Due to onerous legal mandates, hemp products face severe restrictions, but 22nd Century aims to change all that
Innovation is an often-cited attribute but few organizations reach it. Even fewer pioneer an advancement that revolutionizes its target sector. One company that has the right mix of paradigm-shifting potential and a proven track record is 22nd Century Group Inc (NYSEMKT:XXII).
Leveraging years of experience and multiple proprietary products, 22nd Century Group is one of the most ground-breaking plant biotechnology firms in the investment markets. According to its corporate profile, XXII’s mission is “to reduce the harm caused by smoking.”
To that end, 22nd Century Group wholly owns four operating subsidiaries, with specialties ranging from reduced-risk cigarettes, industrial hemp-based products, and smoking cessation therapies.
From an investment perspective, XXII stock benefits from exceptionally favorable timing. New retail products have generated intense demand for tobacco-alternatives. Cultural and political shifts have also warmed to the production of hemp for industrial and consumer products.
Even Big Tobacco firms are expending millions of research and development dollars towards forwarding alternative cigarette products. The catalyst driving these changes is public health. This dynamic is creating strange bedfellows between public health agencies and the tobacco industry.
It’s in this backdrop that 22nd Century is banking on a revolutionary concept — 0% THC hemp products.
The THC-free Revolution
To fully appreciate XXII’s research into THC-free hemp, we have to acknowledge both the scientific and political challenges. Many are already familiar with cannabis/hemp, largely due to its proliferation in popular culture. However, it’s in the granularity where the greatest profit potential is found.
The active ingredients in cannabis are called cannabinoids. According to 22nd Century’s website, cannabinoids are “are a class of diverse naturally-occurring compounds that act on the cannabinoid receptors of human cells. The most notable cannabinoid is THC, the primary psychoactive compound of cannabis.”
Marijuana with high levels of THC and hemp with less than 0.3% THC are both derived from the cannabis plant (Cannabis sativa) . Because of that, hemp contains trace amounts of THC. The THC levels in hemp products is nowhere near the potency of recreational marijuana. Nevertheless, hemp does contain THC, and that inescapable fact leads to severe political repercussions.
According to the U.S. Drug Enforcement Administration, marijuana is a Schedule 1 drug. Presently, enforcement is relatively lax, particularly because more individual states have voted for marijuana legalization to varying degrees. But because the Schedule 1 classification is a federal mandate, the ability for companies to market industrial hemp products is extremely limited.
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Under federal law, any hemp crop that contains more than 0.3% THC must be destroyed — no exceptions are made. What makes this law even more onerous is that hemp farmers have no way of hedging this potential disaster through an insurance policy. Thus, only the most fundamentally sound organizations are able to put this open liability on their books, and even then, it’s a remarkable risk.
This is exactly why 0% THC is such a critical innovation. Hemp has a vast array of consumer and medicinal uses, and in many cases, hemp-based products are superior. For instance, hemp has a natural propensity to withstand rot and water damage, historically making it an ideal choice for marine applications.
Politically, the Trump administration has taken a hard-line stance on law and order. Although this arena is often volatile, it’s unlikely that marijuana’s Schedule 1 classification will be removed. To get around this problem requires a biological solution. This naturally fits into XXII skill set, which not only conceived of the idea but has already achieved success in creating non-GMO, zero THC hemp.
Agriculture: The New Biotech Trend
Another tailwind is budding enthusiasm for agricultural innovations. Biotech firms focused on pharmaceutical therapies have recently met significant social opposition. Rising drug prices and other deep-seated corruption scandals have made pharmaceuticals a hot-button topic during the 2016 election cycle.
Agricultural biotech firms, in sharp contrast, have largely escaped negative media attention during this time. This has enabled firms like Agrium Inc. (USA) (NYSE:AGU) to continue to push into pioneering research that may one day dramatically increase crop output throughout the world. Ending world hunger is often stereotypically cited as a pat answer in beauty pageants, but the agricultural biotech sector — 22nd Century‘s bread and butter — could truly pave the way.
