Navigating Growth and Profitability: Insights from a Skull Session with Bryan McLaren of Zones Properties [GeoWire No. 110]

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By Maj Soueidan, Co-founder, GeoInvesting

Last Wednesday, Bryan McLaren, the CEO of Zoned Properties Inc (OOTC:ZDPY), joined us for a Skull Session Management Interview. For those of you who haven’t been following this stock, ZDPY is a strategic real estate development firm focused on the legalized cannabis sector. 

The company helps cannabis operators secure properties that can be used as a cannabis site, whether it’s a retail dispensary, a cultivation site, or a manufacturing kitchen. The company operates via 2 segments:

1. A real estate services segment, offering consultancy services to clients in the cannabis space.
2. A property investment portfolio segment, wherein the company acquires properties, gets them zoned and permitted for the cannabis industry, and then leases them to cannabis operators.

While the investment portfolio segment had primarily concentrated on buying large pieces of land, in this Skull Session Bryan talks about tweaking the business plan to include not just buying land, but also buying existing non-cannabis retail operations in, for example, a commercial strip mall.

This shift is what’s helped the company achieve profitability in the last 2 quarters, something we’ve been waiting for.

The company is listed under our Run2One Model Portfolio, a collection of stocks trading under $1 that we believe have the potential to exceed that threshold with expected revenue and EPS growth. Our goal was to discuss the company’s latest Q3 results, to find out whether profitability can be maintained, and to discuss the company’s new growth initiatives. 

During the interview, McLaren provided insights into the company’s financial performance and strategic shifts. He discussed achieving profitability for two consecutive quarters and attributes the success to a focus on rental income.

He emphasized a shift in focus from third-party consulting services to in-house development of projects for the company’s portfolio, leveraging proprietary property technology. McLaren outlined a cautious approach to raising and deploying capital, ensuring it aligns with the company’s growth strategy and minimizing dilution.

Additionally, the interview touched on the company’s profitability trajectory, operational efficiency, and the potential for a share repurchase program. McLaren expressed confidence in tightening operational strings, as evidenced by a 40% increase in rental revenue with only a modest rise in operating expenses. 

You can watch the full video here or view a few clip highlights below:

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Anyone else follow Mueller(paul)co (OOTC:MUEL)? Value trap or is the market completely off?

*$55
*Q3 EPS $5.07
*P/E 3.3x
*BV per share $45
*Cash per share $34.50

We (@GeoInvesting) are trying to figure out if recent changes will create a more predictable, less risky business that could lead to a…

— Maj Soueidan (@majgeoinvesting) November 15, 2023

Peter Lynch on Predicting the stock market and recessions:

“If you spent 13 minutes on economics you’ve wasted 10 minutes.”

Should also add, time is better spent in actually researching companies and you’ll earn a better ROI. https://t.co/8gJ3Kxa4EW

— Maj Soueidan (@majgeoinvesting) November 15, 2023

The most epic thing about Peter Lynch is that he quit at the age of 46 to spend more time with his family. Few people really understand the concept of ‘enough,’ but Peter did.

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— Maj Soueidan (@majgeoinvesting) November 18, 2023

This quote from another company might even be better:

“We continued to generate outstanding financial results in Q3 2023, with year-to-date results delivering a Company record of $260M in revenue, our lowest cumulative net loss of $(20.5)M & record Adjusted EBITDA of $57M.”😂 https://t.co/uS34tbXfLy

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Classic quote from a @steelers (top 5 worst ranked offense) fan vs. @Browns.

Browns are winning 10 to 0 at the half.

“ 10 to 0.. might as well be 100 to zero.

— Maj Soueidan (@majgeoinvesting) November 19, 2023

The post Navigating Growth and Profitability: Insights from a Skull Session with Bryan McLaren of Zones Properties [GeoWire No. 110] appeared first on GeoInvesting.