Category: News This Week

22nd Century Launches Cannabis Platform

Photo: cytis from Pixabay
22nd Century Group has developed and launched a technology platform that will enable the company and its strategic partners to quickly identify and incorporate commercially valuable traits of hemp/cannabis plants to create new, stable hemp/cannabis lines. The platform incorporates a suite of proprietary molecular tools and a large library of genomic markers and gene-trait correlations. The platform was developed in collaboration with researchers at KeyGene, a global leader in plant research involving high-value genetic traits and increased crop yields.
“This is a major breakthrough. Quickly and easily identifying the genes responsible for specific traits in a plant is a powerful tool for 22nd Century Group and the hemp/cannabis industry as a whole,” said James A. Mish, chief executive officer of 22nd Century Group, in a statement.
“That is why we are even now beginning discussions to license this platform to strategic partners to help them improve their plant breeding techniques and to optimize their hemp/cannabis cultivars. We continue to make great advancements through our partnership with KeyGene, and this newly developed molecular breeding platform has the potential to result in exponential growth for the company’s revenues and create new value opportunities for our stakeholders, including shareholders.”
“Using traditional breeding techniques, it typically takes at least eight to 10 years to develop new varieties of hemp/cannabis plants that consistently express important traits,” said Juan Sanchez Tamburrino, vice president of research and development at 22nd Century Group.
“Our new molecular breeding platform can dramatically reduce our development time for new high-value varieties of hemp/cannabis and allows 22nd Century scientists to identify plant lines that carry high levels of major therapeutic cannabinoids, such as cannabidiol, cannabichromene and other minor therapeutic cannabinoids like cannabidivarin and tetrahydrocannabivarin.”
Demonstrating how this technology can be used, 22nd Century and KeyGene scientists can now accelerate the selection of specific traits yielding novel cannabinoid profiles. For example, the team was able to select specific markers that predict the gender of hemp/cannabis plants with 99.6 percent accuracy.
February 10, 2021
Swedish Match Reflects on Strong Year

Photo: Swedish Match
Swedish Match posted record sales and operating profit in 2020, finishing the year with top-line growth across all product segments.
Performance was driven by strong traction for ZYN nicotine pouches in the U.S. along with double-digit operating profit growth in local currencies for the smokefree and cigar product segments in both the full year and the fourth quarter, the company said in a press release.
Covid-19-related effects are estimated to have elevated sales and operating profit for the full year as well as in the fourth quarter.
In local currencies, sales increased by 15 percent for the fourth quarter and by 17 percent for the full year. Reported sales increased by 5 percent to SEK4.14 billion ($497.12 million) for the fourth quarter and by 13 percent to SEK16.7 billion for the full year despite significant strengthening of the Swedish krona during the year versus the U.S. dollar, the Norwegian krona and the Brazilian real.
In local currencies, operating profit from product segments increased by 23 percent for the fourth quarter and by 28 percent for the full year. Reported operating profit from product segments increased by 12 percent to SEK1.7 billion for the fourth quarter and by 23 percent to SEK7.16 billion for the full year.
Operating profit amounted to SEK1.65 billion for the fourth quarter and to SEK6.99 billion for the full year. The fourth quarter of 2019 included a non-cash impairment charge of SEK367 million related to the European chewing tobacco business.
Profit after tax amounted to SEK1.24 billion for the fourth quarter and to SEK4.89 billion for the full year. The full year 2020 includes a charge of SEK286 million following an adverse ruling in a tax case.
Lars Dahlgren
Referring to the challenges presented by Covid-19, Swedish Match CEO Lars Dahlgren described 2020 as “a year of adaptability.”
“The success that we experienced in 2020 would not have been possible without the tireless dedication and ingenuity of our employees, the long-forged relationships that we have with our vendors and the continued passion and trust that our customers and consumers place in Swedish Match and its brands,” he said.
Swedish Match’s full financial report is available here.
February 10, 2021
Pyxus Releases Improved Results

