 for the third quarter of 2020. This increase in revenues was primarily attributable to an increase in rent revenues from the Significant Tenants of $29,780 and an increase in brokerage revenues of $69,500, offset by a decrease in advisory revenues of $14,687.
• Operating expenses increased 77.0% to $440,816 for the third quarter of 2021, compared to $249,021 for the third quarter of 2020, an increase primarily due to the payment of brokerage commission splits of $42,500 on brokerage revenues and increases in compensation and benefits and consulting fees.
• For the nine months ended September 30, 2021, revenue increased 41.6%, while operating expenses only increased 36.7% as compared to the nine months ended September 30, 2020.
• Loss from operations amounted to $(53,451) for the third quarter of 2021, compared to income from operations of $53,751 for the third quarter of 2020, a decrease of $107,202.
• Income from operations amounted to $42,834 for the nine months ended September 30, 2021, compared to a loss from operations of $(3,198) for the nine months ended September 30, 2020, a positive change of $46,032.
• Net loss was $(95,495), or $(0.01) per basic share and diluted share, for the third quarter of 2021, compared to net income of $25,089, or $0.00 per basic and diluted share, for the third quarter of 2020.
• For the nine months ended September 30, 2021, net cash provided by operating activities was $387,999, compared to $48,470 for the nine months ended September 30, 2020.
• As of September 30, 2021, Zoned Properties had cash of $1,090,682, compared to $699,335 as of December 31, 2020.

Third Quarter 2021 & Nine Months Ended September 30, 2021 Company Highlights

• Zoned Properties Leadership Team: The Company has been successfully expanding its team of national real estate professionals for regulated industries. In the third quarter of 2021, Zoned Properties appointed Berekk Blackwell as Chief Operating Officer, Patrick Moroney as Director of Real Estate, and Joseph Lewis as Designated Broker. Zoned Properties has been recruiting a team of Senior Advisors and Project Managers with national cannabis and real estate expertise, as well.

• Zoned Properties Services Verticals: The Company’s expanding leadership team is continuing to scale the Company’s commercial real estate service verticals: Advisory Services, Brokerage Services, Franchise Services, and Property Technology (“PropTech”) Services.
  • Zoned Properties Advisory Services: The Company has been expanding its team of Senior Advisors specializing in emerging and regulated industries, primarily focused on the national cannabis industry. The Company has been shifting its client engagement model away from smaller, one-time engagements, and moving to engagements as the client’s outsourced real estate brain trust synced for longer-term client relationships. The team anticipates a successful transition to this updated advisory structure, which should be positively reflected in upcoming quarters.
  • Zoned Properties Brokerage Services: Our Brokerage Team is currently engaged with national cannabis organizations, national buyers, investors, and exclusive client listings with over $500,000 in commission potential across dozens of commercial real estate projects. Our Brokerage Team anticipates revenue from these potential commissions to be realized in the coming quarters.
  • Zoned Properties Franchise Services: Zoned Properties and national cannabis retail franchisor, Open Dør Dispensaries, are in the process of vetting operational partners from across the country to target a number of existing and new state markets. As the commercial real estate partner, Zoned Properties will benefit both directly and indirectly from the relationship. As an investor, the Company will receive a percentage of initial franchise fees and renewal fees, and as a partner the Company is positioned to provide commercial real estate investments for prospective franchise locations. Zoned Properties also has the opportunity to convert its existing debt investment for up to a 33% equity stake in the franchisor organization.
  • Zoned Properties PropTech Services: Property Technology platform solutions have the opportunity for national scale and service to regulated markets such as cannabis. Over the past year, Zoned Properties and Zoneomics have teamed up to solve one of the biggest challenges in cannabis real estate: how to identify appropriately zoned properties that can be permitted for cannabis operations. In the coming weeks, the project team will be formally introducing our platform to the marketplace. Under the brand, “Rezone”, the PropTech platform has the opportunity to democratize commercial real estate intelligence, providing hundreds of thousands of service professionals and business operators with the information they need to successfully develop regulated real estate projects.

• Zoned Properties Property Portfolio: Over $8,000,000 of capital has been invested to-date by the Company’s Significant Tenant at the Chino Valley Cultivation Facility.
  • The Company’s Significant Tenant will maintain the master rights to the property and facilities through the remainder of the Lease Agreement. Effective September 1, 2021, operational square footage increased from 40,000 square feet to 67,512 square feet, and the new base rental payments at the facility increased 68% from $32,800 per month to $55,195 per month including three out of four new building structures in the phase one expansion that became fully completed and operational.
  • The fourth additional building site is in completion stages for technology and operational packages along with compliance inspections. The parties expect that, upon final completion, they will enter into another lease amendment reflecting the increased operational square footage and increased base rental payments. Operational square footage would increase from 67,512 square feet to 97,512 square feet, and base rental payments at the facility would increase an additional 69% from $55,195 per month to $79,795 per month reflecting the entirety of the phase one expansion.
  • Upon completion of the entirety of the phase one expansion, the annualized base rental payments will increase to $957,550 reflecting an increase of 143% from previous annualized base rental payments of $393,600.
  • The Chino Valley property also includes an approved master plan for a phase two expansion of operational and rentable square footage that is construction ready and may proceed at the Tenant’s election. If the Tenant elects to proceed with phase two, the additional square footage of operational and rentable building space could include another 60,000 square feet for a total of 157,512 square feet of operational and rentable building space at the facility, which would equate to an annualized rental rate of $1,549,918 plus additional rental payments under the triple-net lease.

