US (NY): “As cannabis regulation evolves, we believe that companies able to control the traits and consistency of the plants will command"

22nd Century has announced new initiatives to strengthen and maximize revenue opportunities in its hemp/cannabis franchise. Included in these developments is the announcement of strategic partnerships with two plant breeders in the northern and southern hemispheres providing the Company with year-round growing capabilities, close partnership activities being conducted with Aurora Cannabis, and the establishment of a newly created Canadian subsidiary. These newest developments further support 22nd Century’s plans for multiple avenues of hemp/cannabis revenue that will begin to be realized in late 2021.

“The addition of breeders who specialize in alkaloid-based plant cultivation to our network of strategic partnerships provides us with the competitive edge to commercialize our second-generation IP and technologies,” said James A. Mish, chief executive officer of 22nd Century Group. “As cannabis regulation evolves, we believe that companies able to control the traits and consistency of the plants will command a premium price and margin in the marketplace. 22nd Century is well-positioned to capitalize on the tremendous potential in the global legal cannabis space by creating hemp/cannabis plants that have stable, specific cannabinoid levels at commercial scale for various end-use markets.

“As a matter of preparedness, earlier we announced a $40 million registered direct offering through Cowen and Company, LLC,” Mish continued. “Cowen is well-known as a pioneer in the cannabis institutional markets, and with this registered direct placement, 22nd Century is now squarely positioned in the mainstream of the cannabis equity space. Proceeds from this offering will be used as needed for future strategic growth opportunities as our hemp/cannabis market activity continues to increase. With the Special Equities Group as our financial advisor on this transaction to the Company, we now have ample financial flexibility for this franchise as we advance our revenue-generating initiatives later this year.”

Strategic Plant Breeding Partnerships
With its breeding partnerships in place, 22nd Century Group has now secured all key partnerships needed to maximize and support each of the five components in the upstream segment of the cannabinoid value chain including: plant profiling (CannaMetrix); plant biotechnology (KeyGene); commercial-scale plant breeding; plant cultivation (Needle Rock Farms and breeder network); and ingredient extraction/purification (Panacea). In doing so, 22nd Century has built a unique ability to accelerate the delivery of valuable, commercial-scale plant lines and intellectual property for the life science, consumer product, and pharmaceutical end-use markets in just two years.

The Company will provide details regarding the breeding strategic partnerships later this month and will present its go forth commercialization strategy for its hemp/cannabis franchise on its second quarter 2021 earnings call in early August.

The Company is actively pursuing multiple hemp/cannabis revenue streams targeted in 2021. These include monetization of a portion of the Company’s valuable hemp/cannabis intellectual property and offtake commitments for the Company’s high CBD and CBG plant lines currently growing in Needle Rock Farms of Crawford, Colorado for commercialization in the forms of flower, distillate, or isolate.

Valuable Biosynthesis IP License and Aurora Partnership
22nd Century has been at the forefront of hemp/cannabis research since 2014 when the Company entered into a global research and license agreement with Anandia Laboratories in Canada through which 22nd Century was granted an exclusive sublicense for global IP rights to commercialize key aspects of cannabinoid biosynthesis in the hemp/cannabis plant and microorganisms. These licenses were transferred to Aurora Cannabis when it acquired Anandia in 2018. 22nd Century and Aurora are working closely together to enforce their IP against infringing parties and are exploring collaborative commercial development opportunities. The Company expects licensing and revenue from the IP shared with Aurora to commence in the second half of 2021.