22nd Century Group Enters Cannabis Space

22nd Century Group, Inc. (NYSE MKT: XXII) announced today that the Company's wholly-owned subsidiary, Botanical Genetics, LLC, has entered into a worldwide license agreement with Anandia Laboratories Inc. (Anandia), a plant biotechnology company based in Vancouver, granting 22nd Century Group exclusive rights in the U.S. to four genes required for cannabinoid production in the cannabis plant. The proprietary technology licensed from Anandia allows the modification of cannabinoid levels in cannabis providing 22nd Century Group an exclusive competitive advantage in the burgeoning area of cannabis biotechnology. In brief, the proprietary technology allows for the (i) increase in the production and content of all or certain subsets of cannabinoids in the cannabis plant, (ii) elimination of cannabinoids in hemp varieties, and (iii) modification of the cannabinoid profile (percentage content of each cannabinoid to the total content of all cannabinoids) for the production of unique cannabis plant varieties for the medical marijuana industry. The license also grants 22nd Century Group co-exclusive rights with Anandia to this proprietary technology in all countries outside of the U.S. and Canada. Anandia retains exclusive rights in Canada. The technology includes 23 patent applications filed between August 2010 and June 2014, one of which recently received a Notice of Allowance by the U.S. Patent and Trademark Office. Jonathan Page, PhD, co-founder, president and chief scientific officer of Anandia is an inventor on all of the patents licensed to 22nd Century Group. Dr. Page, one of the lead investigators in the first cannabis genome project, assisted in the sequencing of some 30,000 genes that make up the genome of Cannabis sativa. Cannabinoids are a class of diverse naturally-occurring compounds that act on the cannabinoid receptors on human cells. The most notable cannabinoid is the phytocannabinoid (9) -tetrahydrocannabinol (THC), the primary psychoactive compound of cannabis. There are dozens of other cannabinoids in the cannabis plant, including cannabidiol (CBD), cannabigerol (CBG), cannabichromene (CBC), cannabinol (CBN) and tetrahydrocannabivarin (THCV), all of which may have medical applications independently or in combination with other cannabinoids. Joseph Pandolfino, Founder and CEO of 22nd Century Group, stated, "The main reason 22nd Century was attracted to Anandia' s proprietary technology is that it gives us a level of exclusivity in the cannabinoid biosynthetic pathway in cannabis similar to what we have achieved in the nicotinic biosynthetic pathway in tobacco -- exclusive freedom to operate in the entire pathway." Dr. Page explained, "22nd Century's track record in developing complex patent portfolios in the plant biotechnology area is impressive. For an early stage company such as Anandia, 22nd Century Group is an ideal licensing partner." Hemp, a type of cannabis, has been refined into products such as hemp seed for food, hemp oil, wax, resin, rope, cloth, pulp, paper, plastics and biofuels -- most of these for centuries. The fact that commercial hemp varieties, which are the same species as marijuana (Cannabis sativa), contain very low levels of THC, has greatly limited the production of hemp during the modern era in the western world, including the U.S. Over centuries, recreational marijuana was bred for elevated THC levels, but hemp was bred for yield and other characteristics. Hemp was one of man's first agricultural crops, and remained one of the planet's largest crops and most important industrial crops until late in the nineteenth century when many paper and fiber products were produced from hemp. Up until that time, the very low THC levels in hemp were not considered a problem by governments, unlike today. For example, Canada and the European Union only permit cultivation of hemp varieties that contain less than 0.3% THC, which greatly increases the risk to farmers of growing hemp. Hemp based products have various advantages over their counterparts such as strength and durability which are important for recycling. Hemp has the longest fiber out of any of the natural fibers. According to Hemp.com, various car makers are beginning to use hemp bi-products in their cars, including Audi, BMW, Ford, GM, Chrysler, Honda, Mercedes, Porsche and Volkswagen. Michael R. Moynihan, PhD, Vice President of Research and Development of 22nd Century, explains, "The elimination of cannabinoids in hemp is expected to revitalize the hemp industry worldwide." In addition to the license agreement, as part of the transaction, 22nd Century Group acquired a 25% stake in Anandia. 22nd Century Group invested approximately $1,500,000 in cash and restricted stock in this transaction. This investment in Anandia reflects 22nd Century's strategic interest in cannabis, which will be further expanded through collaborative R&D funding of Anandia's Vancouver-based facilities. As reported earlier today by the Company, Crede CG III, Ltd invested $10 million in a 22nd Century Group private placement. For additional information, please visit: www.xxiicentury.com