22nd Century Group, Inc. (NASDAQ: $XXII), a leading tobacco products company, has announced a significant expansion of its Contract Manufacturing Organization (CMO) business. The company has secured a commitment from an existing customer to supply filtered cigar products, further enhancing its portfolio in the tobacco sector.
As part of this new arrangement, 22nd Century will produce all filtered cigar products using an in-house predicate blend, which is expected to streamline production processes and ensure product quality. Initial shipments are slated for the fourth quarter of 2024, with anticipated annual volumes reaching 200,000 cartons or more.
This expansion follows a previously announced agreement with the same customer for conventional cigarette exports, which is projected to contribute an additional 20% to overall CMO volumes. The ramp-up in production for this segment is underway and is expected to continue steadily through 2024, with significant increases projected for 2025.
With a volume of 610,557 shares traded, this strategic move positions 22nd Century Group for enhanced profitability and growth in the evolving tobacco market. The company’s commitment to providing smokers with choices around nicotine consumption underscores its leadership in the industry.