22nd Century Group (Nasdaq: XXII) to Expand VLN® Sales in Three Additional States: Arizona, Utah and New Mexico

Rhea-AI Summary

22nd Century Group, Inc. (XXII) announces the expansion of its VLN® reduced nicotine cigarettes into Utah, Arizona, and New Mexico, following the Colorado launch. The company aims to tap into a massive market, emphasizing that every 1% of the U.S. market correlates to approximately $800 million in retail sales. With favorable MRTP excise tax programs in these states, 22nd Century plans to utilize established partners for efficient distribution. VLN® products are designed to help adult smokers reduce their nicotine intake, with previous pilot programs demonstrating success in consumer recommendations.

Positive

• Expansion into Utah, Arizona, and New Mexico enhances market reach.
• Favorable MRTP excise tax programs support business growth.
• A successful pilot sales program showed high consumer recommendation rates.

Negative

• None.

• Combined with Ongoing Launch in Colorado, VLN^® Will Be Available in All “Four Corners” States
• Utah and New Mexico Join Colorado as VLN^® States with Favorable MRTP Excise Tax Programs

BUFFALO, N.Y., Oct. 26, 2022 (GLOBE NEWSWIRE) -- 22nd Century Group, Inc. (Nasdaq: XXII), a leading agricultural biotechnology company dedicated to improving health with reduced nicotine tobacco, hemp/cannabis, and hops advanced plant technologies, today announced that the Company has further expanded on the previously announced launch of its VLN^® reduced nicotine content cigarette products in Colorado with the addition of Arizona, Utah and New Mexico, collectively known as the “Four Corners” states.

22nd Century will leverage both existing partners and new distribution networks in the additional states to make its VLN^® products available to adult smokers in these markets.

“We made clear that our statewide launch in Colorado and continued expansion in Illinois were just the first steps of our accelerated VLN^® rollout. With the addition of three more states, we are moving ahead with our plans to rapidly make our innovative products available to a much larger portion of the adult smoker population in the United States,” said John J. Miller, president of 22nd Century’s Tobacco Business. “This is a massive market in need of new solutions to help adult smokers smoke less. Every 1% share of the U.S. market equates to approximately $800 million in sales at the register, which is about $500 million in revenue to a premium cigarette manufacturer.”

“These four states will demonstrate our scalable and repeatable state launch blueprint for VLN^®, which we are now leveraging to rapidly put our product in front of an ever-growing population of adult smokers looking for a way to smoke less. Additionally, we have the benefit of favorable MRTP excise tax structures for tobacco products sold in Utah and New Mexico, similar to the beneficial programs in Colorado, that can assist us in getting the word out to adults who can benefit from our products,” said Miller. “Expanding into the Four Corners gives VLN access to not only those states, but also adjacent geographies with concentrated centers of adult smokers, allowing us to market VLN in a streamlined and efficient manner.”

22nd Century Group’s proprietary VLN^® cigarettes smoke, smell, and taste like a cigarette but contain approximately 95% less nicotine than conventional cigarettes, a level shown to be non-addictive. As noted on the packaging, VLN^® is the only cigarette in the world purposefully designed to “Help You Smoke Less.”

22nd Century Group’s Chicago pilot sales program demonstrated that in-store outreach was highly effective, and once adult smokers had tried VLN^®, the vast majority were quick to recommend VLN^® to other adult smokers. The Company is building out a network of partners and distribution resources to not only stock or distribute VLN^®, but also support additional functions such as merchandising and product advice to expand the awareness of VLN^®’s highly differentiated value proposition in key retail channels.

“VLN^® is more than just a tool to help smokers smoke less,” said Miller. “With the increasing interest from state and local governments to ban flavoring agents and even menthol, adult smokers need products to help them transition away from highly addictive traditional cigarettes. With our FDA MRTP authorizations, VLN^® King and VLN^® Menthol King provide a clinically researched tool to help smokers reduce their smoking and a regulatory pathway for government policy makers to provide an exemption to assist menthol smokers in transitioning away from addictive traditional menthol cigarettes and advance important public health goals.”

About 22nd Century Group, Inc.
22nd Century Group, Inc. (Nasdaq: XXII) is a leading agricultural biotechnology company focused on tobacco harm reduction, reduced nicotine tobacco and improving health and wellness through plant science. With dozens of patents allowing it to control nicotine biosynthesis in the tobacco plant, the Company has developed proprietary reduced nicotine content (RNC) tobacco plants and cigarettes, which have become the cornerstone of the FDA’s Comprehensive Plan to address the widespread death and disease caused by smoking. The Company received the first and only FDA MRTP authorization of a combustible cigarette in December 2021. In tobacco, hemp/cannabis, and hop plants, 22nd Century uses modern plant breeding technologies, including genetic engineering, gene-editing, and molecular breeding to deliver solutions for the life science and consumer products industries by creating new, proprietary plants with optimized alkaloid and flavonoid profiles as well as improved yields and valuable agronomic traits.

Learn more at xxiicentury.com, on Twitter, on LinkedIn, and on YouTube.

Learn more about VLN^® at tryvln.com.

Cautionary Note Regarding Forward-Looking Statements
Except for historical information, all of the statements, expectations, and assumptions contained in this press release are forward-looking statements. Forward-looking statements typically contain terms such as “anticipate,” “believe,” “consider,” “continue,” “could,” “estimate,” “expect,” “explore,” “foresee,” “goal,” “guidance,” “intend,” “likely,” “may,” “plan,” “potential,” “predict,” “preliminary,” “probable,” “project,” “promising,” “seek,” “should,” “will,” “would,” and similar expressions. Actual results might differ materially from those explicit or implicit in forward-looking statements. Important factors that could cause actual results to differ materially are set forth in “Risk Factors” in the Company’s Annual Report on Form 10-K filed on March 1, 2022, and in the Company’s Quarterly Report filed on August 9, 2022. All information provided in this release is as of the date hereof, and the Company assumes no obligation to and does not intend to update these forward-looking statements, except as required by law.

Investor Relations & Media Contact
Mei Kuo
22nd Century Group, Inc.
Director, Communications & Investor Relations
mkuo@xxiicentury.com

Darrow Associates Investor Relations
Matt Kreps
T: 214-597-8200
mkreps@darrowir.com

FAQ

What new states has 22nd Century Group expanded VLN® into?

22nd Century Group has expanded VLN® into Utah, Arizona, and New Mexico.

How does the MRTP excise tax impact 22nd Century Group's products?

The MRTP excise tax programs in Utah and New Mexico are favorable and support the distribution and marketing of 22nd Century's VLN® products.

What is the market opportunity for 22nd Century Group's VLN® products?

Every 1% share of the U.S. market for VLN® translates to approximately $800 million in sales at retail.

What is the nicotine content in VLN® cigarettes?

VLN® cigarettes contain approximately 95% less nicotine than conventional cigarettes.

What were the results of the pilot sales program for VLN®?

The pilot sales program demonstrated that in-store outreach was effective, with a majority of adult smokers recommending VLN® after trying it.