22nd Century Group, the Clarence cigarette manufacturer whose stock is under siege from short sellers, said Friday that it has signed a deal to produce private-label cigarettes for an 800-store tobacco products chain.
22nd Century officials did not indicate how much revenue they expect to generate from the deal with Smoker Friendly International, but the agreement is the first one that will bring new business to the North Carolina cigarette factory that the company purchased and outfitted with equipment over the past year.
Henry Sicignano III, 22nd Century’s president, said he expects the hundreds of the Smoker Friendly stores to carry the “super premium” Red Sun cigarettes that the company plans to start making and selling once the company is approved as a participating member of the 1998 Tobacco Master Settlement Agreement between the tobacco industry and 46 states.
22nd Century said the approval of the master settlement agreement is expected “imminently.”
The company also said it is holding discussions with six other companies about doing contract manufacturing for cigarettes that they sell, including some that would be sold outside the United States.
22nd Century’s stock rose by 2 cents to $3.05 in early trading today. The stock has regained most of its value after plunging by 15 percent on Wednesday after a short seller, GeoInvesting, issued a lengthy report that raised doubts about 22nd Century’s business plans and its ability to generate the kind of sales that it has said it expects. 22nd Century executives responded by calling the GeoInvesting report inaccurate and misleading.