Tag: 22nd Century Group

  • 22nd Century Produces Homogenized Leaf

    22nd Century Produces Homogenized Leaf

    Image: Tobacco Reporter archive

    22nd Century Group has successfully produced homogenized tobacco leaf (HTL) sheet using VLN reduced-nicotine content tobacco, demonstrating a reduced-nicotine content pathway for additional large markets, such as heat-not-burn products, and as the binder or wrapper for machine-made cigars.

    “It’s time for the industry to offer adult smokers a true alternative to highly addictive nicotine products in every format,” said John Miller, president of tobacco products for the company, in a statement. “HTL is critical to the fast-growing heat-not-burn product category, where a VLN 95 percent reduced-nicotine content HTL would be a compelling alternative to the nicotine-laden tobaccos commonly used in these products. HTL is also commonly used as the binder and wrapper in the high-volume cigar market due to its greater mechanical resistance and uniformity as compared to whole tobacco leaves.”

    “Conventional tobacco products still seek to create and sustain nicotine addiction to generate sales,” said James A. Mish, CEO. “Even alternatives to conventional smoking products, such as vaping and e-cigarettes, perpetuate sales through nicotine addiction rather than giving consumers a real choice. 22nd Century wants to provide a true alternative that allows users to take control of their consumption habit once and for all by breaking the chains of nicotine addiction.”

    VLN HTL sheet product could be manufactured and sold as a raw material input or produced under license for companies interested in offering reduced-nicotine content and nonaddictive products.

  • Net Revenue Up 143 percent at 22nd Century

    Net Revenue Up 143 percent at 22nd Century

    Photo: 22nd Century Group

    22nd Century Group posted net revenues of $22 million in the first quarter of 2023, up 143 percent from the comparable 2022 quarter.

    “22nd Century is executing an aggressive commercial rollout of our FDA [U.S. Food and Drug Administration]-authorized VLN reduced-nicotine content cigarettes and a revolutionary new CDMO plus distribution business model for our hemp/cannabis business unit, the combination of which will accelerate revenue, increase gross margin and drive 22nd Century to cash profitable operating results for both business units in 2024,” said CEO James A. Mish in a statement.

     “Having clearly confirmed the incredible consumer demand for VLN and rapidly expanding pipeline of retail stores wanting to carry the brand, we are now fully focused on commercialization. We are working steadily toward commercial sales covering thousands of stores in California, Texas and Florida with a top retail chain as well as booking launch windows and orders with both existing and new chains seeking to sell VLN products across an expanding geography.

    “To support these launches and accelerate the rollout of hundreds or even thousands of new stores across multiple states within a very narrow time frame, we have now secured agreements with the No. 1 and No. 2 national-scale c-store distribution providers, which are already taking warehouse stocking quantities of VLN for customer distribution. These actions provide a clear pathway for a rapid acceleration in VLN sales activity and our goal of entering up to 18 states by year-end 2023, which we believe will make VLN available in almost 60 percent of the $80 billion U.S. tobacco market.

     “We believe 22nd Century is poised for phenomenal growth this year in both our tobacco and hemp/cannabis businesses. As such, we are introducing our first revenue guidance, calling for full-year 2023 revenue of $105 million to $110 million, representing a 69 percent to 77 percent increase from $62.1 million in 2022. Our growth will be driven by the rapid stocking and ramp up of new VLN customers, new Pinnacle CMO sales, continued record cannabinoid ingredient volumes, startup of our CDMO+D hemp/cannabis agreements and a full year of GVB sales.”

     

  • Revenues Up 143 Percent at 22nd Century

    Revenues Up 143 Percent at 22nd Century

    22nd Century Group reported net revenues of $22 million for the first quarter of 2023, up 143 percent from the comparable 2022 quarter.

    “22nd Century is executing an aggressive commercial rollout of our FDA authorized VLN reduced nicotine content cigarettes and a revolutionary new CDMO plus distribution business model for our hemp/cannabis business unit, the combination of which will accelerate revenue, increase gross margin and drive 22nd Century to cash profitable operating results for both business units in 2024,” said CEO James A. Mish in a statement.

    “Having clearly confirmed the incredible consumer demand for VLN and rapidly expanding pipeline of retail stores wanting to carry the brand, we are now fully focused on commercialization. We are working steadily toward commercial sales covering thousands of stores in California, Texas and Florida with a top retail chain, as well as booking launch windows and orders with both existing and new chains seeking to sell VLN products across an expanding geography.”

    “We believe 22nd Century is poised for phenomenal growth this year in both our tobacco and hemp/cannabis businesses. As such, we are introducing our first revenue guidance, calling for full-year 2023 revenue of $105 million to $110 million, representing a 69 percent to 77 percent increase from $62.1 million in 2022.

    “Our growth will be driven by the rapid stocking and ramp up of new VLN customers, new Pinnacle CMO sales, continued record cannabinoid ingredient volumes, start-up of our CDMO+D hemp/cannabis agreements and a full year of GVB sales.”

