Every year, the good people at the Oxford English Dictionary add a special new word to the English language based on popular usage and cultural significance.
In 2013, that word was “selfie” — which gained rapid popularity thanks to the widespread commercial success of the camera phone, Instagram, and Facebook.
2014’s word of the year, selected earlier this week, is “vape” — in reference to the equally widespread emergence of vaporizers and e-cigarettes for the safe (or safer, I should say) consumption of tobacco.
However, even as this trend continues to redefine smoking, where it can be done, and how it’s viewed, there might be a new and far more scientifically significant trend emerging with regard to the stigmatized act.
Right now, a company based in New York State is raising tobacco cultivation to the status of a biotechnological science.
Instead of turning tobacco into oils or concentrates that can then be heated and inhaled as vapor, this company is altering the actual genetic makeup of tobacco in order to precisely control the levels of nicotine contained in cigarettes.
Making the Best of a Bad Habit
It’s a smart move in terms of commercial niches because as popular as e-cigarettes are, there is little chance, if any, that traditional paper and tobacco cigarettes will ever disappear — especially in foreign markets like the Middle and Far East, where smoking is far more prevalent and far less stigmatized than in the West.
Through genetic engineering, this company has been able to remove up to 95% of the nicotinic alkaloids in tobacco plants without causing any changes to taste or aroma.
This may sound like a counterintuitive innovation for smokers who want nicotine in copious concentrations, but it’s exactly the sort of technology smokers looking to quit can use to safely and effectively step down their consumption rates — the same way they do with patches and nicotine gum.
This not only makes the product commercially viable but also allows some dovetailing with the Family Smoking Prevention and Tobacco Control Act, a federal law passed in 2009 that, among other things, requires the U.S. Food and Drug Administration to evaluate “modified risk” (potentially less-harmful) tobacco products that reduce exposure to harmful substances.
This company owns or exclusively controls more than 100 patents in 78 countries — representing 75% of the world’s smoking market. It has an additional 51 patents pending worldwide.
In China, the world’s single-largest cigarette market, the company owns exclusive rights to six issued patents and three patent applications.
That’s a pretty impressive list of accomplishments for a company that’s only been around since 1998 and that carries a market capitalization of $110 million.
However, tobacco isn’t all it does…
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Yes, It Does Weed, Too
This company is doing similar work with cannabis — specifically, regulating the concentration of tetrahydrocannabinol (THC), the active ingredient in marijuana.
Given the evolving state of marijuana prohibition in the U.S. right now, it’s safe to say that genetically modified cannabis will become a major variable in the years to come — with bigger corporations piling into the sector as laws are gradually relaxed.
The company is called 22nd Century Group, and it trades under the symbol XXII.
Right now is an exciting time for the company, as it’s recently closed a major financing and is in talks to begin marketing its products in Europe after extensive testing both there and in Asia.
Today, the stock trades at $1.80, but bear in mind that the aforementioned financing was closed at a share price of $2.58 — giving the stock strong support at this level and making today’s pricing a very appealing bargain.
The reason for the depressed stock price? Well, major research and development efforts, including testing of its products in multiple markets, contributed to a net loss in 2014. But as the company gets its RED SUN® and MAGIC® brand cigarettes listed on state tobacco directories (a requirement for sale in the U.S.), that will turn around.
As far as small companies go, this one has it all: patents, products, and a highly viable market niche.
Do the research and see for yourself. This one could be big in 2015.
To your wealth,
Brian Hicks
Brian is a founding member and President of Angel Publishing and investment director for the income and dividend newsletter The Wealth Advisory. He writes about general investment strategies for Tech Investing Daily, Wealth Daily and Energy & Capital. Known as the “original bull on America,” Brian is also the author of the 2008 book, Profit from the Peak: The End of Oil and the Greatest Investment Event of the Century. In addition to writing about the economy, investments and politics, Brian is also a frequent guest on CNBC, Bloomberg, Fox and countless radio shows. For more on Brian, take a look at his editor’s page.
