22nd Century Group, Inc. (NASDAQ: XXII) saw its shares reach for the stars first thing Friday, as the leading agricultural biotechnology company dedicated to improving human health with reduced nicotine tobacco, hemp/cannabis, and hops advanced plant technology, today announced the acquisition of privately held GVB Biopharma.
As a contract development and manufacturing organization (CDMO), GVB is believed to be one of the largest providers of hemp-derived active ingredients for the pharmaceutical and consumer goods industries worldwide based on total tonnage.
GVB has industry leading market positions and expertise in all facets of the hemp/cannabis industry, which include:
• Research and genetics
• Proprietary cryogenic hemp extraction
• Refining, conversion, and product formulation technology
• Leading supplier of Active Pharmaceutical Ingredients (API)
• Low-cost, scalable manufacturing capabilities
• Regulatory and compliance expertise
• Industry trusted high-quality products
• Current international capabilities
GVB’s strengths complement 22nd Century’s existing upstream and downstream value chains, which includes expertise in cannabinoid receptor science with CannaMetrix, plant research and proprietary genetics through its KeyGene partnership, breeding expertise with Extractas, and cultivation capabilities at Needle Rock Farms.
The combination with 22nd Century establishes a global one-of-a-kind asset to serve the rapidly growing hemp/cannabis ingredient market.
GVB expects 2022 revenue of approximately $48 million, a 58% increase year-over-year, gross margin in excess of 44% and positive cash flow. Upon closing, the transaction is expected to more than double 22nd Century’s revenue, be immediately accretive to adjusted EBITDA, and generate positive cash flow from the acquired assets in the near term.
XXII shares grabbed 16 cents, or 10.2%, to begin Friday’s session at $1.73.
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