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22nd Century Group Secures $21M Debt Financing For Accelerated Expansion

22nd Century Group, Inc. XXII announced a new $21 million senior secured debenture financing to support increased working capital needs related to the significant growth outlook in both its VLN and GVB business lines. The new three-year financing was issued at 5% original issuance discount, will bear cash interest at a rate of 7% per annum, and commence principal amortization in the second year at a rate of 2% of the original balance per month. The company has the option to redeem the facility early starting in the second year.

The company is on track to launch VLN in up to 18 states by the end of 2023 with an expanded list of retail partners. 22nd Century’s GVB business is planning for rapid expansion in 2023, with both traditional ingredient sales activities and new CDMO opportunities to extend its leadership position in the growing hemp/cannabis industry.

“Customer demand for our high-quality CBD extracts and ingredients has scaled steadily, even after our Grass Valley fire last November. We believe that GVB is now the largest buyer of bulk CBD crude extract and seller of finished ingredients in North America. Our dominant position in ingredients has also increased demand for our CDMO capabilities with multiple leading consumer CPBD product brands wanting to centralize with a complete, vertically integrated solution from product design to finished goods and even retail category management through our increasing distribution capabilities,” stated James A. Mish, CEO.

In conjunction with the new credit facility, 22nd Century has also extended the maturity of $2.7 million in legacy seller notes assumed with its acquisition of GVB Biopharma to mid-2024.

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