Tag: 22nd Century Group

Management Changes at 22nd Century

Photo: Naka
22nd Century Group is changing its management team as the company accelerates growth in its reduced nicotine content tobacco business. President and Chief Operating Officer Michael Zercher will depart the company effective Sept. 30, 2022. John Miller, who leads 22nd Century’s tobacco business team, will assume the tobacco-related duties of the chief operating officer’s role while CEO James A. Mish will assume the title of corporate president.
“With exceptionally successful VLN pilot results in hand, 22nd Century is expanding sales and planning rollouts in strategic regions across the United States,” said Mish in a statement. “In order to coordinate all of the critical elements of this expansion plus additional planned market launches, John Miller, who already leads our tobacco product, marketing and partnership efforts, will assume full operational responsibility for the tobacco product lines, bringing to bear his more than 30 years of industry experience to direct a fully integrated national VLN sales strategy.
“On behalf of the board of directors and the entire company, I thank Mike for his work at 22nd Century Group, including his important role in helping bring VLN through the regulatory process to secure the first and only FDA modified-risk tobacco product marketing order ever granted to a combustible cigarette.
“Mike has also been instrumental in developing our initial VLN industry partnerships and successful Chicagoland pilot program,” said Mish. “As a result, 22nd Century represents a completely new type of tobacco business focused on disrupting the industry and, most importantly, helping adult smokers to smoke less. We thank Mike for the incredible success he has helped the company achieve and wish him well in his future endeavors.”
September 7, 2022
22nd Century Launches VLN in Colorado

Photo: 22nd Century Group
Encouraged by the strong results of its pilot program in Chicago, 22nd Century Group will launch its VLN low-nicotine cigarette in Colorado and expand sales of the brand in Illinois.
In addition to its existing partnerships with cigarette retailers Circle K and Smoker Friendly, 22nd Century will announce two distribution partners as part of its launch in Colorado.
To date, the company has already completed state attorney general registrations for VLN in 44 U.S. states and the District of Columbia.
“We are excited to expand our VLN launch to Colorado with both current and new partners. The overwhelmingly positive feedback from consumers during our Chicago pilot has demonstrated impressive demand and rapid market entry for VLN as the first and only tobacco cigarette that actually helps adult smokers smoke less,” said John J. Miller, president of 22nd Century’s tobacco business, in a statement
“Extrapolating our strong pilot market results to a national scale with additional points of sale and geographic coverage gives us confidence we can disrupt and rapidly take significant share in the more than $80 billion U.S. market and $800 billion global tobacco market to create substantial value for our stakeholders.”
In December 2021, the U.S. Food and Drug Administration authorized 22nd Century to market its VLN King and VLN Menthol King cigarettes as modified-risk tobacco products, making them the first combustible products to receive such a designation.
September 7, 2022
VLN Recognized as ‘Best New Product’

Photo: 22nd Century Group
22nd Century Group’s VLN King and VLN Menthol King reduced-nicotine content cigarettes have been awarded Best New Product in the cigarette category by Convenience Store News.
Now in its 26th year, the Best New Products Awards recognize the most innovative, high-quality products introduced into the convenience channel to meet consumers’ evolving needs and fit a convenience store’s value proposition. This is the first Convenience Store News award in the cigarette category.
“We are honored and excited that VLN was recognized with the Best New Product award in the cigarette category by Convenience Store News,” said John J. Miller, president of 22nd Century’s Tobacco Business, in a statement.
“VLN is truly a game-changer, and this award confirms the market’s interest in VLN and their interest in new tools to help adult smokers smoke less. Our VLN pilot has exceeded expectations in Chicago, and we are now expanding our VLN launch statewide in Colorado as we work to broaden availability of this important new product.”
The Best New Products Awards are judged by a panel of consumers on value, convenience, appearance and packaging along with attributes such as taste and ingredients. Judging was supervised and tallied by Past Times Marketing, a New York-based consumer research and product testing firm.