“Our value proposition and business thesis at Zoned Properties, which is centrally focused on real estate development in the regulated cannabis space, has never been stronger. We continue to strengthen our team of subject-matter experts who know how to navigate the complexity of cannabis real estate and deliver tangible value for our company and our clients across the county,” commented Bryan McLaren, Chief Executive Officer of Zoned Properties. “We have successfully positioned the Company with a debt-free, cash-flowing portfolio of expanding properties that can support innovative and scalable growth for the future of the Company. One of the final puzzle pieces that will shape the future of Zoned Properties will be confirming long-term capital partners who understand our mission, vision, and capital opportunities we’ve spent years creating to build value for investors, shareholders, and stakeholders.”

About Zoned Properties, Inc. (OTCQB: ZDPY):

Zoned Properties is a leading real estate development firm for emerging and highly regulated industries, including regulated cannabis. The company is redefining the approach to commercial real estate investment through its integrated growth services.

Headquartered in Scottsdale, Arizona, Zoned Properties has developed a full spectrum of integrated growth services to support its real estate development and investment model; Advisory Services, Brokerage Services, Franchise Services, and PropTech Data Services each cross-pollinate within the model to drive project value associated with complex real estate projects. With national experience and a team of experts devoted to the emerging cannabis industry, Zoned Properties is addressing the specific needs of a modern market in highly regulated industries.

Zoned Properties is an accredited member of the Better Business Bureau, the U.S. Green Building Council, and the Forbes Real Estate Council. Zoned Properties does not grow, harvest, sell or distribute cannabis or any substances regulated under United States law such as the Controlled Substance Act of 1970, as amended (the “CSA”). Zoned Properties corporate headquarters are located at 14269 N. 87th Street, Suite 205, Scottsdale, Arizona. For more information, call 877-360-8839 or visit www.ZonedProperties.com.

Twitter: @ZonedProperties
LinkedIn: @ZonedProperties

Safe Harbor Statement

This press release contains forward-looking statements. All statements other than statements of historical facts included in this press release are forward-looking statements. In some cases, forward-looking statements can be identified by words such as “believe,” “expect,” “anticipate,” “plan,” “potential,” “continue” or similar expressions. Such forward-looking statements include risks and uncertainties, and there are important factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These factors, risks and uncertainties are discussed in the Company’s filings with the Securities and Exchange Commission. Investors should not place any undue reliance on forward-looking statements since they involve known and unknown, uncertainties and other factors which are, in some cases, beyond the Company’s control which could, and likely will, materially affect actual results, levels of activity, performance or achievements. Any forward-looking statement reflects the Company’s current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to operations, results of operations, growth strategy and liquidity. The Company assumes no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

COVID-19 Statement

In March 2020, the World Health Organization declared COVID-19 a global pandemic and recommended containment and mitigation measures worldwide. We are monitoring this closely, and although operations have not been materially affected by the COVID-19 outbreak to date, the ultimate duration and severity of the outbreak and its impact on the economic environment and our business is uncertain. Currently, all of the properties in our portfolio are open to our Significant Tenants pursuant to state and local government requirements. We did not experience in 2020, and to date have not experienced in 2021, any material changes to our operations from COVID-19. We do not anticipate any such material changes for the remainder of 2021. Our tenants are continuing to generate revenue at these properties and they have continued to make rental payments in full and on time and we believe the tenants’ liquidity position is sufficient to cover its expected rental obligations. Accordingly, while we do not anticipate an impact on our operations, we cannot estimate the duration of the pandemic and potential impact on our business if the properties must close or if the tenants are otherwise unable or unwilling to make rental payments. In addition, a severe or prolonged economic downturn could result in a variety of risks to our business, including weakened demand for our properties and a decreased ability to raise additional capital when needed on acceptable terms, if at all. At this time, the Company is unable to estimate the impact of this event on its operations.

View source version on businesswire.com: https://www.businesswire.com/news/home/20211110005852/en/

Contacts

Media Relations
Proven Media
Neko Catanzaro
Tel (401) 484-4980
[email protected]

Investor Relations
Zoned Properties, Inc.
Bryan McLaren
Tel (877) 360-8839
[email protected]
www.zonedproperties.com

This article was published by CFN Enterprises Inc. (OTCQB: CNFN), owner and operator of CFN Media, the industry’s leading agency and digital financial media network dedicated to the burgeoning CBD and legal cannabis industries. Call +1 (833) 420-CNFN for more information.

About Ryan Allway

Mr. Allway has over a decade of experience in the financial markets as both a private investor and financial journalist. He has been actively involved in the cannabis industry since its inception, covering public and private companies.