1. The Move
22nd Century Group stock rose 41 bags, from the November 26th, 2012, low of $0.15…
…to the March 11th, 2014 high of $6.36.
That was a 4,140% move in 470 days or 1.29 years. The CAGR was 1,836%.
2. Business Description
22nd Century Group, Inc. (XXII.K) is a plant biotechnology company. The Company is focused on technology that allows increasing or decreasing the level of nicotine and other nicotinic alkaloids in tobacco plants, and levels of cannabinoids in cannabis plants through genetic engineering and plant breeding. It is engaged in various activities, including research and development of less harmful or modified risk tobacco products and tobacco plant varieties; development of X-22, a smoking cessation aid consisting of very low nicotine (VLN) cigarettes; manufacture, marketing and distribution of its RED SUN and MAGIC cigarettes; production of SPECTRUM research cigarettes for the National Institute on Drug Abuse (NIDA); contract manufacturing of third-party branded tobacco products, and research and development of plant varieties of hemp/cannabis, such as plants with low to no amounts of delta-9-tetrahydrocannabinol (THC), plants with high levels of cannabidiol (CBD), and other non-THC cannabinoids.
3. Fundamental Situation at the Bottom
4. Fundamental Situation at the Top
5. Brief Story
22nd Century Group, Inc. was an obscure OTCBB micro-cap that signed a worldwide Research License and Commercial Option agreement with British American Tobacco (a $98 B cap at the time), which gave it royalty revenues:
Investors got enthusiastic about the prospects for this agreement and pushed the stock higher, despite the net income losses, which have continued to this day. The # of shares outstanding grew from 30 million at the 2012 lows to 126 million in 2019, and the company has an accumulated deficit of $110 M. The agreement with British American Tobacco ended in September 2017:
22nd Century Group’s bags came from a meager market cap (just $5 M) and the catalyst of a royalty agreement with a well-known mega-cap, British American Tobacco.