MOCKSVILLE, N.C., Jan. 15, 2026 (GLOBE NEWSWIRE) -- 22nd Century Group, Inc. (Nasdaq: XXII), the only tobacco products company that has for 27 years led and continues to lead the fight against the harms of smoking driven by nicotine addiction, today issued the following letter to stockholders from Lawrence Firestone, the Chief Executive Officer of 22nd Century Group, Inc.:
2025 Year-in-Review Shareholder Letter
Dear Shareholders,
2025 was a pivotal year for 22nd Century Group, Inc. as we exited our multi-year restructuring, began advancing our strategic initiatives, strengthened our financial foundation, and reinforced our leadership position in tobacco harm reduction. In a complex regulatory and operating environment, our team remained focused on disciplined execution, scientific integrity, and long-term value creation for our shareholders.
Tobacco Harm Reduction
We remain dedicated to being the leader of the tobacco harm reduction movement through science-based innovation, regulatory alignment, and responsible commercialization of reduced nicotine content combustibles. Our mission is to provide adult smokers with alternatives that significantly reduce nicotine exposure, supporting the potential for reduced dependence while preserving consumer choice.
The core of this strategy is our proprietary VLN reduced-nicotine cigarette platform, the market leading, first and only combustible cigarette authorized by the U.S. Food and Drug Administration as a Modified Risk Tobacco Product (MRTP). VLN products contain approximately 95% less nicotine than conventional cigarettes, without altering taste or smoking ritual, offering a differentiated and scientifically validated approach to harm reduction based on VLN products ability to significantly reduce nicotine exposure and nicotine dependence in a very short period of time.
Following the relaunch of our VLN and partner VLN-branded products in 2025, we are beginning to receive early feedback from adult consumers in the marketplace. We are encouraged by initial testimonials from smokers who have chosen VLN products as part of a health- and wellness-oriented approach to nicotine reduction. In several cases, consumers have reported meaningful reductions in cigarette consumption, including one individual who indicated a reduction of approximately 66% in just 12 weeks. As we move through 2026, we look forward to responsibly sharing additional insights from these experiences as we continue to evaluate consumer engagement and outcomes.
Strategic and Operational Progress
Throughout 2025, we made meaningful progress executing against our strategic priorities:
- Transition to Higher-Margin Branded Products: We continued shifting our business mix toward proprietary, value-added offerings, with VLN products being the centerpiece of our long-term growth strategy.
- Commercial Expansion: VLN product distribution expanded across additional retail locations and geographies, supported by growing awareness among adult smokers seeking reduced-nicotine alternatives. We are now in almost 2,000 retail locations in over 20 states.
- Operational Discipline: Cost-reduction initiatives and operational streamlining implemented during our strategic reset continued to yield results, lowering our operating expense base and improving cash efficiency.
- Balance Sheet: We exited 2025 with a significantly strengthened balance sheet, including the elimination of debt and improved liquidity, providing flexibility to execute our strategy.
While we remain focused on reaching sustainable profitability, we believe the foundation built in 2025 materially improves our long-term financial outlook.
Regulatory Landscape and FDA Proposed Nicotine Rule
In January 2025, the U.S. Food and Drug Administration issued a proposed rule to establish a maximum nicotine content for cigarettes, a landmark regulatory development with the potential to fundamentally reshape the combustible tobacco market. The proposed rule reflects growing regulatory consensus that reducing nicotine to minimally addictive levels may significantly decrease smoking initiation and dependence.
22nd Century Group is uniquely positioned in this evolving landscape. Our VLN® products were developed specifically to meet very low nicotine thresholds and are supported by extensive scientific research and FDA authorization. While the timing and final form of any regulation remain uncertain, we believe this proposal underscores the strategic relevance of our harm-reduction platform and validates years of investment in reduced-nicotine innovation.
Outlook for 2026
As we enter 2026, we do so with a clearer strategic focus and a stronger financial and operational foundation. Our priorities include:
- Expanding VLN product distribution and consumer awareness
- Continuing disciplined cost management and capital allocation
- Advancing toward EBITDA breakeven as higher-margin revenues scale
- Remaining actively engaged with FDA regulators and public-health stakeholders
We believe the convergence of regulatory momentum, consumer awareness, and our differentiated product portfolio creates a compelling opportunity for long-term value creation.
Appreciation
On behalf of the Board of Directors and the entire 22nd Century Group team, thank you for your continued support and confidence. The progress made in 2025 reflects the resilience, commitment, and belief of our employees, partners, and shareholders. We remain committed to transparency, responsible leadership, and advancing our mission to reduce the harm associated with combustible tobacco.
Sincerely,
Lawrence D. Firestone
Chairman and Chief Executive Officer
22nd Century Group, Inc.
About 22nd- Century Group, Inc.
22nd Century Group is pioneering the tobacco harm reduction movement by enabling smokers to take control of their nicotine consumption.
Our Technology is Tobacco
Our proprietary non-GMO reduced nicotine tobacco plants were developed using our patented technologies that regulate alkaloid biosynthesis activities resulting in a tobacco plant that contains 95% less nicotine than traditional tobacco plants. Our extensive patent portfolio has been developed to ensure that our high-quality tobacco can be grown commercially at scale. We continue to develop our intellectual property to ensure our ongoing leadership in the tobacco harm reduction movement.
Our Products
We created our flagship product, the VLN cigarette using our low nicotine tobacco, to give traditional cigarette smokers an authentic and familiar alternative in the form of a combustible cigarette that helps them take control of their nicotine consumption. VLN cigarettes have 95% less nicotine compared to traditional cigarettes and have been proven to allow consumers to greatly reduce their nicotine consumption.
FDA Authorized
Our VLN cigarette is the only low nicotine combustible cigarette authorized by the FDA in the United States.
VLN is a registered trademark of 22nd Century Limited LLC.
Learn more at?xxiicentury.com, on?X (formerly Twitter), on?LinkedIn, and on?YouTube.
Learn more about VLN at tryVLN®.com.
Cautionary Note Regarding Forward-Looking Statements
Except for historical information, all of the statements, expectations, and assumptions contained in this press release are forward-looking statements, including but not limited to our full year business outlook. Forward-looking statements typically contain terms such as "anticipate," "believe," "consider," "continue," "could," "estimate," "expect," "explore," "foresee," "goal," "guidance," "intend," "likely," "may," "plan," "potential," "predict," "preliminary," "probable," "project," "promising," "seek," "should," "will," "would," and similar expressions. Forward-looking statements include, but are not limited to, statements regarding (i) our cost reduction initiatives, (ii) our expectations regarding regulatory enforcement, including our ability to receive an exemption from new regulations, and (iii) our financial and operating performance. Actual results might differ materially from those explicit or implicit in forward-looking statements. Important factors that could cause actual results to differ materially are set forth in "Risk Factors" in the Company's Annual Report on Form 10-K filed on March 20, 2025, and Quarterly Reports on Form 10-Q on May 13, 2025, August 14, 2025, and November 4, 2025. All information provided in this release is as of the date hereof, and the Company assumes no obligation to and does not intend to update these forward-looking statements, except as required by law.
Investor Relations & Media Contact
Matt Kreps
Investor Relations
22nd Century Group
investorrelations@xxiicentury.com
214-597-8200
