22nd Century Group Inc. (NASDAQ:XXII) has acquired privately held GVB Biopharma, which is a contract development and manufacturing organization that is supposedly one of the biggest providers of hemp-derived active ingredients for the pharmaceutical and consumer goods industries globally, based on total tonnage.
Trading Data
On Friday, XXII stock surged 7% to $1.68 with more than 3.26 million shares, compared to its average volume of 1.56 million shares. The stock moved within a range of $1.6250 – 1.7600 after opening trade at $1.63.
GVB’s main USPs bolster 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.
GVB has projected revenue of approximately $48 million in 2022, a 58% increase year-over-year, gross margin in excess of 44% and positive cash flow. The combination with 22nd Century positions them favorably in the swiftly growing hemp/cannabis ingredient market.
After closing, the transaction is anticipated 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.
Phillip Swindells, Chief Executive Officer at GVB, states that they have focused on building a solid client base since 2017, and continue to add new, rapidly growing customers as demand in the industry shoots up. More than 5 billion doses of CBD were solid in 2021, and he hopes that this year will be even better!
Technical Data
XXII stock is trading below the 20-Day and 50-Day Moving averages of $1.84 and $2.10 respectively. Moreover, the stock is trading below the 200-Day moving average of $2.65.
