22nd Century Reports Second Quarter Results
22nd Century Group’ second quarter 2023 net revenues increased 62 percent to $23.4 million. Revenue from tobacco-related products was $8.1 million, reflecting the company’s transition away from low margin filtered cigar products to focus production and capacity on higher margin products, such as VLN and Pinnacle. Revenue from hemp/cannabis-related products was $15.4 million, as volumes continued to increase on share gains.
Gross profit for the second quarter of 2023 was minus $2.3 million as compared to $0.9 million in the prior year period. Gross profit from tobacco-related products was minus $1 million, reflecting a lower margin product mix.
Gross profit from hemp/cannabis-related products was minus $1.4 million, reflecting the final quarter of primarily ingredient trading activity due to a November 2022 plant fire. 22nd Century says it is restarting production of its ingredients at new facilities.
Our focus remains transformation from a primary emphasis on R&D to a fully commercial enterprise providing innovative harm reduction and consumer health and wellness products.
“Our focus in 2023 remains 22nd Century’s transformation from a primary emphasis on research and development to a fully commercial enterprise providing innovative harm reduction and consumer health and wellness products to key end markets,” said interim CEO John Miller in a statement.”
“We have now significantly advanced our commercialization plan for VLN sales across targeted states, 14 of which are now in place and two more states scheduled in September with a new drug store customer, a diversified hemp/cannabis ingredients and distribution business and a robust license and distribution business in both tobacco and hemp/cannabis.
“Following an initial delay in our commercial plans earlier this year, which are common on retail launches, we have now substantially expanded the availability of our FDA-authorized, reduced nicotine- content cigarettes VLN—a tobacco harm reduction product unlike any other.
“We are also implementing programs intended to reduce our operating costs by at least $15 million on an annualized basis.”