22nd Century Group, Inc. (XXII) stock prices were up 5.59% shortly after the trading day commenced on April 30th 2021, bringing the price per share up to USD$5.01.
Big Tobacco’s Hold on the Market
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Often overshadowed by the up-and-coming cannabis legalization across the United States, the tobacco industry has becoming the center of the spotlight recently. The Commissioner of the FSA had launched an initiative to reduce nicotine products in 2017, but this project was dropped as a priority in 2019. This is despite that even amongst smokers, an overwhelming 80% voted in favor of regulations that would reduce the levels of nicotine in cigarettes.
Resistance to Big Tobacco
XXII has stood behind Congresswoman Gwen Moore’s calls advocating for increased tobacco regulation, and are hopeful that the Biden administration will take heed of a proposal to reduce nicotine levels in cigarettes by the U.S. Food and Drug Administration (FDA). The move will see all cigarettes have their nicotine levels reduced to minimally or non-addictive levels. While being devastating for cigarette companies, this could shoot XXII to the moon.
XXII’s Nicotine Reduction
The centerfold of XXII’s product portfolio holds the company’s primary generator of revenue for 2021 so far, very low nicotine (VLN) cigarettes. The company has already been expanding its existing program and offers its product for premium pricing. With a history of VLN tobacco and cigarette products, the plant biotech company has a market cap of USD$563.82 million and has recently forayed into the cannabis sector.
XXII Seeking FDA Approval
XXII recently processed an order for 3.6 million variable nicotine cigarettes for independent scientific studies that were partially funded by the FDA. Currently, the company has an application submitted to the FDA that it is highly confident the FDA is in the final stages of reviewing. Should the Modified Risk Tobacco (MRTP) authorization for VLN cigarettes play out in XXII’s favor, a successful review the Biden administration of nicotine regulations could shoot XXII to the moon.
XXII’s Foray into the Cannabis Sector
In conjunction with the company’s diversifying foray into the cannabis sector, XXII is primed to capitalize on two major niches of the recreational smoking market. XXII has collaborated with various companies to facilitate its diversification, including a partnership with KeyGene. The joint project seeks to develop a platform that will allow users to help identify and synthesize commercially valuable traits of cannabis plants to create innovative new strains.
Future Outlook for XXII
Current and prospective shareholders will be keeping a keen eye on the outcome of the FDA proposal review by the Biden administration and the status of XXIIs MRTP authorization for VLN cigarettes by the FDA. Should things go the way XXII hopes and anticipates, investors are excited for the prospect of monumental long-term increases in shareholder value.