22nd Century Group Unveils Trade Partners Program

CLARENCE, N.Y. — 22nd Century Group Inc. has kicked off a trade program with a twist.

The company's recently established Trade Partners Program provides retailers and distributors the opportunity to receive shares of 22nd Century Group common stock as a rebate for purchases of RED SUN brand cigarettes.

According to a prospectus supplement relating to the Trade Partners Program, up to $3 million of the company's pre-existing $45 million Form S-3 shelf registration statement may be used for common stock issuances under the program (not to exceed 300,000 shares). 22nd Century filed the document with the U.S. Securities and Exchange Commission on Jan. 9.

Participating distributors will earn $1 worth of 22nd Century common stock as a rebate for each carton of RED SUN purchased in 2015, while participating retailers will earn $3 worth of 22nd Century common stock as a rebate for each carton of RED SUN purchased this year.

The company believes this "novel program" will be a compelling vehicle to incentivize cigarette distributors and retailers to purchase and promote RED SUN cigarettes.

The RED SUN brand is designed to appeal to upscale, educated consumers while also winning the loyalty of specialty retailers and distributors who were instrumental in building Santa Fe Natural Tobacco Co.'s Natural American Spirit brand.

"While spearheading sales and marketing efforts at Santa Fe Natural Tobacco Co., I had opportunities to talk with and learn from hundreds of tobacconists who championed American Spirit," said 22nd Century's President and Chief Operating Officer Henry Sicignano III. "Though they appreciated the sales and profits afforded by American Spirit, these small-business owners expressed to me widespread disappointment that they never had the opportunity to own equity in the brand or in Santa Fe Natural Tobacco Co."

The new 22nd Century Group Trade Partners Program takes aim at that point.

"We believe all of the retailers and distributors who are aware of the next phase in our company's development — especially pertaining to our modified risk cigarettes in development — are impressed that 22nd Century has a mission of reducing the harm caused by smoking," said Chief Financial Officer John Brodfuehrer. "Furthermore, tobacconists understand there is a huge market demand for a reduced-risk combustible cigarette. We intend to meet that demand."