The main difference between XXII and some of its agro-competitors is that 22nd Century is committed to research that improves public health. Again, their primary aim is to promote healthier alternatives to tobacco and cannabis-related products. Companies like Monsanto Company (NYSE:MON) have raised public ire for its casual treatment of genetically modified organisms, or GMOs.
For potential investors, the standout component for XXII stock is its track record. The innovations are not just theoretical — as the days go by, the plant biotech firm is getting closer and closer to achieving its various targets. Just last week, XXII shares shot up double-digits on the announcement that 22nd Century’s collaboration with North Carolina State University “has yielded several new Very Low Nicotine (VLN) tobacco varieties that contain no foreign DNA and no trace of genetic modification,” according to Zacks Equity Research.
Multiple publicly-traded firms do exist in the marijuana and hemp sector, such as HempAmericana Inc (OTCMKTS:HMPQ) and Hemp Inc (OTCMKTS:HEMP). However, there’s no denying that, at least for now, XXII stock distinguishes itself from the competition.
On a year-to-date basis, 22nd Century shares are up a whopping 65%. You are simply not going to find this kind of return in the broader markets. With alpha being so difficult to extract these days, allocating some risk capital to XXII makes a lot of sense. Furthermore, its trailing five-year return is 275%, providing confidence that this is no flash-in-the-pan opportunity.
The Bottom Line for 22nd Century
Speculative investments are a dime a dozen particularly because they operate purely on potential. Typically, these “spec stocks” are nothing more than paperwork filed with the appropriate agencies.
In contrast, 22nd Century stands out from its core competitors due to the progress they have made in their R&D endeavors. Through key partnerships, the company is on the verge of advancing multiple innovations. Additionally, fundamental tailwinds are supportive of its underlying technologies.
Undoubtedly, one of the exciting developments for 22nd Century is its THC-free hemp research. Because of onerous legal barriers, hemp products are unfairly capped from mainstream distribution. THC-free technology would open up doors for an entire industry, and would secure 22 nd Century Group (NYSEMKT XXII) as one of its core pioneers.
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This report/release/profile is a commercial advertisement and is for general information purposes only. We are engaged in the business of marketing and advertising companies for monetary compensation unless otherwise stated below. The Wealthy Venture Capitalist and its employees are not a Registered Investment Advisors, Broker Dealers or a member of any association for other research providers in any jurisdiction whatsoever and we are not qualified to give financial advice. The information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of the available data. Sometimes human error can attribute to honest mistakes in reporting on issues regarding public companies and overall capital markets, and as such we are not responsible for the complete accuracy in these reports as the reader is required to verify all statements to ensure they are completely accurate. The Wealthy Venture Capitalist’s controlling parent company has been compensated fifteen thousand dollars per month for a 12 month contract by 22nd Century Group. The Wealthy Venture Capitalist’s controlling parent company has since renewed their contract with 22nd Century Group for an additional year for four thousand two hundred dollars per month paid in advance for marketing services. The Wealthy Venture Capitalist encourages readers and investors to supplement the information in these reports with independent research and other professional advice. All information on featured companies is provided by the companies profiled through their website, news releases, and corporate filings, or is available from public sources and The Wealthy Venture Capitalist makes no representations, warranties or guarantees as to the accuracy or completeness of the disclosure by the profiled companies. The Private Securities Litigation Reform Act of 1995 provides investors a ‘safe harbor’ in regard to forward-looking statements. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, goals, assumptions or future events or performance are not statements of historical fact may be “forward looking statements”. Forward looking statements are based on expectations, estimates, and projections at the time the statements are made that involve a number of risks and uncertainties which could cause actual results or events to differ materially from those presently anticipated. Forward looking statements in this action may be identified through use of words such as “projects,” “foresee,” “expects,” “will,” “anticipates,” “estimates,” “believes,” “understands,” or that by statements indicating certain actions “may,” “could,” or “might” occur. Understand there is no guarantee past performance will be indicative of future results. Past Performance is based on the security’s previous day closing price and the high of day price during our promotional coverage. Readers must visit our website at www.
