22nd Century Group, Inc. reported a challenging financial performance for the fiscal year ending December 31, 2024, with net revenues of $24.4 million, a decrease of 24.3% from $32.2 million in 2023. The decline was primarily attributed to reduced sales volumes of filtered cigars and export cigarettes, despite some growth in cigarette sales and new cigarillo products. The company recorded a gross loss of $2.4 million, an improvement from a gross loss of $8.7 million in the previous year, reflecting cost-cutting initiatives and a favorable shift in product mix.
The company undertook significant restructuring efforts in 2023, including the divestiture of its GVB Biopharma hemp business, which was completed in December 2023. This strategic shift allowed 22nd Century to focus solely on its tobacco operations, particularly its Reduced Nicotine Content (RNC) products, including the VLN® brand. The company has expanded its distribution footprint to over 5,000 stores across 26 states and plans to enter national distribution in 2025, targeting a substantial share of the $12 billion non-Tier 1 U.S. tobacco market.
Operationally, 22nd Century's employee headcount stood at 56 as of December 31, 2024, with a focus on enhancing efficiency within its contract manufacturing operations. The company has also signed new agreements with national-scale convenience store distribution partners to support the availability of its VLN® products. However, the company continues to face challenges, including a significant accumulated deficit of $393.9 million and ongoing losses, raising substantial doubt about its ability to continue as a going concern.
Looking ahead, 22nd Century is poised to benefit from a proposed FDA rule mandating reduced nicotine content in all combustible tobacco products, which aligns with its existing product offerings. The company is actively pursuing additional funding strategies to support its operations and growth initiatives, including potential equity sales and partnerships. Despite the challenges, management remains optimistic about the future, emphasizing the importance of its RNC products in the evolving tobacco landscape.
About 22nd Century Group, Inc.
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