Zoned Properties Completes $8M Expansion At Chino Valley Cultivation Facility, Plans To Bolster Portfolio And Cash Flow

Cannabis-focused real estate development firm Zoned Properties, Inc. ZDPY announced Tuesday an amendment to the lease agreement with a significant tenant related to its cultivation facility located in Chino Valley, Arizona.

To date, the company’s significant tenants have invested more than $8 million at the facility, in addition to maintaining master rights to the property and facilities through the remainder of the lease agreement.

As of September 1, operational square footage will be boosted from 40,000 square feet to 67,512 square feet, while new base rental payments at the facility will increase 68% from $32,800 to $55,195 on a monthly basis.

The company said that three out of four new building structures are in phase one expansion. The fourth building site is in the completion stages for technology and operational packages and compliance inspections.

“This lease amendment is not only highly accretive for our own operational cash flow, but also marks a critical milestone for the increase in cultivation capacity and operational expansion for our Significant Tenant,” said Berekk Blackwell, Chief Operating Officer of Zoned Properties. 

Upon final completion, the parties expect to enter into another lease amendment, bringing the operational square footage to a total of 97,512 square feet and base rental payments to $79,795 per month, reflecting the entirety of the phase one expansion.

“The increasing demand for regulated marijuana cultivation space and consumer products in Arizona has gone far beyond initial projections as the result of the recently approved and implemented adult-use marijuana program,” commented Bryan McLaren, Chief Executive Officer of Zoned Properties. “Industry experts are estimating consumer demand in Arizona could increase above $1 Billion in the next few years, which will require increased cultivation capacity and square footage of entitlement and properly zoned properties such as Chino Valley.”

Price Action

Zoned Properties’ stock traded 3.14% higher at $0.64 per share at the time of writing Tuesday.

Photo: Courtesy of CRYSTALWEED cannabis on Unsplash