22nd Century Group Inc (NYSEMKT: XXII) is having an incredibly strong start to the trading session this morning as excited investors swarm the stock. Ultimately, the gains have to do with a potential mandate coming to reduce nicotine levels in cigarettes to make then non-addictive. This led to the excitement that pushed the stock upward, prompting our friends at Trade Ideas to alert us to the gains. At the moment (9:53), XXII is trading at $1.90 per share after a gain of $0.16 per share or 9.20% thus far today.
XXII Gains On Nicotine Level Mandate
As mentioned above, 22nd Century Group is having an incredibly strong start in the trading session today after news announced by the United States Food and Drug Administration suggests that a nicotine mandate will be placed on the cigarette industry. The FDA, acting under the Family Smoking Prevention and Tobacco Control Act is expected to mandate lower nicotine levels in cigarettes, bringing them to non-addictive levels. This is great news for XXII because the plant biotechnology company is focused on tobacco harm reduction. So, a mandate like this will likely lead to positive moves for the stock.
Importantly enough, XXII is already able to achieve the new and overwhelmingly ambitious product standard. In fact, they are currently the only company in the world that has demonstrated a capability of growing tobacco with non-addictive levels of nicotine. This tobacco, known as Very Low Nicotine tobacco is grown on independently-owned farms in the United States and without artificial extraction or a chemical process. Perhaps most importantly, the Very Low Nicotine is patent protected intellectual property of 22nd Century Group. So, there’s a big opportunity here for strong sales if the mandate does indeed take place. In the FDA announcement, that took place on Friday, FDA Commissioner Scott Goftlieb, M.D., had the following to offer…
“The overwhelmingly amount of death and disease attributable to tobacco is caused by addiction to cigarettes – the only legal consumer product that, when used as intended, will kill half of all long-term users. Unless we change course, 5.6 million young people alive today will die prematurely later in life from tobacco use. Envisioning a world where cigarettes would no longer create or sustain addiction, and where adults who still need or want nicotine could get it from alternative and less harmful sources, needs to be in the cornerstone of our efforts – and we believe it’s vital that we pursue this common ground.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will be keeping a close eye on XXII. In particular, we’re interested in following the news surrounding the FDAs attempts to reduce nicotine levels in cigarettes as this will create incredibly positive implications for the company. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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