Pieter Sikkel (Photo: Pyxus International)
Pyxus International announced results for its fiscal quarter ended Dec. 31, 2020.
Sales and other operating revenues were $379.6 million for the three months ended Dec. 31, 2020, up from $363.3 million for the three months ended Dec. 31, 2019.
Gross profit as a percent of sales increased to 16.5 percent for the three months ended Dec. 31, 2020, from 15.2 percent for three months ended Dec. 31, 2019.
Net loss improved 62.7 percent to $8.2 million for the three months ended Dec. 31, 2020.
Adjusted EBITDA improved 64.9 percent to $39.9 million for the three months ended Dec. 31, 2020, from $24.2 million for the three months ended Dec. 31, 2019.
Inventory decreased 11.5 percent to $771.8 million as of Dec. 31, 2020.
“Fiscal year 2021 continues to be a year of evolution for our business,” said Pieter Sikkel, Pyxus’ president and CEO, in a statement. “Since the completion of our financial restructuring, we have undergone a strategic review of all business units and categories in which we operate in order to develop a stronger, more streamlined strategy to improve financial performance.”
“We see the potential for increased leaf tobacco volume in fiscal year 2022 from countries including the United States and Brazil. In addition, the developments in the e-liquids category following the September 2020 PMTA submission deadline, paired with increased enforcement of PMTA regulation, provide an encouraging opportunity for potential future growth.”
In January, Pyxus International announced plans to divest its cannabis business in order to focus on its more profitable tobacco and e-liquid businesses.
According to Sikkel, Pyxus International continues to experience Covid-19-related disruption in its supply chain and distribution channels. “While the volume of customer orders is in line with expectations and we have adequate supply of product to meet demand, we have been impacted by procedural delays with regards to fulfillment of customer orders,” he said. “This has resulted in the timing of fulfillment of certain customer orders shifting to the fourth quarter of fiscal year 2021 and others to the first quarter of fiscal year 2022.”
Despite these challenges, the company continues to manage its working capital closely, according to Sikkel. “At Dec. 31, 2020, inventory decreased $100.1 million, or 11.5 percent, to $771.8 million when compared to Dec. 31, 2019,” he said. “Additionally, we expect our uncommitted inventory to be near the midpoint of our stated range of $50 [million] to $150 million by fiscal year end.”
February 10, 2021
All-Parliamentary Group Hears Vapor Advocates

Mark Pawsey MP and Chairman of the APPG for Vaping
Prominent tobacco harm reduction advocates Gerry Stimson (Knowledge-Action-Change), Clive Bates (The Counterfactual), John Dunne (U.K. Vaping Industry Association) and Daniel Pryor (Adam Smith Institute) attended a virtual meeting organized by the U.K. All-Party Parliamentary Group (APPG) for Vaping, a collection of MPs and peers focused on e-cigarettes.
The tobacco harm reduction advocates’ input will be used to advise the U.K. delegation to the Conference of the Parties (COP9) to the World Health Organization’s Framework Convention on Tobacco Control, which is scheduled to take place in the Netherlands this November.
Chaired by Mark Pawsey, the APPG is keen for the U.K. to defend its vaping position internationally and to promote the successes of British vaping. The expert witnesses highlighted the considerable public health benefits of harm reduction tools and the potential benefit they could provide around the world.
Tuesday’s evidence session came as the U.K. government continues its own review of tobacco regulations, meaning a busy time for advocates hoping to protect the public potential of vaping.
“I was happy to accept the invitation from the APPG because the UKVIA believe[s] we have an incredible opportunity to spread the word—that innovative, appropriately regulated vaping industries save lives,” said Dunne in a statement. “Post-Brexit Britain is newly independent in forums like COP9, and it means we can drive this positive message home like never before.”
February 10, 2021
Bonin Bough Joins PMI Board of Directors

Photo: Jakub Jirsák | Dreamstime
Philip Morris International (PMI) has appointed Bonin Bough as a member of its board of directors.
Bough is the founder and chief growth officer of growth accelerator Bonin Ventures. He has been chief growth and marketing officer of Sundial Brands (Unilever); television host of CNBC’s “Cleveland Hustles”; chief media and e-commerce officer of Mondelez International; vice president, global media and consumer engagement of Kraft Foods Group; and chief digital officer of PepsiCo.
“It is with great pleasure that we welcome a member of the new generation of digital-first executives to the Philip Morris International board of directors,” said Lucio Noto, PMI’s interim chairman, in a statement. “As we move forward to ‘unsmoke the world,’ an understanding of how to navigate unprecedented societal and commercial change is vital to our success. Bonin Bough brings us a rich background of driving innovation into and through complex organizations.”
February 9, 2021
JT to Consolidates Operations

