22nd Century Group Secures New Customer for Moonlight Cigarettes, Envisions 30% Production Increase in Southeast Asia

22nd Century Group, Inc. has secured a new agreement with a Southeast Asia customer for its Moonlight branded cigarettes, expecting the first shipment in Q4 2024. This collaboration could potentially increase factory volumes by over 30% and improve gross profit margins. The company has a range of brands, including VLN® 95% reduced nicotine content products, and is discussing similar opportunities with other customers globally.

In a significant development for the tobacco harm reduction industry, 22nd Century Group, Inc. (NASDAQ: XXII) has recently secured a large new contract manufacturing agreement (CMA) in Southeast Asia for its Moonlight branded cigarettes [1]. This collaboration is expected to commence in the second quarter of 2024 and result in a substantial increase in factory volumes, potentially surpassing 30% [1].

As a tobacco products company focused on nicotine harm reduction, 22nd Century Group's expertise lies in its innovative, reduced nicotine content (RNC) tobacco plants and cigarettes [2]. The company's commitment to health and wellness through plant science has led to the development of proprietary RNC tobacco varieties and cigarettes, the cornerstone of the U.S. Food and Drug Administration's (FDA) Comprehensive Plan to address smoking-related mortality and morbidity [2].

The new CMA with the Southeast Asian customer is not only a testament to 22nd Century Group's growing reputation in the tobacco harm reduction market but also a potential catalyst for improving gross profit margins [1]. As outlined in the company's most recent results call, the operating targets include scaling revenue, enhancing gross margins, and achieving breakeven operations by the first quarter of 2025 [1].

Beyond this new agreement, 22nd Century Group is actively engaged in discussions with other potential customers globally to expand its reach and grow its VLN® brand, which offers 95% reduced nicotine content products [1]. The company's use of modern plant breeding technologies, including genetic engineering, gene-editing, and molecular breeding, enables it to deliver solutions for the life science and consumer products industries by creating new, proprietary plants with optimized alkaloid and flavonoid profiles [2].

As a result of this strategic move, 22nd Century Group is poised to continue its growth trajectory in the rapidly evolving tobacco harm reduction market. With its innovative approach to tobacco products and commitment to improving health and wellness, the company is well-positioned to capitalize on the increasing demand for reduced-risk alternatives to traditional cigarettes.

References:
[1] 22nd Century Group, Inc. (2024, April 4). 22nd Century Group Signs Large New CMO Customer. Retrieved from https://www.nasdaq.com/press-release/22nd-century-group-xxii-signs-large-new-cmo-customer-2024-04-04
[2] 22nd Century Group, Inc. (n.d.). About 22nd Century Group, Inc. Retrieved from https://www.xxiicentury.com/