22nd Century has created tobacco with 97 percent less nicotine
Last month, the FDA announced a new comprehensive plan for tobacco and nicotine regulation that will serve as a multi-year roadmap to “better protect kids and significantly reduce tobacco-related disease and death.” The approach shifts focus to nicotine and the issue of addiction as the center of the agency’s tobacco regulation efforts. The focus will be tobacco products with less nicotine.
Since then, shares of 22nd Century Group Inc. (XXII) have risen since then because it grows tobacco plants with just 3 percent of the nicotine in typical tobacco plant.
As stocks of cigarette giants plunged over the past two weeks, 22nd Century’s shares have gained about 70 percent, last traded at $2.35.
Bloomberg reports that producing a cigarette with low levels of nicotine, the addictive stimulant in cigarettes, has been a challenge for the industry since as far back as the 1960s. Large tobacco companies such as Philip Morris International Inc. (PM) have tried their hand at it and failed. The Food and Drug Administration has explored the issue for several years, though — in 2013 it held a listening session where the idea of cutting nicotine levels came up.
Second day of active trading in 22nd Century Group calls
Friday’s bullish flow created 2.3K open interest in Jan 3 call options. After reaching 52-week highs of $2.84 Monday, shares now down 13c to $2.34 and 3.7K Jan 4 calls have changed hands. Jan 3, Sep 2, and Oct 2 calls are next most active. Total volume is 12X daily average at 8.1K calls and 655 puts. Next earnings date not known, but possibly inside the August expiration.
XXII has a 52-week trading range of $0.81 to $2.84.
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