22nd Century Reports Quarterly Results
22nd Century Group reported net revenues of $19.2 million in the fourth quarter of 2022, up 141 percent from the comparable 2021 quarter. Revenue from tobacco-related products increased 25.7 percent to $10 million, primarily driven by volume increases in contract manufacturing and initial sales of the company’s VLN brands as part of an early rollout in Illinois and Colorado.
“The fourth quarter and 2022 were transformative for 22nd Century as we launched an aggressive commercial rollout of our FDA-authorized VLN reduced nicotine content cigarettes and accelerated revenue and margin growth opportunities with our hemp/cannabis business unit,” said 22nd Century Group CEO James A. Mish in a statement.
“Following our exceptional pilot results indicating our ability to initially capture a 1 percent share of market, several of the largest convenience store chains in the U.S. are seeking to carry our VLN products on a regional or multi-state basis.”
Looking forward, 22nd Century says it is poised to benefit from growing regulatory appetite to reduce nicotine content and ban mentholated tobacco products. The company’s VLN cigarette is currently the only Food and Drug Administration-authorized combustible cigarette able to meet the reduced nicotine content product standard under the FDA’s Comprehensive Plan requiring that all cigarettes be made “minimally or non-addictive.”
Meanwhile, the FDA’s proposed menthol cigarette ban, which is currently in final rules status, would leave VLN Menthol King as the only combustible menthol cigarette on the market. The company expects its low-nicotine leaf tobacco business to benefit from New Zealand law that will permit only reduced nicotine content cigarettes to be sold starting in early 2025.
22nd Century planted the largest ever VLN tobacco crop in 2022, including the second-generation VLN 2.0 reduced nicotine tobacco plants, which have demonstrated approximately 30 percent higher yields, enhanced quality leaf, improved disease resistance, reduction in nutrient requirements and increased stability across various environments and geographies.