International and Japanese operations will be run from the JT Group’s existing headquarters of the international business in Geneva (Photo: JT Group)
The Japan Tobacco Group has announced a new operating model to further strengthen the competitiveness and profitability of its tobacco business. The changes include the consolidation of the company’s current international and Japanese-domestic tobacco businesses into one tobacco business, as well as the optimization of its operations in the Japanese market.
The headquarters of the tobacco business, including the Japan market, which is currently managed from Tokyo, will be consolidated into the existing headquarters of the international business in Geneva.
“Over the years, the JT Group has consistently anticipated new challenges and managed to successfully transform itself during rapidly changing business environments,” said JT Group President and CEO, Masamichi Terabatake in a statement. “We achieved this through large-scale transformative acquisitions, such as RJRI and Gallaher, and geographical expansions into emerging markets. In parallel, we continuously enhanced our portfolio’s brand equity with a focus on global flagship brands and invested in reduced-risk products [RRP] to expand sales.
“Since I assumed office as the CEO of the group, we have made progress in several areas to strengthen our global competitiveness and business foundation, including the formation of global teams for our R&D and RRP functions as well as transforming the operating and organizational structures in the international tobacco business.
“Today’s announcement is an acceleration of our transformation and will elevate the JT Group to the next level. We are consolidating the organizations of the international and Japanese-domestic tobacco businesses to enable us to fully leverage our company-wide resources and clearly prioritize business investments globally. I am confident that this organizational structure will efficiently and effectively deliver products and services, exceeding consumer expectations. We believe this new model is essential to strengthen our worldwide competitiveness, especially in the RRP category, enabling us to deliver sustainable profit growth in the mid- to long-term.
“The RRP category in Japan is the most mature and competitive in the world, so maximizing the value offered to our consumers by strengthening our competitiveness is a clear priority. In reflection to this and the decline of the sales volume in recent years as well as a highly uncertain operating environment, we had to take some difficult yet necessary decisions,” said Terabatake.

Masamichi Terabatake,
According to the JT Group, rapid changes in the tobacco industry include perception of smoking and health, heightened tobacco regulations and tax reforms in various countries, increasingly diverse consumer preferences and expansion as well as intense competition in product development in the RRP category.
Having closely reviewed the business environment from a long-term perspective, the JT Group concluded that a revision of its strategic focus in its tobacco business is necessary. The group’s objective going forward is to operate with a stronger consumer-centric mindset and prioritize investments in heated tobacco sticks in the RRP category while maintaining necessary investments towards combustible products. The combination of the two tobacco businesses will enable efficient and effective deployment of resources within the group.
More details of the group’s planned restructuring are available here.
The JT Group reported an operating profit of ¥469.1 billion ($4.48 billion) on revenue of ¥2.09 trillion in fiscal year 2020, down 6.6. percent and 3.8 percent, respectively, from 2019. Adjusted operating profit declined 5.6 percent to ¥487 billion. At constant currency exchange rates, adjusted operating profit was up 5.5 percent to ¥544.5 billion.
The company’s international tobacco business sold 435.7 billion units in 2020, 2.3 percent less than in 2019. Volume sales in Japan declined 8.2 percent to 114.9 billion units. The company reduced-risk product sales volume increased by 0.7 billion units year on year to 3.9 billion. Its market share in the RRP category is estimated at approximately 10 percent on an offtake basis.
“Despite the challenges impacting our operations, including Covid-19, the JT Group delivered a solid business performance in 2020, driven by the relentless efforts and passion of our employees worldwide,” said Terabatake. “During this period, we grew share in most of our key markets and captured pricing opportunities. I am also pleased to report that the JT Group continued its investments to strengthen our RRP business with the introduction of Ploom S internationally and Ploom S 2.0 in Japan.
“We will further build on our solid momentum, by adopting a more focused prioritization of our investments towards heated tobacco sticks and combustibles. While we expect the operating environment in 2021 to remain highly uncertain, we expect to continue gaining market share globally both in combustibles and in RRP. Notably, our next generation device for heated tobacco sticks will be launched in Japan early in the second half of this year, followed by launches in Russia and other international markets.”
February 9, 2021
Imperial Praised for Engagement on Climate

Photo: Gerd Altmann from Pixabay
Imperial Brands has been recognized as a global leader for engaging with its suppliers on reducing carbon emissions and tackling climate change.
The business is among a group of fewer than 400 companies to be included on the 2020 Supplier Engagement Leaderboard compiled by environmental nonprofit organization CDP. This is the second successive year that Imperial has been included.
In December, Imperial maintained its position on the CDP’s Climate A List for its actions to cut emissions and mitigate climate risks. Imperial also achieved a score of A- from CDP for minimizing water use.
All companies responding to the annual CDP climate change questionnaire receive a Supplier Engagement Rating (SER) in addition to their climate change score. The SER measures how effectively companies engage their suppliers on climate change through an assessment of governance, targets, scope 3 emissions and value chain engagement.
Stefan Bomhard
“We are pleased to once again be recognized by CDP for our focus on climate and energy, this time for the work we are doing with our suppliers to help minimize their carbon footprint,” said Stefan Bomhard, CEO of Imperial, in a statement. “This reflects further great efforts from employees across the business and their commitment to deliver our ESG agenda.”
“Meaningful corporate climate action means engaging with suppliers to reduce emissions across the value chain,” said Sonya Bhonsle, global head of value chains at CDP. “Despite the challenges from Covid-19, in 2020, nearly 400 companies achieved a place on CDP’s Supplier Engagement Leaderboard. Congratulations to these companies—as Supplier Engagement Leaders, they are driving the transition toward the net-zero sustainable economy.”
February 9, 2021
Universal Reports Results

