22nd Century Group: Very Low Nicotine Brands Propel Developments

Moonlight and Moonlight Menthol get thumbs up from FDA.

From company reports

A small company with big potential in the era of tobacco harm reduction generated a lot of news in late December and January.

By far the most portentous development was the U.S. Food and Drug Administration (FDA)’s determination that the marketing of 22nd Century Group’s Moonlight and Moonlight Menthol brand cigarettes are “appropriate” for the protection of the public health.

Consequently, the FDA has issued marketing orders permitting the sale of these products in the U.S. This FDA authorization follows the FDA’s review of the Premarket Tobacco Product Applications (PMTA) previously submitted by 22nd Century.

The products contain roughly 95 percent less nicotine than standard cigarettes, according to the FDA.

“FDA authorization of 22nd Century’s Moonlight and Moonlight Menthol brands is “a major milestone in our efforts to drive meaningful change in the tobacco industry,” said Michael Zercher, president and chief operating officer of 22nd Century Group. “22nd Century joins just two other companies in having marketing orders granted under the FDA’s PMTA regulatory pathway.

“Those other companies—Philip Morris International and Swedish Match—are very large, global tobacco companies with significant financial, scientific and regulatory affairs resources. So we are extremely proud of the world-class work done by our regulatory team to successfully secure this marketing authorization from the FDA.”

Michael Zercher, President, 22nd Century Group.

The company looks forward to continuing to work with the FDA regarding its separate Modified Risk Tobacco Product application and to supporting the FDA’s continued work in implementing a reduced nicotine product standard to require all cigarettes sold in the U.S. to be made minimally addictive or non-addictive, said James W. Cornell, former chairman of the board of directors of 22nd Century Group.

“We remain focused on our core missions of reducing the harm caused by smoking and building a world-class hemp/cannabis company.”

Management Changes, Some Unexpected

In mid December, management changes to assist in these efforts were announced.

“Over the past few months we have made rapid and significant progress in strengthening 22nd Century Group as we execute against our two growth strategies,” commented James W. Cornell, director & and until recently chairman of the board. “We are committed to creating meaningful change in the tobacco industry by reducing the harm caused by smoking through the commercialization of our proprietary VLNC tobacco and its related intellectual property, and we are growing a profitable, legal hemp/cannabis business in this fast-growing, emerging space.”

But first the Company will have to begin a search for a new chief executive officer…for the second time in five months! Cliff Fleet resigned from, that post at the end of the year to become the CEO. of the Colonial Williamsburg (Va.)

Fleet has a well documented interest in historical work. He has in recent years served as president of the Jamestown-Yorktown Foundation, Inc., and is a member of the Board of Trustees for the foundation for William & Mary College, which is also in Williamsburg. He will continue to remain on the Company’s Board.

His predecessor Henry Sicignano III had resigned quite unexpectedly as chief executive last July 26 citing “personal reasons.” He had been the chief executive since March 2015 and president since January 2011.

In the meantime, Michael Zercher has been appointed to serve as the Company’s President.

In other developments:

• FDA’s Tobacco Products Scientific Advisory Committee (TPSAC) was scheduled to conduct a public hearing on February 14 regarding the company’s Modified Risk Tobacco Product (MRTP) application for its VLNC products.

• Roger O’Brien was appointed as a new member of the group’s board of directors,

• Nora Sullivan was appointed as the new chairman of the board replacing Cornell. “We welcome Roger to 22nd Century’s Board of Directors and congratulate Nora on her appointment as chairman,” said Zercher. “Roger’s extensive experience in strategy and management consulting and Nora’s deep experience in capital markets, private equity, and matters of public company governance, including as a long-time member of 22nd Century’s board, will be of tremendous value to the company as we pursue our two strategic growth objectives in tobacco harm reduction and the emerging hemp/cannabis space.

A worker on the floor at NASCO Tobacco Products helps make cigarettes for 22nd Century.

The factory of NASCO Tobacco Products, a subsidiary of 22nd Century Group, in Mocksville, N.C., near Winston-Salem. NASCO operates as a contract manufacturer of traditional cigarettes and filtered cigars, which has produced much of 22nd Century’s annual revenue to date.

Barry Saintsing, Master Tobacconist.