The pathway that 22nd Century Group Inc. is on for developing innovative tobacco and cannabis products got a little bumpier this week with the elimination of 10 jobs in Mocksville.
The company, based in Williamsville, N.Y., operates a tobacco-manufacturing plant in Mocksville, where it had 61 of its 79 employees until this week.
James Vail, 22nd Century’s communications director, said Friday that the 10 jobs are with its wholly owned NASCO Tobacco Products LLC subsidiary.
NASCO operates as a contract manufacturer of traditional cigarettes and filtered cigars, which has produced the bulk of 22nd Century’s annual revenue to date.
Vail said 22nd Century’s workforce now consists of 51 employees in North Carolina and 18 in Williamsville.
When asked about a reason for the job cuts, Vail deferred to a statement in 22nd Century’s Nov. 17 quarterly regulatory filing: “As part of its ongoing strategic cost alignment efforts, the company has taken broad-based actions to reduce expenses across many areas of the company, including employee headcount reductions and legal expense reductions related to the discontinuation of non-strategic patent and trademark maintenance.”
On Nov. 8, the company reported a $10.2 million loss in the third quarter.
The job cuts come as 22nd Century received authorization Dec. 17 from the Food and Drug Administration to market and sell two styles of its very-low-nicotine traditional cigarettes.
Meanwhile, the company said Dec. 15 that it had begun searching for its third chief executive in less than five months after Clifford Fleet announced he was stepping down to become president and chief executive of the Colonial Williamsburg Foundation.
The FDA approved 22nd Century’s Moonlight and Moonlight menthol styles, which entered the premarket tobacco-application process in December 2018. The premarket standard requires the FDA to consider products’ risks and benefits to the population as a whole, including users and non-users.
Vail said Friday that 22nd Century projects that limited distribution of the Moonlight products could begin in the second quarter.
“We’re not ready to disclose those markets yet,” Vail said. “We’re plowing through where the best places are to launch.
“We believe 2020 is going to be the best year that 22nd Century has had yet, and we’re trying to prepare the company for its next steps.”
Michael Zercher, president of 22nd Century, said the FDA authorization “is a major milestone in our efforts to drive meaningful change in the tobacco industry.”
Zercher compared 22nd Century’s achievement with the FDA premarket approval for Philip Morris International’s IQOS heat-not-burn traditional cigarette device and Marlboro Heatsticks, Smooth Menthol Heatsticks and Fresh Menthol Heatsticks styles, as well as for eight General Snus styles by Swedish Match USA Inc.
“Those other companies ... are very large, global tobacco companies with significant financial, scientific and regulatory affairs resources, so we are extremely proud of the world-class work done by our regulatory team to successfully secure this marketing authorization from the FDA,” Zercher said.
Mitch Zeller, director of the FDA’s Center for Tobacco Products, said FDA authorization represents the first product “to successfully demonstrate the potential for these types of tobacco products to help reduce nicotine dependence among addicted smokers.”
“We’ll be closely monitoring how Moonlight and Moonlight Menthol are marketed, and will take action as necessary if the company fails to comply with any applicable statutory or regulatory requirements, or if there is a notable increase in the number of non-smokers, including youth, using these products.”
The company bases its claim of 95% less nicotine on its cigarettes containing just 0.5 milligrams of nicotine per gram of tobacco, compared with an average of 20 milligrams, or 0.71 ounces, for many of the top-selling traditional cigarette brands.
“Following a rigorous science-based review ... the agency determined that authorizing these reduced nicotine products for sale in the U.S. is appropriate for the protection of the public health,” the FDA said in a statement.
Anti-smoking advocates have expressed concern that reducing nicotine levels too much could lead smokers to consume more cigarettes to get the same amount of nicotine, thereby increasing their exposure to carcinogens from the burning of the tobacco leaves.
“Generally, the FDA determined that smokers of reduced nicotine cigarettes tend to actually decrease the number of cigarettes smoked per day and that they do not change the intensity of their puff or inhalation.”