Stop Smoking Cigarettes with Weed and Beer

let’s dive into this company that wants you to quit smoking cigarettes but maybe not sell your bong quite yet... [Image] Most of us know smoking kills or, at the very least, destroys your health. We also know cigarettes are addictive. The market for products to help you kick the habit is more than $20 billion in the U.S. alone. 22nd Century Group (NASDAQ: XXII) wants a piece of that pie and a brownie to boot. They state their goal is to "reduce the harm caused by smoking and to improve health and wellness through plant biotechnology.” And some of their products, like low-nicotine cigarettes, do just that. However, they also play mad science with cannabis and hops, using biotechnology to enhance the most desirable plant traits. A bit odd if you ask me. However, as a trader, what I care about is potential. And since its IPO in 2014, this stock has run +400% on three separate occasions. In fact, its latest overnight 50% boost came thanks to FDA approval for one of its products. So, let’s dive into this company that wants you to quit smoking cigarettes but maybe not sell your bong quite yet. 22nd Century Group (NASDAQ: XXII) 1-month trading range: $0.40 - $0.71 Typical average daily volume: ~2.7 million Float: ~210 million 22nd Century Group’s Business Let’s split this company up into two segments: quit smoking products and genetically engineered plants. In this segment, you’ll find: - VLN - A 95% reduced nicotine content cigarette authorized by the FDA as a modified risk tobacco product. - SPECTRUM - A research cigarette with varying levels of nicotine, used to study the effects of nicotine on smoking behavior and health outcomes - X-22 - A prescription-based smoking cessation aid in development, intended to help smokers quit by satisfying their cravings without reinforcing their addiction. - Moonlight and Moonlight Menthol - Tobacco cigarettes with very low levels of tar and other harmful chemicals, designed to appeal to smokers who want a smoother and cleaner smoking experience - Magic - Atobacco cigarette with very low levels of nicotine and tar, comparable to nicotine replacement products, marketed in Europe as a reduced exposure product While the inidviudal product sales aren’t broken down, the company’s latest quarterly report shows that tobacco products account 2/3rds of its revenues: [BNeIkHtvQC_g-lALp1KQED0gT5CQWH_ZDFcnYVPEKi9Wg1FQnISO0cu1Ca0pz9LGE03iPRjX2zF1osDNZPXx1RSYJzJnHJK34HDXeL9_aM-DUXAJ-427ZSEj8duzbW8Y3Nr80NZ1Md6pYr5uSIwVvw] [Source: XXII Q1 2023 Report]( The other division bioengineers hemp and cannabis plants and produces cannabis plant derivatives such as cannabinoids. This engineering approach allows them to create plant strains with high CBD or CBG content, and specific flavors. 22nd Century established partnerships and collaborations with organizations, such as KeyGene N.V., North Carolina State University, Panacea Life Sciences Inc., Aurora Cannabis Inc., CannaMetrix LLC, and others. In May of last year, 22nd Century acquired GVB Biopharma, a manufacturer of hemp-derived cannabinoid active ingredients for $60 million. Lastly, the company researches hops products, such as hops plant lines, alpha acids, beta acids, and other compounds. This area is a bit less developed, with hardly [any information on the company’s website.]( Financials [KUJJ-Vp69rr9sggrfwU2Kc61-4PrueGPPaopjBrlr4mjsuY1AyWX1KxWiMzC4jxuGRK_v8aHN3j8b1wlAUfvDQ3CIsSD2TILj1YSFtpDVC_T2P99kcvboCy45cIJLS25gwk3z5xl9jXiyjOIQBoLtA] [Source: Stock Analysis]( 22nd Century makes a surprising amount of sales. Their growth in 2022 came largely through commercializing their hemp and cannabis products. Management even forecast 2023 sales to hit $105-$110 million. At the moment, the company doesn’t generate positive cash from operations. HOWEVER, current guidance puts them on track to get there by 2024, which is a HUGE milestone for any growing company. Much of this rests on expanding distribution and optimizing operations. For example, their VLN path to cash positive relies on adding 4,000 stores in California, Texas, and Florida from their current expansion of 1,700 in 22 states. On the hemp side, the focus is on operating performance, food & nutraceuticals market expansion, and gaining more FDA approvals. Promoter Activity I only received one promoter highlighting the stock and that came through a text alert with no other information. All I got was a symbol and disclaimer that noted the company received $250,000 for a three day marketing campaign, which is a huge spend for a short period. So, I did a little digging on my own for recent catalysts: - June 21, 2023: VLN launched in Nevada to help smokers smoke less. - June 20, 2023: XXII entered into definitive agreements with certain investors for the purchase and sale of 11.2 million shares of common stock and warrants at a price of $0.47 per share in a registered direct offering priced above market. The company said that it expects to receive gross proceeds of approximately $5.3 million from the offering. - June 6, 2023: VLN launched at the #1 U.S. convenience store chain in Texas, California and Florida. - April 22, 2023: The company secured an exclusive agreement with CannaMetrix LLC for the use of their proprietary human cell-based testing CannaMetrix EC50Array™ technology that will enable accelerated commercialization of new disruptive hemp/cannabis plant lines and intellectual property. This also comes on top of the earnings results from May 6.where the reported sales revenue of $7.6 million for the quarter and a net loss of $4.4 million for the quarter, an improvement of 25.4% year-over-year. Straight to the Facts Management has a clear plan to get to profitability. But, with $16.2 million in cash onhand, and a burn of almost $50 million annually, I wasn’t surprised to see them do an offering last week. This sent shares lower on extremely heavy volume. It may take a few days to settle out, but once it does, I expect the price action to be more catalyst driven. Baron Von Stocks Red Oak Media Group, 7940 Ann Arbor St Dexter MI USA 48130 To update contact information or unsubscribe from this list, please [click here](