August 25, 2022
22nd Century to Ring Nasdaq Closing Bell

Photo: Mat Szymański
Representatives of 22nd Century Group will ring the Nasdaq Closing Bell on Aug. 26, 2022, celebrating the launch of VLN reduced-nicotine cigarettes.
In December 2021, the U.S. Food and Drug Administration gave 22nd Century Group permission to market VLN cigarettes as modified-risk tobacco products, making them the first combusted cigarettes to be authorized as such and the second tobacco products overall to receive “exposure modification” orders.
Since that time, the company has launched VLN cigarettes in various pilot markets, including in the Chicago area.
According to 22nd Century Group, the Chicago pilot has exceeded expectations, leading the company to accelerate and expand its launch plans to the state of Colorado.
“Our VLN pilot program in Chicago has confirmed the market’s interest in VLN as adult smokers look for new tools to help them smoke less, an important step to improving overall public health,” said John J. Miller, president of 22nd Century’s tobacco business, in a statement.
“Based on the better-than-expected results of our pilot, we are accelerating our launch plans and commencing sales in the state of Colorado through multiple partners committed to helping us offer adult smokers a real choice, a product that can help them smoke less.”
August 24, 2022
22nd Century Reports Second-Quarter Results

Photo: 22nd Century Group
22nd Century Group reported net revenue of $14.48 million for the three months ended June 30, 2022, up 73 percent over the comparable 2021 quarter. Gross profit was $892,000 for the quarter compared with $449,000 for the second quarter of 2021.
The increase in net revenue was due to increased contract manufacturing volumes as well as the addition of GVB Biopharma revenue for approximately half of the second quarter. 22nd Century Group acquired GVB Biopharma on May 13.
Revenue from tobacco-related products was $10 million, an increase of 19 percent from 2021. Revenue from hemp/cannabis-related products was $4.5 million compared to zero in the prior year, reflecting a partial quarter of GVB revenues.
22nd Century Group said it will step up the rollout of its VLN King and VLN Menthol King reduced-nicotine content cigarettes. After receiving permission from the Food and Drug Administration in December to market its VLN brands as modified-risk tobacco products (MRTPs), 22nd Century started a pilot program to sell the product at select Chicagoland Circle K stores.
“Our VLN pilot in Chicago is exceeding expectations, driving us to accelerate and expand our launch plans,” said 22nd Century Group CEO James A. Mish in a statement. “The pilot and consumer studies have made clear that our approach focusing on awareness, education and trial is working with adult smokers. We are now testing specific offers designed to increase trial and repeat purchase among existing smokers looking to smoke less/reduce their nicotine consumption while also expanding our presence in Chicago and the state of Illinois.
“We are also expanding our VLN launch to the state of Colorado ahead of plan. Colorado offers a reduced taxation rate for MRTP-authorized products, providing a favorable cost structure for our VLN products in that state as compared to traditional premium cigarettes.
“Additionally, and more importantly, we are working closely with a major consumer packaged goods distributor and a longstanding specialty distributor covering convenience, grocery and drug stores across the state, giving us full access to a broad range of more than 3,000 targeted statewide potential points of sale.”
August 10, 2022
Kinsman Named CFO at 22nd Century

Photo: akub Jirsák | Dreamstime.com
22nd Century Group has appointed R. Hugh Kinsman as chief financial officer. Kinsman is currently CFO of GVB Biopharma, which 22nd Century acquired in May.
“The integration of GVB Biopharma is proceeding very well, and we are excited to build on Hugh’s success at GVB by elevating his financial leadership role to 22nd Century as a whole,” said James A. Mish, chief executive officer of 22nd Century Group, in a statement.
Kinsman has extensive experience as a senior executive in roles ranging from acting CFO of a publicly traded battery manufacturer with operations in the U.S., Switzerland and Italy, to the CFO of West World Media, a private data aggregation company that was acquired for $60 million.
He also worked at GE Capital where he oversaw over a billion dollars in infrastructure, energy, and communications investments. He began his career at Asher & Company, CPAs (now BDO) and has held a certified public accountant designation.
He earned his Bachelor of Science degree in finance from Penn State University and an MBA from Cornell University.
