22nd Century Group Completes Strategic Acquisition to Establish Hemp/Cannabis Manufacturing Powerhouse

Major Market Consolidation: XXII Doubles Revenue Through GVB Biopharma Deal

22nd Century Group (Nasdaq: XXII), an agricultural biotechnology innovator, has unveiled a transformational acquisition of GVB Biopharma, a privately held contract development and manufacturing organization (CDMO). The strategic combination positions the merged entity as a comprehensive player in the rapidly expanding hemp/cannabis ingredient sector, with immediate implications for revenue scale and operational efficiency.

The transaction delivers substantial financial impact: GVB Biopharma projects 2022 revenue of approximately $48 million, reflecting a 58% year-over-year surge, coupled with gross margins exceeding 44% and positive cash generation. Upon closing, the acquisition is expected to more than double 22nd Century’s total revenue and immediately boost adjusted EBITDA while generating positive cash flow from operations.

Strategic Synergies: Vertically Integrated Value Chain

The acquisition creates a uniquely positioned global platform by merging complementary capabilities across the supply chain. GVB Biopharma brings established strengths including proprietary cryogenic extraction technology, advanced refining and formulation capabilities, and leading supplier credentials for Active Pharmaceutical Ingredients (API). The company operates three manufacturing facilities—a 30,000 sq. ft. hemp ingredient facility in Central Oregon, a 40,000 sq. ft. finished product operation in Las Vegas, and an industrial-scale extraction center in Prineville, Oregon.

22nd Century contributes cannabinoid receptor expertise through CannaMetrix, proprietary genetics via KeyGene partnerships, breeding capabilities through Extractas, and cultivation operations at Needle Rock Farms. This combination internalizes a comprehensive contract manufacturing platform designed to monetize proprietary plant genetics and intellectual property across the value chain.

Market Position and Customer Traction

GVB Biopharma commands an estimated 15% share of the hemp-derived active ingredients market, establishing itself as best-in-class in industry operations. The company maintains a trusted supplier relationship with prominent CBD and cannabinoid brands including Cookies, Nuleaf, and Canaxis Pharma. 2021 performance highlights include distribution of more than five billion CBD doses, demonstrating substantial market penetration and customer diversification.

International expansion represents another growth vector, with existing offices in the United Kingdom and Brussels, plus multiple joint venture opportunities across Europe for processing and distribution capabilities tailored to regional market dynamics.

Transaction Structure and Governance

The acquisition consideration includes assumption of approximately $4.5 million in debt, GVB’s closing costs, and issuance of 32,900,000 unregistered shares of 22nd Century common stock. Financial advisor Cowen represented GVB, while Grant Thornton provided independent valuation services. Legal counsel included Dorsey & Whitney LLP for GVB and Shulman Rogers PC for 22nd Century.

James A. Mish, CEO of 22nd Century Group, characterized the transaction as enabling rapid scaling of the hemp/cannabis franchise while capturing scale and cost efficiencies through vertically integrated cannabinoid manufacturing. The combined entity now positions itself to directly capitalize on differentiated plant science and proprietary intellectual property across pharmaceutical and consumer applications.