  • 22nd Century Adds Private Label Brand

    22nd Century Adds Private Label Brand

    John Miller
    (Photo: Tobacco Reporter archive)

    22nd Century Group has started producing a new private label premium cigarette brand, Pinnacle, under a new manufacturing agreement. Pinnacle is for sale at a leading U.S. gas station convenience store chain comprising almost 1,700 stores in 27 states.

    “We are excited to launch a new store-brand product with one of the largest convenience store chains in the country and one of the highest volume cigarette points of sale per outlet square foot,” said John Miller, president of tobacco products at 22nd Century Group, in a statement.

    “We believe that working with premier retailers on conventional products like Pinnacle offers value to current adult smokers as we aggressively expand our flagship product, FDA [Food and Drug Administration]-authorized VLN reduced-nicotine cigarettes designed specifically to help adult smokers to smoke less,” said Miller.

    22nd Century Group provided the trademarked brand name and predicate tobacco blend for the new Pinnacle product, which is produced at its manufacturing operations in North Carolina. Pinnacle is approved in 22 states to date where the retail partner has stores and is available in approximately half of eligible stores to date as availability continues to expand.

    “Pinnacle represents a key opportunity to further scale our revenue and margins, advancing 22nd Century toward its goal of cash positive operations,” said 22nd Century Group CEO James A. Mish.

    “The rollout of this new brand into such a large number of stores across more than two dozen states also demonstrates how we expect to benefit from expanded utilization of our new national scale distribution relationships for our VLN products, supporting placement into a broader range of well-known retail points of sale for both our conventional cigarette products and our new VLN 95 percent reduced-nicotine content products designed specifically for adult smokers who want to smoke less,” Mish said.

  • 22nd Century Enters Agreement with Cookies

    22nd Century Enters Agreement with Cookies

    Image: Tobacco Reporter archive

    22nd Century Group announced a new three-year exclusive license and distribution agreement with Cookies, a global hemp/cannabis company. The brand was founded in 2010 by CEO, rapper and entrepreneur Berner and Bay Area breeder and cultivator Jai.

    “This transformational strategic license, manufacturing and distribution agreement with Cookies establishes the foundation of an innovative new CDMO plus distribution business model for 22nd Century at a time when mass market channels urgently need to find new, high-margin, high-velocity products to meet the rapidly growing consumer demand for CBD products,” said James A. Mish, CEO of 22nd Century. “Our complete, vertically integrated capabilities represent the first and only industry option providing Cookies’ category-leading CBD brand with a single-source, national solution across its entire family of products.”

    “We are incredibly excited to expand our partnership beyond GVB with the 22nd Century Group. They have undoubtedly put together one of the most impressive teams in the space, and we look forward to expanding the national distribution of Cookies non-THC products together,” said Parker Berling, president of Cookies.

    The exclusive license with 22nd Century covers all Cookies branded non-Delta-9 THC, hemp-derived cannabinoid consumer packaged goods, including sourcing of all ingredients and APIs; white-label manufacturing of vapes and other CBD products; and category management through retail distribution.

    GVB Biopharma, a 22nd Century company, has manufactured various Cookies products for the past three years and under this new agreement will manufacture Cookies’ market-leading products, expected to account for more than half of Cookies’ non-Delta-9 cannabinoid sales.

    The integrated go-to-market sales and distribution components of the agreement will leverage 22nd Century’s veteran consumer packaged goods sales team, which plans to distribute Cookies products in up to 18 markets targeted for the rollout of the company’s innovative VLN products during 2023.

    The CPG sales team will target a market of approximately 60,000 retail stores consisting of independent retail, discount tobacco outlets and vape shops in nonrecreational states serviced by its network of top regional distributors and chain discount tobacco outlets. Products will also be available on the Cookies e-commerce website.

    “Cookies products are a natural fit to the same points of sale as our FDA [U.S. Food and Drug Administration] MRTP [modified-risk tobacco product]-authorized VLN products. The combination of these two offerings will enhance our sales team’s product portfolio with a larger suite of small-footprint, high-velocity, high-margin CBD products, with Cookies’ internationally recognized products serving as a cornerstone brand as we build out this innovative hemp/cannabis CDMO+D platform,” said John Miller, president of tobacco products at 22nd Century.

  • 22nd Century Reports Quarterly Results

    22nd Century Reports Quarterly Results

    Photo: wichayada

    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.

  • 22nd Century Group Secures Financing

    22nd Century Group Secures Financing

    Photo: vetkit

    22nd Century Group announced a new $21 million senior secured debenture financing to support increased working capital needs related to the significant growth outlook in both its VLN and GVB business lines. The new three-year financing was issued at a 5 percent original issuance discount, will bear cash interest at a rate of 7 percent per year and commence principal amortization in the second year at a rate of 2 percent of the original balance per month. The company has the option to redeem the facility early starting in the second year.

    “We anticipate significant revenue growth in both of our core business lines and believe this financing will provide the appropriate working capital for the year ahead,” said Hugh Kinsman, chief financial officer, in a statement. “New retail partners already in talks to launch VLN in additional states as part of our national-scale distribution capabilities are expected to increase our manufacturing and inventory requirements. Additionally, the continued growth in customer demand at GVB has increased our capital needs for bulk ingredients and inventory going forward.”