June 16, 2022
In the CatBird Seat

Photo: 22nd Century Group
A pioneer in nicotine reduction technology, 22nd Century Group is well-positioned as the FDA mulls a mandate for minimally addictive cigarettes.
By Taco Tuinstra
22nd Century Group appears to be a company whose time has come. With a fresh modified-risk tobacco product (MRTP) marketing order for its VLN (very-low-nicotine) cigarettes—the only such authorization granted to a combustible tobacco product to date—and a profound understanding of nicotine reduction technologies, the company is well positioned to benefit from the U.S. Food and Drug Administration’s plan to require tobacco companies to reduce the nicotine in their cigarettes to minimally addictive levels.
22nd Century Group’s hemp/cannabis business, too, has been on a roll, boosted by spreading legalization of the product and new acquisitions. Tobacco Reporter spoke with John Pritchard, 22nd Century Group’s vice president of regulatory science, about the MRTP process, the company’s plans for VLN cigarettes and the company’s views on tobacco harm reduction.
Congratulations on the MRTP marketing orders for your VLN cigarettes. What steps have you taken to commercialize the product since December? Please comment on your plans for the United States and South Korea. Why did you choose South Korea as your first foreign market? And what have you learned from your pilots in the U.S. and South Korea thus far?
Since April 2022, we have launched our VLN cigarettes in 159 Circle K stores as part of a pilot program. Here, we can test our marketing mix to understand what the most effective way to reach adult smokers with our authorized product claims. Based upon the results of the pilot market here in the United States, we will be working closely with Circle K, our launch partner in the convenience channel, to further develop how to take the brand nationally and best appropriately service the 68 percent of adult smokers who want to smoke less.
I am happy to report that some early learnings include: 1) A measurable percentage of VLN purchases are in the carton format, even within a high tax state. We believe this is because adult smokers who are committed to smoking less are believing in the brand proposition, understand the claims the FDA authorized VLN with and how the product can help them. 2) For many years, mainstream news publications have typically not or desired not to cover tobacco and nicotine products in their publications. However, given the unique proposition of VLN, it has received widespread coverage in the Chicago Tribune, Crain’s Chicago Business, Fox 32 Chicago, WBEZ and many other local publications. We were even acknowledged by the Chicago Medical Society’s president as a product that due to the FDA’s authorization and review of our materials is something doctors should be taking seriously with their patients.
Our introduction to the South Korean market was centered around a variety of commercial and demographic criteria where one in three adult men are smokers. This market is in its early phases, and I look forward to providing detail as we move ahead.
What other markets are you considering internationally? For example, are you eyeing New Zealand, which plans to mandate lower nicotine levels in cigarettes?
We have currently launched VLN in South Korea. We absolutely commend the progress of the New Zealand government and their plans to reduce the harm caused by smoking as well as the wider initiatives they are pursuing. While no cigarette is a safe cigarette, VLN contains 95 percent less nicotine, the addictive component of cigarettes, and our proprietary tobacco genetics ultimately make possible New Zealand’s forward-thinking approach to harm reduction as well as compliance with such product standards there or elsewhere.
That said, we are taking an iterative approach to our commercial expansion and [remain] focused on the importance of the U.S. pilot. Beyond that, we have identified numerous international markets that we are continuing to evaluate; at this point, we will not comment in detail about them just yet. We will, however, be attending the Intertabac Tradeshow in Dortmund, Germany, this fall and are looking forward to meeting with specialty tobacco distributors in attendance who would like to diversify their portfolio of products with a product authorized by the United States FDA to help adult smokers smoke less.
You had been anticipating MRTP designation for some time. What actions did you take in the run-up to authorization to prepare for increased production and sales? Please comment on the expansion of your low-nicotine, tobacco growing operations, the installation of new testing equipment, partnerships with retailers and your move to a new headquarters.
We were always highly confident that we would secure an FDA authorization, given the comprehensive scientific evidence base that has been established, both from our own research and the decades-long interest and clinical studies by health agencies and public health researchers. Moreover, we have established a strong regulatory and compliance function that has been fully supported by our executive team and board.
