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22nd Century Group, the Clarence-based cigarette company, has won permission from federal tobacco regulators to start making its own cigarettes.

The company has been granted a permit to produce tobacco products by the U.S. Treasury’s Alcohol and Tobacco Tax and Trade Bureau in a move that brings 22nd Century closer to its goal of being able to begin cigarette production.

The company late last year took two major steps to pave the way to begin producing its own cigarettes, which until now have been produced by contract manufacturers.

22nd Century last December paid $3.4 million to purchase all of the equipment at a bankrupt cigarette manufacturer’s factory in Mocksville, N.C.. Three months earlier, it agreed to pay $3 million to acquire another North Carolina company, NASCO Products, and related cigarette-manufacturing machinery in a deal that gave 22nd Century its own federally licensed tobacco manufacturer and made it a participating member of the 1998 Tobacco Master Settlement Agreement between the tobacco industry and 46 states.

22nd Century still needs to work out an adherence agreement with the National Association of Attorneys General to take NASCO’s place as a member of the tobacco settlement group. Company executives said that agreement is “very close to final.” Once that happens, 22nd Century expects to close on the NASCO acquisition, said Joseph Pandolfino, the company’s chief executive officer.

The company, which began trading its stock Tuesday on the New York Stock Exchange MKT for small companies, also said it raised about $640,000 through an auction of cigarette manufacturing equipment and other items from the Mocksville factory that it did not need for its own cigarette production efforts there.

The company uses proprietary technology that allows it to manipulate the levels of nicotine and other chemicals in tobacco. Its Spectrum brand of research cigarettes can have the same amount of tar as conventional cigarettes but nicotine levels that vary from very low to very high. It also has plans to produce its Red Sun and Magic super-premium cigarette brands.

email: drobinson@buffnews.com