    In conjunction with the new credit facility, 22nd Century has also extended the maturity of $2.7 million in legacy seller notes assumed with its acquisition of GVB Biopharma to mid-2024. The company will file a Form 8-K with the Securities and Exchange Commission with complete details of the new debt facility and the terms of the refinanced legacy seller notes.

  • 22nd Boosts Cultivation for New Zealand

    22nd Boosts Cultivation for New Zealand

    Photo: Vasiliy Koval

    22nd Century Group has accelerated a major seed cultivation project for its proprietary reduced nicotine content tobaccos to support local authorities as they work to implement New Zealand’s new reduced nicotine content law starting from this year. The seed will be used to rapidly scale the availability of 22nd Century’s reduced nicotine content tobacco leaf to manufacture cigarettes compliant with New Zealand’s new reduced nicotine content law.

    “New Zealand’s groundbreaking new law will require a sizeable expansion of reduced nicotine content tobacco leaf production to address market needs,” said John Miller, president of tobacco products for 22nd Century Group, in a statement.

    “22nd Century’s ultra-low nicotine content tobaccos are the only commercial scale naturally grown tobacco varieties ready to meet the New Zealand law today. We are moving immediately to ensure sufficient leaf capacity of our reduced nicotine content tobacco to serve the entire New Zealand market as the new law is implemented.”

    22nd Century’s proprietary reduced nicotine content tobacco varieties grow with 95 percent less nicotine than the commercial tobaccos used in making cigarettes for the New Zealand market. Significantly, 22nd Century’s non-GMO tobacco varieties are already compliant with the New Zealand law, which requires all combustible cigarettes to contain less than 0.8 mg of nicotine per gram of tobacco, inclusive of testing variance.

    22nd Century’s expanded growing program, centered in the heart of the U.S. tobacco belt, will produce additional seed sufficient for approximately 2 billion sticks, the entire annual New Zealand cigarette market volume.

    “New Zealand has taken the global lead in tobacco control through its new law, which will reduce the harms of smoking and improve public health and health equity, particularly among minority communities that are disproportionately burdened with the health and economic harms of smoking,” said John D. Pritchard, vice president of regulatory science at 22nd Century.

    “As we increase quantities of our reduced nicotine tobacco seed, 22nd Century is demonstrating conclusively that the tobacco supply chain will pivot quickly to support the ramp up of the national-scale public health program,” Miller added.

  • 22nd Century Acquires RX Pharmatech

    22nd Century Acquires RX Pharmatech

    Image: mikefoto58 | Adobe Stock

    22nd Century Group acquired privately held RX Pharmatech (RXP), a leading United Kingdom distributor of cannabinoids with 1,276 novel food applications with the U.K. Food Standards Agency (FSA), according to a company press release. Terms of the agreement include an up-front payment of $650,000 in cash and stock and a three-year equity earn-out based on revenue milestones.

    “The acquisition of RXP establishes GVB as the leader in the U.K. Consumer Products isolate market, which is expected to reach an estimated $1.26 billion by 2025 and secures direct access to key European markets for CBD products,” stated James A. Mish, CEO of 22nd Century Group. “RXP has exclusively utilized GVB’s technical data and worked closely with the FSA on developing their highly effective application and compliance programs that secured 1,276 novel food applications, the second most CBD products to pass through the first round of approval. We look forward to leveraging their leadership team’s vast cannabis industry experience and strong relationships with U.K. and EU regulatory agencies as we move forward.”

    Mish continued, “We expect the addition of RXP will be immediately accretive to the company and facilitate significant operating efficiencies leading to additional revenue and gross margin improvement. In particular, the addition of RXP with our recently opened distribution facility in the Netherlands will allow us to scale our operations and capture more market share in the growing European Consumer Products market.”

    RXP’s products include CBD isolate and numerous variations of finished products like gummies, oils, drops, candies, tinctures, sprays, capsules and others.

  • 22nd Century Submits CBD Drug Master File

    22nd Century Submits CBD Drug Master File

    Image: Tobacco Reporter archive

    22nd Century Group filed a U.S. drug master file (DMF) to the U.S. Food and Drug Administration for cannabidiol (CBD) API from GVB Biopharma, a 22nd Century Group company, according to a company press release.

    “GVB Biopharma is widely recognized for the quality and consistency of its Cannabinoid extracts and ingredients,” said James A. Mish, CEO of 22nd Century. “We are now leveraging these capabilities with our DMF filing to meet the increasing regulatory demands of the supplements markets.”

    Additionally, 22nd Century and GVB Biopharma have entered into an agreement with Cannabinoid API Solutions (CAS) and Transo-Pharm for global sales, marketing and distribution of GVB’s Cannabinoid APIs. Transo-Pharm is a well-established supplier and distributor of pharmaceutical APIs to a broad portfolio of branded and generic finished drug product manufacturers, including more than 75 current active, ongoing development programs.

    “The partnership with Transo-Pharm will accelerate opportunities to supply our APIs to the largest and most innovative pharmaceutical and consumer goods manufacturers in the world,” said Mish.