Drawing closer to the final marketing granted orders, we built out our commercial team, bringing on board highly experienced individuals with a unique blend of knowledge of the tobacco sector and emphatic support for how the product could help adult smokers. These hires include industry experts and disrupters for our commercialization team, including John J. Miller, previously with Swisher International and UST; John Ellegate, previously of Kretek International and R.J. Reynolds; and Sam Morales, previously [of] Cannadips, Swisher International and Drew Estate.
On the operations side, we’ve planted a record crop acreage this year to be able to support our national launch plans. We have also made substantial investments elsewhere in our manufacturing base. Our factory, for example, utilizes state-of-the-art manufacturing equipment, robust manufacturing processes and quality measures to be able to produce VLN reduced-nicotine tobacco cigarettes at the same speed and scale as conventional high-nicotine cigarettes.
Please describe your experience going through the MRTP process. What was good about it, and what parts need improvement? What would you advise other players considering an MRTP application?
Well, it wasn’t particularly easy—a classic British understatement—as those whom I worked with on the MRTP project know only too well. The modified-risk tobacco product application process is certainly the most rigorous and scientific process I’ve ever been a part of in my tobacco career. While it is a long and multistep process, we acknowledge that FDA had a vast amount of scientific literature to review—much of which was done whilst FDA managed the needs and disruption caused by Covid. This attention to detail and thorough review is essential because it allows the industry, the trade and—with product introduction—the adult consumer to have confidence and trust in the statements authorized by the FDA and how we describe our product.
Since launching, we’ve seen numerous points of view published by the trade in regard to our product and its proposition to adult smokers—the rigor of the MRTP application process is incredibly important because it allows the FDA to have the loudest voice in the room, so to speak, and helps trade partners and adult smokers receive and understand messages which are truly based in science. I particularly enjoyed working with a range of subject matter experts and seeing their shared enthusiasm for what we were working to achieve. The profound public health impact of cigarette addiction in the U.S. and elsewhere was and remains a significant motivation for me and for the team.
As for advice to other companies, I remain fully committed to reducing the harm caused by smoking, and [I] encourage all companies with appropriate products to utilize the MRTP application pathway. We are not a large company when compared to most U.S. tobacco interests and yet were able to navigate the complexities and challenges to bring something new and needed to adult smokers. Adults need access to and choice of alternative products that are supported by a robust evidence base, and we believe that having more MRTP-authorized products in the market will enable the industry to more rapidly move adult smokers to smoking less or to switch to using less harmful products [and] thus ultimately help end cigarette addiction.
What, if anything, did you learn from the experiences of PMI and Swedish Match in the wake of their IQOS and General Snus MRTP authorizations? Will you market your product differently?
In considering other MRTP applications, it was apparent that while there are statutory requirements that are cross-cutting for all applications, each individual product that has been authorized or that is currently under review by FDA raised different public health and scientific questions. To that end, it was important to recognize what FDA’s concerns were or could be and ensure that we responded earnest[ly] and fully to these with appropriate evidence.
At the same time, we are grateful to the many researchers and experts within health agencies and academia for their meticulous work that contributed to the evidence base for our product, with many of such studies addressing key public health questions relating to reduced-nicotine content products.
As I am sure you have seen recently, PMI has made an offer to acquire Swedish Match, including both the innovative modern oral ZYN brand and the heritage General Snus brand—this leaves 22nd Century Group as the only other company in the world with an MRTP authorization from the FDA. The opportunity between General Snus versus VLN is entirely different. General Snus provides an offramp for interested adult smokers to continue with their nicotine consumption but changes their form factor or modality greatly, thereby reducing their exposure to combustion.
VLN provides a complete offramp from nicotine since each cigarette does not contain enough nicotine to create or sustain addiction, allowing the adult smoker to make the switch to VLN and to reduce their daily cigarette consumption. So in this regard, we do not see other MRTP products as direct competition so much as representing wider industry progress toward a future where cigarette addiction is no longer a public health disaster.
