22nd Century Group Inc (XXII)

[Vincenzo Pall]

Dawson James brokerage firm has raised its target price for XXII by 21%, from $7/share to $8.50, Its Research Report on XXII attributed that $1.50 increase entirely to increased revenue from its tobacco franchise. The 7-page report dated 6 January 2022 is well worth reading. This upgrade comes on the heels of their earlier Dawson report dated 29 December. The January report provides a lot of details worth reading while investors are waiting for Big Tobacco to stop shorting XXII's stock (if that's who is selling) and driving the share price down, Theoretically, that could make it more challenging if XXII wanted to enjoy a share price rise which would make it easier or XXII to raise additional funds via a modest secondary offering of its stock. However, from yesterday's fireside chat with Vivien Azer (Cowen), the industry's top tobacco analyst, President Mish seemed to indicate their cash assets were strong and CFO Mike Zercher said their quarterly burn rate has been stable (about $7+ million). So, it seems there will be no need for any fund raising or stock value dilution in the near term. In fact, the quarterly revenue, Dawson explicitly states, will be increasing due to tobacco sales and licensing agreements with other firms. The later has already increased due to hemp/cannabis licensing (Chronos). Hops licensing income is projected as starting to flow later, a number of quarters into the future.