Photo: Taco Tuinstra
Universal Corp. reported net income for the quarter ended Dec. 31, 2020, of $33.3 million, compared with net income of $26 million, for the prior year’s third fiscal quarter. Excluding restructuring and impairment costs and certain other non-recurring items net income increased by $27.5 million from the comparable 2019 quarter. Operating income for the third quarter of fiscal year 2021 increased to $60.2 million compared to $44.1 million for the three months ended Dec. 31, 2019.
Net income for the nine months ended on Dec. 31, 2020, was $48 million, compared with $56.1 million for the same period of the prior fiscal year. Excluding restructuring and impairment costs and certain other non-recurring items, net income increased by $3.4 million for the nine months ended Dec. 31, 2020, compared to the nine months ended December 31, 2019. Operating income of $85.1 million for the nine months ended Dec. 31, 2020, was down from operating income of $94.8 million for the nine months ended Dec. 31, 2019.
George Freeman
“Tobacco shipments in the third quarter of fiscal year 2021 exceeded our previous expectations as customer mandated timing for some shipments forecast for the fourth fiscal quarter were accelerated into the third fiscal quarter,” said George C. Freeman, III, chairman, president and CEO of Universal Corp. in a statement. “As a result, total tobacco shipment volumes for the nine months ended Dec. 31, 2020, are similar to those of the prior year’s comparable fiscal period.
“The majority of our remaining committed tobacco orders for the 2020 crop are packed and ready to ship, and we expect sustained strong tobacco shipment volumes in our fourth fiscal quarter of 2021 barring any unforeseen events including changes in shipment timing. In addition, our uncommitted tobacco inventory levels remain within our target range. We continue to believe our adjusted operating income for fiscal year 2021, which excludes restructurings and certain costs for acquisitions, will materially exceed that for fiscal year 2020, barring any unforeseen events including shipment delays due to lack of vessel or container availability, port congestion, or Covid-19 related uncertainties.”
Universal Corp.’s board of directors declared a quarterly dividend of $0.77 per share on the common shares of the company, payable May 3, 2021, to common shareholders of record at the close of business on April 12, 2021.
February 9, 2021
Willie McKinney to Advise Labstat

Willie J. McKinney (Photo: Labstat International)
Labstat International has appointed Willie J. McKinney to its scientific and strategic advisory board. McKinney’s regulatory and scientific expertise of nicotine-containing and cannabidiol-containing products will help guide Labstat in strategy development, internal program conceptualization and internal scientific research.
“Bringing onboard someone of Dr. McKinney’s caliber underscores Labstat’s commitment to excellence in testing services,” said Michael Bond, president of Labstat International, in a statement.
McKinney, founder and CEO of McKinney Regulatory Science Advisors, is board certified in toxicology by the American Board of Toxicology. He works with clients to resolve the complex and dynamic scientific and regulatory challenges associated with preparing new product regulatory submissions. He also served on the FDA’s Tobacco Product Scientific Advisory Committee as the nonvoting representative of the tobacco manufacturing industry and was on the advisory board of the ENDS U.S. 2019 conferences.
Previously, McKinney served as vice president of global regulatory affairs for Juul Labs and as vice president of regulatory sciences for Altria Client Services.
Labstat International provides in-vitro toxicology and analytical chemistry testing services for nicotine-containing and cannabis-containing products
February 8, 2021
KT&G Posts Record Results

Photo: KT&G
KT&G posted record results in 2020 due to remarkable growth in its global markets. On Feb. 4, the South Korean company announced an operating profit of KRW1.17 trillion ($1.05 billion) on sales of KRW5.3 trillion, up 7.5 percent and 6.8 percent, respectively over the previous year.
KT&G attributes its performance to a rise in sales in overseas markets. In early 2020, KT&G the company entered the Middle East by signing a contract worth KRW2.2 trillion for seven years with a local tobacco importer. The expansion of its distribution network pushed up sales in the United States.
KT&G made inroads into 23 countries last year, increasing the number of its export markets to 103 countries. It also started exporting e-cigarettes to Russia and Japan by forging a partnership with Philip Morris International.
As a result of brisk overseas market development, the company sold more than 100 million units in annual sales in five countries including Cameroon, Israel, and Guatemala. It sold 48 billion cigarettes worth krw986.2 billion in the global market alone last year.
Domestic cigarette sales increased by 2.5 percent to 41.6 billion sticks in 2020, a development that KT&G attributes to Covid-19 related overseas travel restrictions, among other factors. South Korea’s market for heat-not-burn remained stable during 2020.
KT&G’s 2020 fourth quarter and annual earnings release is available for download here.
February 7, 2021