Where do you see VLN in the constellation of reduced-risk products? How will VLN cigarettes help reduce the public health toll of smoking?
It’s important to first understand that the industry has failed many adult smokers through its innovation to date. “But what about …?” I hear you say. Well, “one swallow does not a summer make,” and with over a billion smokers globally, there is clearly much to be done before the industry congratulates itself just yet.
Moreover, much innovation is sold to wealthy countries and excludes poorer countries where some companies seem entirely content to aggressively market highly addictive cigarettes. While product innovations containing nicotine—including vapor, pouches, gum, lozenges—and other modern oral products have gone some way to reducing smoking, general mistrust of the industry, contradictory corporate activity as well as willful misrepresentation of the science by some well-known anti-tobacco groups all work against the consumer and by extension the public health interest.
I am fully in favor of whatever means an adult smoker utilizes to help them reduce or cease their consumption of highly addictive combustible products. We should acknowledge that all responsible industry members share a similar end goal, but the path we take with our adult customers is demonstrably different; there is no “one size fits all.” I believe it is important that all product solutions that are backed by science and appropriately regulated must be made available to adult smokers to reduce the harm caused by cigarette addiction.
Some tobacco harm reduction advocates contend that VLN’s MRTP diverts smokers from better choices, stating that “people smoke for the nicotine but die from the tar.” What is your response to such criticism?
It’s always painful to see the industry as a whole posture and seek to create black and white narratives around an issue that is everything but binary. Nicotine gum was developed back in the 1970s and has doubtless helped many smokers even with the low efficacy of the product—and yet there are still more than $700 billion a year worth of cigarettes sold globally. The same can be said of vape technology, which has existed in multiple formats for over a decade. While millions have switched to vape, tens of millions of Americans still smoke highly addictive cigarettes.
So for us, VLN addresses a unique adult smoker need, which is not asking the adult smoker to switch to a new form factor or modality in their journey but simply asking them to make a switch to [a] product that contains significantly less of the addictive substance in cigarettes. With over 50 clinical studies, and now the authorization by the FDA that VLN helps adult smokers smoke less, it is quite clear to me that the criticism is not based on the science of our product.
Criticism of our product approach or other options by some industry voices or their familiars may play well with the gallery at conferences or other echo chambers but does not serve the interests of the individual smoker and so is ultimately self-defeating, despite their self-styled tobacco harm reduction approach. You know who you are.
I would encourage all adult smokers to use whichever product or products they feel will best help them end their use of highly addictive cigarettes and, as always, people concerned about their cigarette addiction should speak with their healthcare providers – as they can provide access to a range of other Rx product options. Our goal is simple: to make VLN available as a choice to adult smokers alongside other appropriately regulated alternative products that make up the MRTP set; people want and deserve options not dogmatic opinions.
22nd Century has repeatedly said it is willing to license its reduced-nicotine tobacco technology to other cigarette manufacturers. Has the industry expressed interest?
You’ll appreciate that at this time, I will not be sharing specific details. What I can say is that since the FDA has announced its intention to ban menthol cigarettes along with flavors in other tobacco products, we have had an incredible amount of outreach from the industry and trade. It’s really exciting to see new participants, such as convenience chains, drug stores and grocery stores, from across the United States paying attention to the FDA, the FDA’s goals and ultimately products like ours that align with the FDA’s goals as well as their corporate ethos. We are committed, as ever, that when the United States and other countries bring in limits for nicotine content in cigarettes, we will license our tobacco genetics to the industry to enable their compliance with such requirements.
After announcing its intention to reduce nicotine levels to minimally addictive levels in 2017 and again referring to the concept when it first announced plans to ban menthol in the spring of 2021, the FDA appears to have gone quiet on the plan again. Do you expect the FDA to enact a nicotine standard in the near future, and how important is such a standard to the success of VLN cigarettes?
While I cannot speak directly or indirectly for the FDA, I believe the FDA is taking the appropriate steps by focusing its efforts on the ban of high-nicotine menthol cigarettes. While some parts of industry will doubtless challenge this, they should recall that their own actions have led to the need for such regulation to be considered in the first place.
