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Tag: 22nd Century Group

  • 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.

  • 22nd and Core-Mark and Eby-Brown Partner

    22nd and Core-Mark and Eby-Brown Partner

    Photo: 22nd Century Group

    22nd Century Group has established new distribution partnerships with Core-Mark International and Eby-Brown Company, two of the largest convenience store (c-store) distributors in the United States.

    “22nd Century’s new partnership agreements with two of the largest, most respected convenience store distributors in the United States make possible the launch of VLN cigarettes in virtually every key U.S. market we are targeting in our state-by-state, region-by-region rollout strategy,” said John Miller, president of tobacco products for 22nd Century Group, in a statement. “We are proactively working with highly recognized retail chains that want to add VLN to their cigarette sets, many of which are already customers of Core-Mark and/or Eby-Brown, thus streamlining the rollout process.”

    The new partnerships provide nationwide distribution capabilities for VLN via 31 Core-Mark and Eby-Brown warehouses. Additionally, 22nd Century will attend 11 regional trade shows sponsored by the distributors in 2023, providing 22nd Century with the opportunity to introduce VLN to thousands of Core-Mark’s and Eby-Brown’s independent retail and chain store operators.

    “Approximately 70 percent of the estimated 39 million adult U.S. smokers want to stop smoking, though only a tiny fraction are able to quit each year,” explained James A. Mish, CEO of 22nd Century Group. “22nd Century’s proprietary reduced-nicotine tobacco technology has enabled us to develop a truly revolutionary VLN product designed to help smokers smoke less. The c-store channel is the largest point of purchase for cigarette products, and we look forward to partnering with Core-Mark, Eby-Brown and other distributor partners to continue placing our reduced-nicotine content cigarettes in a growing number of stores.”

  • 22nd Welcomes New Menthol Timeline

    22nd Welcomes New Menthol Timeline

    Image: nanzeeba

    22nd Century Group is poised to greatly benefit from the recent advancement of the U.S. Food and Drug Administration’s proposed ban on menthol as a flavoring agent in combustible cigarettes to final rule status, the company wrote in statement published on its website today.

    “The most recent updates to the Biden administration’s Unified Agenda on Regulatory and Deregulatory Actions include major advancements in the FDA’s proposed tobacco harm reduction policies in 2023,” said John Miller, president of tobacco products for 22nd Century Group. “Advancement of FDA’s proposed menthol ban could position VLN Menthol King as the only combustible menthol tobacco cigarette on the market, providing a critical off-ramp to the estimated more than 15 million menthol smokers in the U.S.”

    Menthol cigarettes account for an estimated $26 billion in retail sales. Menthol is also known to enhance nicotine’s addictive effects, making it more difficult to quit, and a disproportionate amount of menthol smokers are members of minority groups, particularly African Americans, 22nd Century wrote on its website.

    “FDA’s proposed menthol policy specifically contemplates exempting certain products from the ban, such as our MRTP authorized VLN cigarettes, providing a critical off-ramp opportunity for adult menthol smokers,” stated John Pritchard, vice president of regulatory science for 22nd Century Group. “Without an off-ramp product, both research and real-world experience show the vast majority of menthol smokers would simply transition to traditional combusted cigarettes. 22nd Century’s MRTP authorization documents how VLN products can help people to smoke less, leading to a true reduction in smoking in line with FDA’s important public health goals.”

    Advancement of FDA’s proposed menthol ban could position VLN Menthol King as the only combustible menthol tobacco cigarette on the market.

    John Miller, president of tobacco products, 22nd Century Group

    The Unified Agenda also indicates that the FDA intends to advance its transformative reduced nicotine content standards later in 2023, which seeks to limit the nicotine levels in all cigarettes to a level considered “minimally or non-addictive.” Both of these standards are considered game changers for public health and could be extremely favorable for 22nd Century Group due to VLN’s 95 percent reduced nicotine content.

    22nd Century has been expanding sales of VLN cigarettes across five states with anchor partners including Circle K and Smoker Friendly. Following the company’s stated growth strategy to expand to 12-15 states during 2023, 22nd Century is actively engaged with multiple industry leading distribution partners and retail store chains wanting to introduce VLN products to adult smokers in both existing and new markets.

    “The proactive and forward-thinking policies of the FDA have the power to reduce the harms of smoking and save millions of lives,” said Miller. “22nd Century Group continues to fully support these policies, and VLN® reduced nicotine content products demonstrate that these programs are 100 percent achievable.”

    22nd Century Group’s VLN brand cigarettes are the only combustible cigarettes that the FDA has authorized as modified risk tobacco products. The company’s VLN King and VLN Menthol King brands contain 95 percent less nicotine than traditional addictive cigarettes.

    A final decision on the menthol ban is expected in August 2023.

  • Miller to Lead 22nd’s Tobacco Business

    Miller to Lead 22nd’s Tobacco Business

    Photo: 22nd Century Group

    22nd Century Group promoted John Miller to president of its tobacco business unit on Nov. 11, reports the Winston-Salem Journal, citing a Nov. 17 regulatory filing. Miller was hired by the manufacturer in May.

    Miller has more than 35 years of experience in the tobacco and consumer packaged goods industries, including most recently as president and chief executive of Swisher International, which makes cigars and smokeless tobacco products.

    He also worked for more than 20 years in various management positions at U.S. Smokeless Tobacco Co. through its acquisition by Altria Group Inc. in 2009.

  • GVB Opens Distribution Facility in Netherlands

    GVB Opens Distribution Facility in Netherlands

    Photo: vchalup

    GVB Biopharma has opened a distribution facility in the Netherlands to support its growing business in Europe, the Middle East and Africa. The new facility will increase customer access to GVB’s hemp/cannabis products, speed up transaction flow and optimize cross-border tax and customs treatment, according to GVB parent company 22nd Century Group.

    Recent increases in GVB’s U.S. manufacturing capacity are complementary to the advent of the company’s Netherlands distribution facility, the company noted. Additional capacity is in part earmarked to satisfy increasing demand in European markets where margins are higher than in the U.S.

    “We are excited to expand our business operations in Europe, allowing our customers and partners to access quality products in a more efficient manner,” said 22nd Century Group CEO James A. Mish in a statement.

    “With our new Netherlands distribution facility, we can now deliver product to our partners in half the time and better serve our growing customer base with quality distillate and isolates. In Europe, the hemp/cannabis industry is expanding rapidly and is expected to reach €3.2 billion [$3.33 billion] by 2025. Our new facility will allow us to capture more of that market share, scale our operations and expand our customer base in this region.”

  • 22nd Century Reports Third-Quarter Results

    22nd Century Reports Third-Quarter Results

    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.”