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22nd Century Group (XXII) Boosts VLN Offerings in Montana

22nd Century Group, Inc. XXII announced that it expanded the distribution of its low-nicotine content cigarettes — VLN — across Montana. This move is in sync with the company’s objective of lowering smoking-related damages by offering reduced-nicotine tobacco cigarettes.

In the past two trading days, 22nd Century Group’s shares have gained 3.1%, eventually closing the trading session at $2.32 on Friday.

Inside the Headlines

The company’s VLN cigarettes are touted as the world’s only combustible cigarettes that have received the U.S. Food and Drug Administration’s Modified Risk Tobacco Product authorization. The VLN cigarettes, which have 95% less nicotine than its conventional counterparts, significantly reduce the consumption of nicotine and its harmful effects on the body.

As part of its multi-state VLN rollout strategy, 22nd Century expanded the VLN offerings in Montana by adding Town Pump convenience stores to its product distribution channel. Per the company, its VLN products will be available in more than 80 Town Pump convenience stores throughout the state. This will provide an effective solution for adult smokers willing to break the chains of nicotine addiction.

The company is leaving no stone unturned to expand its VLN offerings across major markets and new states. Recently, 22nd Century also entered into a distribution deal with Hub, Inc., a Midwest-based convenience store. This deal will also allow the company to expand retail points of sale for its VLN cigarettes in the Midwest region. It is worth noting that XXII aims to expand its VLN offerings across 18 states by the end of this year, accounting for 60% of the tobacco sales market in the United States.

Zacks Rank, Price Performance and Estimate Trend

The Zacks Rank #3 (Hold) company has been benefiting from robust demand for cannabinoid ingredients, a multi-state VLN rollout strategy and the acquisition of GVB. For 2023, it expects to generate revenues of $105-$100 million, indicating year-over-year growth of 69%-77%. However, rising costs and expenses might impact its margins and profitability.

In the past month, the company’s shares have lost 67% against the industry’s growth of 6.6%.



Zacks Investment Research
Zacks Investment Research

Image Source: Zacks Investment Research


The Zacks Consensus Estimate for 22nd Century Group’s 2023 bottom line has been stable over the past 30 days.

Key Picks

Some better-ranked stocks are Japan Tobacco Inc. JAPAY, British American Tobacco p.l.c. BTI and Celsius Holdings, Inc. CELH. JAPAY sports a Zacks Rank #1 (Strong Buy), and BTI and CELH carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Japan Tobacco is a manufacturer and distributor of tobacco products. The Zacks Consensus Estimate for JAPAY’s current financial-year sales and earnings per share suggests a decline of 4.1% and 4.2%, respectively, from the corresponding year-ago reported figures. The company has a trailing four-quarter earnings surprise of 19.1%, on average.

British American Tobacco specializes in the provision of tobacco and nicotine products to consumers. The Zacks Consensus Estimate for British American Tobacco’s current financial year sales suggests a decline of 1%, while earnings are likely to grow 4.4% from the prior-year reported numbers.

Celsius Holdings is a leading provider of functional drinks and liquid supplements in the United States. The Zacks Consensus Estimate for CELH’s current financial-year sales suggests 69.6% growth, while earnings per share are expected to increase by 154.4% from the corresponding year-ago reported figures.

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