I believe the elimination from menthol in highly addictive cigarettes is an important step to reducing the attractiveness of highly addictive tobacco or nicotine to youth, a view which should be shared by industry participants as a key concern as it is for the FDA.
I am confident that we will see a nicotine standard in the coming years as appropriately regulated alternative products become increasingly available as well as a shift in public health messaging relating to such products. At this juncture, we see that our genetics and intellectual property are uniquely able to support such forward-thinking and pioneering harm reduction effort, which will save millions of lives, and we are excited to play our part in this vast public health opportunity.
In a press note dated April 29, 22nd Century Group said it expected its VLN Menthol King reduced-nicotine cigarette to be exempted from the FDA’s proposed ban on menthol cigarettes. Please explain why you expect this to happen.
We expect that the FDA will allow for a reduced-nicotine menthol cigarette to stay on the market in order to provide an offramp for adult smokers who currently use menthol cigarettes. In authorizing our MRTP applications, FDA was clear that such products have a role to play in both menthol and nonmenthol product styles to reduce their consumption of nicotine-containing products. With so many individuals smoking menthol cigarettes, we think it is prudent for the FDA to allow those smokers more options and not less to help reduce their exposure to nicotine and products containing nicotine.
Where do you see 22nd Century Group five years from now? What are the challenges that need to be overcome to achieve that vision?
Most people know the company for its leadership in reduced-nicotine tobacco technology; however, this is only one part of our business. Recently, we acquired GVB Biopharma, a contract development and manufacturing organization. GVB is one of the largest providers of hemp-derived active ingredients for the pharmaceutical and consumer goods industries worldwide based on total tonnage. GVB’s strengths complement 22nd Century’s existing upstream and downstream value chains, which includes expertise in cannabinoid receptor science with CannaMetrix, plant research and proprietary genetics through its KeyGene partnership, breeding expertise with Extractas and cultivation capabilities at Needle Rock Farms. The combination with 22nd Century establishes a global one-of-a-kind company to serve the rapidly growing hemp/cannabis ingredient market.
Taco Tuinstra is Tobacco Reporter’s editorial director.Based in Raleigh, North Carolina, USA, he coordinates the work of staff writers and contributors.On his watch, Tobacco Reporter has won several awards for editorial excellence.Since joining the magazine in 1997, Taco has visited more than 75 countries to meet industry representatives in their markets and to report tobacco news firsthand.

June 1, 2022
John Miller Joins 22nd Century Group

John Milller
John J. Miller has joined 22nd Century Group to help the company achieve the full potential of its reduced-nicotine business.
Miller has more than 35 years of experience in the tobacco and consumer packaged goods industries. He will work directly with Jim Mish, CEO, and with Michael Zercher, chief operating officer of 22nd Century Group.
“We are absolutely delighted to welcome John Miller to our team,” said Mish. “His significant hands-on expertise and insight in strategic planning, assessing and implementing strategic partnership opportunities, and leading sales and marketing efforts will be instrumental in accelerating revenue, profit and market share growth for the company. We look forward to John’s contributions to the success of the company’s launch of VLN, our reduced nicotine cigarettes with 95 percent less nicotine than conventional cigarettes, which is the first and only modified-risk tobacco product approved by the FDA.”
“I am extremely impressed with the team of outstanding professionals at 22nd Century Group and their commitment to product innovation,” said Miller in a statement. “I am very enthusiastic to be joining the company at this pivotal time in its history and leading the VLN initiative on the heels of the product’s successful pilot launch. VLN is a transformative brand with tremendous market potential. I am incredibly optimistic about the meaningful difference it could make in the lives of people to help them smoke less.”
Most recently, Miller was the president and CEO of Swisher International, a 160-year-old leading lifestyle brands company that is the largest manufacturer and exporter of cigars and smokeless tobacco products in America. Miller joined Swisher in November 2012 as senior vice president of sales and marketing, was promoted to president in 2017 and was named CEO in March 2021.
