22nd Century Group reported net sales of $19.4 million for the third quarter of 2022, up 148 percent over that posted in the comparable 2021 period. The increase was due to increased contract manufacturing volumes as well as the addition of GVB Biopharma revenue for the full third quarter.
Revenue from tobacco-related products was $11.5 million, an increase of 47.7 percent from 2021, primarily driven by volume increases in the number of cartons sold, price increases and favorable mix for filtered cigar and cigarettes (including export cigarettes).
Revenue from hemp/cannabis-related products was $7.8 million compared to $0 in the prior year third quarter.
During the quarter, the company expanded distribution of its VLN reduced-nicotine cigarettes, accelerating sales in Colorado and Illinois while launching the brand in the “Four Corners” states—Arizona, Utah and New Mexico.
“The past few months have demonstrated tremendous commercial progress in 22nd Century’s reduced-nicotine tobacco and hemp/cannabis businesses,” said 22nd Century CEO James A. Mish in a statement. “Our VLN product launch has expanded from the exceptional pilot in Chicago to now five states. We plan to expand that base to as many as 18 states over the next 12 months.
“Doing so would give us access to more than half the $80 billion U.S. tobacco market and position us in most, if not all, of the states that have enacted MRTP (modified-risk tobacco product) excise tax provisions favorable to our unique product authorization. Even just a 1 percent share, which we view as eminently achievable based on our pilot results, would be transformative to our revenue line.
“The FDA is also continuing to advance its interests in transformative menthol and reduced-nicotine policies, and 22nd Century is positioned at the forefront of this opportunity with the only MRTP authorized 95 percent reduced-nicotine combustible cigarette and years of clinical research documenting the benefits of our products.”