Zoned Properties, Inc. reported a total revenue of $4.14 million for the fiscal year ending December 31, 2025, marking a 9.2% increase from $3.79 million in 2024. The growth was driven by a rise in rental income from its property investment portfolio, which generated $3.08 million, up from $2.88 million the previous year. The real estate services segment also contributed to the revenue increase, with earnings rising to $1.06 million from $909,000. However, the company faced significant operational challenges, resulting in a net loss of $2.85 million, compared to a net income of $573,958 in 2024.
The company's operating expenses surged by 45.9% to $6.03 million, primarily due to an impairment loss of $3.12 million related to properties in Chicago and Michigan, alongside increased compensation and business development costs. The impairment was attributed to structural damage at the Chicago property, which was declared unsafe and subsequently demolished. This financial strain has raised concerns about the company's ability to continue as a going concern, as it reported cash reserves of $837,767 and stockholders' equity of $3.07 million as of December 31, 2025.
In terms of strategic developments, Zoned Properties entered into an Asset Purchase Agreement (MBO APA) on January 15, 2026, to sell its assets to BPB Partners, LLC, a company owned by its management team. The transaction, valued at $7 million, is contingent upon stockholder approval and the buyer securing financing. If completed, the company plans to liquidate its assets and distribute the net cash to shareholders, potentially through a special dividend. The MBO is expected to close by the end of 2026, pending necessary approvals.
Operationally, Zoned Properties has maintained a 100% occupancy rate across its properties, which are primarily leased to cannabis-related tenants. The company has a diverse portfolio located in Arizona, Illinois, and Michigan, with a weighted average lease term exceeding ten years. However, the company has acknowledged the challenges of operating in the regulated cannabis industry, including zoning and permitting complexities, which can impact property values and tenant operations.
Looking ahead, Zoned Properties anticipates that the ongoing transition of cannabis to Schedule III under federal law may ease some regulatory burdens, but significant uncertainties remain. The company is focused on managing its liquidity and may need to raise additional capital to support its operations and growth initiatives. The management team is also aware of the potential risks associated with its concentrated tenant base in the cannabis sector, which could affect its financial stability if market conditions deteriorate.
About Zoned Properties, Inc.
Zoned Properties, Inc. is a real estate investment company specializing in acquiring, developing, and leasing properties within the regulated cannabis industry in the U.S. It focuses on properties leased to licensed cannabis retailers, cultivators, and processors, primarily in states with established cannabis markets. The company leverages proprietary technology, targets long-term tenants, and operates through property management, leasing, and advisory services, avoiding direct involvement in cannabis cultivation or distribution.
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