22nd Century Group Becomes Member of Tobacco Master Settlement Agreement
September 02 2014 - 12:24PM
Business Wire
22nd Century Group, Inc. (NYSE MKT:XXII) announced today that
the Company has become a member of the U.S. tobacco Master
Settlement Agreement (MSA) through the acquisition of NASCO
Products, LLC, a federally licensed tobacco product manufacturer
and participating member of the MSA since 2005.
22nd Century Group, NASCO Products, and the Settling States of
the MSA have executed an Amended Adherence Agreement under which
22nd Century Group and its subsidiaries have agreed to comply with
the MSA and other requirements regarding the Company’s
manufacturing and marketing of tobacco products.
The MSA is an agreement among 46 U.S. states, the District of
Columbia, 5 U.S. territories (Settling States) and certain
participating tobacco product manufacturers, which became effective
in November 1998 and is administered by the National Association of
Attorneys General (NAAG). In brief, participating manufacturers of
the MSA have agreed to various restrictions on tobacco product
marketing and to contribute funds in perpetuity to the Settling
States based on unit sales of cigarettes.
In exchange for these settlement payments and marketing
restrictions, the Settling States agreed to release and discharge
certain past, present and future legal claims against the
participating manufacturers of the MSA such as claims that relate
to the use of or exposure to tobacco products manufactured in the
ordinary course of business, including without limitation any
future claims for reimbursement of health care costs allegedly
associated with the use of or exposure to tobacco products.
Now that 22nd Century’s super-premium priced brands, RED SUN®
and MAGIC®, are MSA brands, the Company will ramp up production of
its products within the next 30 days and will launch sales and
distribution efforts across the United States. Since the
introduction of 22nd Century’s brands in early 2011, sales have
been intentionally curtailed by the Company in order to limit the
complexity and costs associated with becoming a signatory of the
MSA.
Joseph Pandolfino, Founder and CEO of 22nd Century Group,
stated, “We are very pleased to have been approved by the Settling
States as a participating manufacturer of the MSA so that we can
now sell our brands under the MSA, which will assist in producing
sustainable revenue for the Company. Management greatly appreciates
our shareholders’ patience during this lengthy, but now concluded
process.”
The MSA and other state laws and regulations have made it
extremely burdensome for non-participating manufacturers (to the
MSA) to operate. Further, there has not been a new participating
manufacturer approved under the MSA since 2007. Approximately 97%
of cigarette unit sales in the U.S. are subject to the MSA. The
Settling States have been paid more than $90 billion in MSA
payments since the inception of the settlement agreement in 1998.
22nd Century will pay approximately $17,000 this week to the MSA in
a settlement payment for sales of its commercial brands before 22nd
Century became an MSA signatory.
For additional information, please visit:
www.xxiicentury.com
About 22nd Century Group, Inc.
22nd Century is a plant biotechnology company whose proprietary
technology allows for the levels of nicotine and other nicotinic
alkaloids (e.g., nornicotine, anatabine and anabasine) in the
tobacco plant to be decreased or increased through genetic
engineering and plant breeding. 22nd Century owns or is the
exclusive licensee of 129 issued patents in 78 countries plus an
additional 44 pending patent applications. Goodrich Tobacco
Company, LLC and Hercules Pharmaceuticals, LLC are wholly-owned
subsidiaries of 22nd Century. Goodrich Tobacco is focused on
commercial tobacco products and potential less harmful cigarettes.
Hercules Pharmaceuticals is focused on X-22, a prescription smoking
cessation aid in development.
Cautionary Note Regarding Forward-Looking Statements: This press
release contains forward-looking information, including all
statements that are not statements of historical fact regarding the
intent, belief or current expectations of 22nd Century Group, Inc.,
its directors or its officers with respect to the contents of this
press release. The words “may,” “would,” “will,” “expect,”
“estimate,” “anticipate,” “believe,” “intend” and similar
expressions and variations thereof are intended to identify
forward-looking statements. We cannot guarantee future results,
levels of activity or performance. You should not place undue
reliance on these forward-looking statements, which speak only as
of the date that they were made. These cautionary statements should
be considered with any written or oral forward-looking statements
that we may issue in the future. Except as required by applicable
law, including the securities laws of the United States, we do not
intend to update any of the forward-looking statements to conform
these statements to reflect actual results, later events or
circumstances, or to reflect the occurrence of unanticipated
events. You should carefully review and consider the various
disclosures made by us in our annual report on Form 10-K for the
fiscal year ended December 31, 2013, filed on January 30, 2014,
including the section entitled “Risk Factors,” and our other
reports filed with the U.S Securities and Exchange Commission which
attempt to advise interested parties of the risks and factors that
may affect our business, financial condition, results of operation
and cash flows. If one or more of these risks or uncertainties
materialize, or if the underlying assumptions prove incorrect, our
actual results may vary materially from those expected or
projected.
Redington, Inc.Tom Redington, 203-222-7399
22nd Century (AMEX:XXII)
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