With several states moving legislation to legalize marijuana, the companies working in the field of medical and industrial hemp are likely to receive a bump in interest and business in the coming months.
These developments along with shifting sentiment towards marijuana could result in the medical or recreational marijuana industry growing to $21 billion by 2020, according to New Frontier Data.
Among various companies carrying out research activities in the area, 22nd Century Group Inc. (NYSE MKT:XXII) with its vast experience and strong network holds a strong position.
The company announced this morning a new collaboration with the University of Virginia. The collaboration involves a sponsored research agreement as well as an exclusive licensing deal with the University of Virginia Patent Foundation d/b/a University of Virginia Licensing & Ventures Group ("UVA LVG"). The company plans to spend nearly $1.1 million on this project.
22nd Century Group elaborated that the main aim of the collaboration is to create unique industrial hemp plants with guaranteed levels of THC below the legal limits. Keeping the THC below the legal limits will help eliminating the risk to growers of having to destroy non-conforming hemp crops.
The collaboration also aims to optimize other desirable hemp plant characteristics for improving the plant’s suitability for growing in Virginia and in similar legacy tobacco regions. Both parties will also work towards exploiting 22nd Century Group’s unique hemp plants for extracting medically important cannabinoids.
22nd Century Group is at the forefront of the medical hemp field. With this new agreement, the company will no longer have to depend solely on hemp plants imported from Canada or Europe. Each of these regions had their shortcomings, which made the process of research and development all the more difficult.
The company has been able to forge agreements with growers and legal owners of hemp plants in the US. This helps 22nd Century Group in bypassing the usual onerous terms and conditions forced by European exporters.
The company had announced its third quarter results recently. Apart from hemp, 22nd Century Group also holds interest in tobacco as well. The company carries out R&D activities for developing modified tobacco products and plants.
22nd Century Group has a solid portfolio of products including MAGIC and RED SUN cigarettes and X-22, a smoking cessation aid. The company is also carrying out a study for reducing the nicotine content in cigarettes.
While shares of XXII have declined over 26% this year, the share price has picked up during the latter half of the year. In the past six months, the stock rallied 20%, reversing the downward trend as the marijuana sector continues to expand in the U.S.
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