Miller’s experience also includes more than 20 years in various management positions at U.S. Smokeless Tobacco Co. As regional vice president, he had direct oversight and responsibility for all sales, planning and operations for key brands in the Western United States. U.S. Smokeless Tobacco Co. was acquired by Altria in 2009.
Miller holds a Bachelor of Science degree in finance from the University of Nevada, Las Vegas and a Master of Business Administration degree from the George L. Graziadio School of Business Management at Pepperdine University.
May 24, 2022
22nd Century Begins Integration of GVB

Photo: chokniti | Adobe Stock
22nd Century Group has begun integration of GVB Biopharma, which it acquired on May 13, 2022, according to a company press release. As a contract development and manufacturing organization (CDMO), GVB is a market share leader in hemp-derived active ingredients for the nutraceuticals, pharmaceutical and consumer goods industries. 22nd Century has posted a presentation, which includes an overview of GVB’s business operations, the strategic benefits of the acquisition, and strengths of the combined companies, on the “Investors” section of its website.
“We are excited to welcome the GVB team into the 22nd Century family,” said James A. Mish, 22nd Century’s CEO. “Together, we believe 22nd Century now provides the most complete hemp/cannabis solution in the world, from receptor science and transformative plant genetics to finished ingredients and CDMO formulated products that meet the most exacting standards required by global consumer products and pharmaceutical companies. We can now offer complete, vertically integrated cannabinoid manufacturing technologies, creating industry-leading scale and cost efficiency alongside our proprietary hemp/cannabis plants designed to bring the commercially desirable traits and stable genetics critical to realizing the full potential of this exciting market.”
May 19, 2022
22nd Century Acquires GVB Biopharma

Photo: cendeced
22nd Century Group has acquired GVB Biopharma. As a contract development and manufacturing organization, GVB is believed to be one of the largest providers of hemp-derived active ingredients for the pharmaceutical and consumer goods industries worldwide based on total tonnage.
GVB’s strengths complement 22nd Century’s existing upstream and downstream value chains, which includes expertise in cannabinoid receptor science with CannaMetrix, plant research and proprietary genetics through its KeyGene partnership, breeding expertise with Extractas, and cultivation capabilities at Needle Rock Farms.
GVB expects 2022 revenue of approximately $48 million, a 58 percent increase year-over-year, gross margin in excess of 44 percent and positive cash flow. Upon closing, the transaction is expected to more than double 22nd Century’s revenue, be immediately accretive to adjusted EBITDA, and generate positive cash flow from the acquired assets in the near term.
“GVB represents a transformational acquisition for 22nd Century that will enable us to rapidly grow our hemp/cannabis franchise,” said James A. Mish, chief executive officer of 22nd Century Group, in a statement.
“GVB is one of the largest CBD suppliers globally, possessing innovative, vertically integrated cannabinoid product manufacturing technologies driving industry leading scale and cost efficiency. In addition to immediately expanding our hemp/cannabis franchise capabilities, GVB represents an opportunity to double our revenue and internalize a comprehensive contract manufacturing and extraction platform which can be used to directly and exclusively monetize our differentiated and proprietary hemp/cannabis plant genetics and intellectual property. We are enthusiastic to begin working with the highly regarded and very experienced management team at GVB.”
“We are excited to combine with 22nd Century group, pairing our production and manufacturing capabilities together with the best hemp/cannabis plant science in the world,” said Phillip Swindells, chief executive officer at GVB. “Since 2017, we have built a loyal customer base and continue to add new, rapidly growing customers as demand in our industry accelerates. We sold more than five billion doses of CBD in 2021, and we look forward to further scaling our business as a part of 22nd Century’s comprehensive platform.”
GVB operates three U.S. manufacturing facilities in Oregon and Nevada, including a 30,000-square-feet hemp ingredient manufacturing facility in Central Oregon, a 40,000 square-feet white-label, finished product manufacturing facility in Las Vegas, and an industrial-scale hemp extraction facility in Prineville, Oregon.
May 16, 2022