22nd Century Group Inc (NYSEMKT:XXII) Breaks Out And Still Going

When we last reviewed 22nd Century Group Inc (NYSEMKT:XXII) on May 7, 2017, the stock was hovering at or near the upper resistance level of a range, at about $1.51. The stock had been in this range since April of 2015. This resistance level was being tested for the sixth time. Based on technical analysis, we reported this as a good buy signal. As it turned out, the technical setup had a favorable outcome. On May 19^th, the stock began trading up and broke through the resistance level decisively, with very strong volume on June 6, 2017, and continued upward to an intraday high of $2.00. The stock is currently trading at $1.82.

Although the price chart and technical analysis paints the picture, the picture is a reflection of the positive business activities that the Company is engaged in. Before we get into the details, a little background on the Company for those who are not familiar with it. 22nd Century Group, Inc is a plant biotechnology company focused on technology which allows it to increase or decrease the level of nicotine in tobacco plants, and the level of cannabinoids in cannabis plants through genetic engineering and plant breeding. The Company’s primary mission in tobacco is to reduce the harm caused by smoking. The Company’s primary mission in cannabis is to develop proprietary cannabis strains for important new medicines and agricultural crops.22nd Century Group has had several noteworthy press releases since our last review. All of which may have collectively contributed to the optimism that peaked investors’ interest. On May 9, 2017, 22nd Century Group announced that the Company’s wholly-owned subsidiary, NASCO Products, recently entered into substantial new manufacturing agreements for the production of filtered cigars and other tobacco products. The products to be manufactured by 22nd Century as a result of these executed new contracts are currently supplied to more than 250 distributors and wholesalers, and more than 40,000 retail stores across the United States.This sizeable increase in business has required the Company to more than double its workforce, hiring 37 new employees so far at the Company’s NASCO factory in Mocksville, North Carolina. When combined with existing business, 22nd Century is raising its 2017 total revenue projection from a previously announced $12,000,000 to more than $16,000,000. In 2018, 22nd Century anticipates total revenues will significantly exceed $20,000,000 and the Company’s factory will be cash flow positive. President and Chief Executive Officer at 22nd Century Henry Sicignano, III, explained:

“Our manufacturing facility is a vital strategic asset for 22nd Century Group, The factory enables 22nd Century to develop and manufacture the Company’s SPECTRUM® government research cigarettes, our X-22 smoking cessation cigarettes in development, and 22nd Century’s proprietary MRTP candidates: BRAND A Very Low Nicotine cigarettes, and BRAND B low tar-to-nicotine ratio cigarettes. Now, considering the newly signed contract manufacturing agreements, our NASCO production facility will also contribute positively to 22nd Century’s bottom line.”

On June 1, 2017, 22nd Century Group, Inc announced that its wholly-owned subsidiary, Goodrich Tobacco Company, received a new purchase order for agencies of the U.S. federal government for 2.4 million of the Company’s proprietary SPECTRUM research cigarettes. The number of clinical trials by researchers investigating the important applications of Very Low Nicotine cigarettes has dramatically increased. The Company’s SPECTRUM brand cigarettes are an important tool in clinical research. As a result, new and on-going independent clinical trials have increased the demand for 22nd Century’s proprietary SPECTRUM research cigarettes. Henry Sicignano, III, President and Chief Executive Officer of 22nd Century Group commented:

“Today there are at least 25 ongoing clinical trials using 22nd Century’s proprietary Very Low Nicotine cigarettes. We expect that this new order of SPECTRUM research cigarettes will facilitate critical additional research… and will ultimately lead to 22nd Century making Very Low Nicotine cigarettes available to smokers around the world.”

On June 6, 2017, 22nd Century Group announced today that the Company’s research collaboration with North Carolina State University has yielded several new Very Low Nicotine (VLN) tobacco varieties that contain no foreign DNA and no trace of genetic modification. The new Very Low Nicotine varieties are ideally suited for use in the Company’s X-22 smoking cessation product in development and will also form the basis of other unique 22nd Century VLN products. Federal regulations will no longer treat the new Very Low Nicotine tobacco varieties as “genetically modified, ” and these new proprietary tobacco strains will not be subject to burdensome regulation and import restrictions in most countries around the world.22nd Century Group announced on June 8, 2017 that it has signed a collaborative research agreement with The Dent Neurosciences Research Center. The agreement features a clinical trial that will use functional magnetic resonance imaging (fMRI) to image the brains of smokers. Participants will smoke 22nd Century’s proprietary Very Low Nicotine (VLN) cigarettes, or conventional cigarettes, which will allow scientists to study both the immediate and longer-term effects of nicotine on brain activity.The financials for 22nd Century Group, Inc. continue to show consistent revenues, and a strong balance sheet. Current market capitalization stands at $171.79 million, on 90.9 million shares outstanding as of June 09, 2017. XXII will likely pullback as short-term traders take profits. However, if the Company’s good news continues, a pullback in XXII may be yet another buying opportunity. We will be updating our subscribers as soon as we know more. For the latest updates on XXII, sign up below!Disclosure: We have NO position in XXII and have NOT been compensated for this article.