22nd Century Group's Road to Cannabis May Have Some Potholes
22nd Century Group (NASDAQ: XXII) is a biotechnology firm making plants like tobacco and cannabis less dangerous, more potent, and more lucrative. Recognizing the enormous potential that cannabis bioscience offers, the company -- 22CG for short -- undertook several funding rounds to raise money to secure its partners and improve company infrastructure to become, in its own words, the "Monsanto of cannabis." But the company is quickly using up its cash and may need to undergo more funding rounds in the near future, watering down current investors' holdings in the process.
Alongside efforts to improve hops for brewers, 22CG is developing very low nicotine (VLN) tobacco and new cannabis varieties that yield more of the CBD and THC increasingly used in consumer products.
The VLN tobacco products are helping the company grow its revenue -- up 30% year over year from Q1 2021 to Q1 2022 -- and its hemp/cannabis franchise could have similar potential. To reach its goals, the company has purchased or is partnering with other cannabis companies to improve their products, rather than developing its own production lines in-house.
Source Fool.com
