XXII customers relationship map

XXII: Commercial footprint and customer map that will drive the next inflection

22nd Century Group (XXII) commercializes its proprietary low‑nicotine VLN® tobacco products through a mix of direct branded sales, licensing partnerships, and contract manufacturing for third‑party brands, monetizing via product sales, licensing and private‑label manufacturing fees. The company also executes a parallel strategy of selective divestiture in its hemp/cannabis franchise to sharpen focus and shore up liquidity. For investors, the revenue profile today is concentrated, U.S.‑centric, and distribution‑led, with near‑term upside tied to retail rollout velocity and partner execution. Learn more at https://nullexposure.com/.

How 22nd Century actually makes money — the operating model in plain English

22nd Century sells VLN® as a consumer tobacco product while also acting as a contract manufacturer and licensor to other cigarette brands. The company’s commercial revenues come from:

Branded product sales under 22nd Century VLN®, Pinnacle VLN® and Smoker Friendly VLN® presentations sold through convenience retail channels.
Licensing and manufacturing agreements with independent retailers and tobacco brands who put VLN® into their own branded packaging.
Private‑label and contract manufacturing services for established tobacco brands, which generate recurring manufacturing revenue.

These choices reveal an operating posture that is distribution‑first and manufacturing‑capable: the company emphasizes convenience‑store distribution, provides turnkey manufacturing for other brands, and records long‑duration performance obligations in some CMO contracts. According to the FY2024 10‑K, substantially all third‑party product sales are shipped to customers in the United States, and the convenience store segment is the initial commercial focus.

Commercial relationships: who matters today (one‑line summaries and sources)

Below I list every customer/partner recorded in company disclosures and public coverage, with a concise plain‑English takeaway and the source.

Circle K — 22nd Century’s VLN brand launched at Circle K in Illinois with an initial rollout of roughly 140 stores, establishing an in‑market convenience retail presence for the 22nd Century VLN product line. Reported in the company’s 2025 Q3 earnings remarks and corroborated by Oct 29, 2025 press coverage.
Source: 2025 Q3 earnings call and market reporting on Oct 29, 2025 (StockstoTrade/earnings call).
ATDDF — Some market writeups referenced ATDDF in connection with the Circle K rollout; this reflects how outlets reported the Circle K retail placement of VLN rather than a separate commercial partner.
Source: Oct 29, 2025 press coverage listing the Circle K launch under an alternate reference (StockstoTrade).
Murphy USA (MUSA) — Pinnacle VLN® was placed in 1,361 Murphy USA stores across 20 states, providing broad convenience‑store exposure for the Pinnacle brand presentation. This is a material staged rollout across a national convenience chain.
Source: 2025 Q3 earnings call disclosures.
Smoker Friendly — 22nd Century executed a license and manufacturing agreement with Smoker Friendly, and public comments highlight stocking orders and multi‑state availability under the Smoker Friendly VLN® label. That partnership supports national convenience coverage and contributes to multi‑brand retail distribution.
Source: Company shareholder letter coverage and multiple news releases including Tobacco Reporter (Aug 2025) and press summaries (March–May 2026).
Pinnacle (PBNK) — Pinnacle VLN® delivered first shipments into a top‑5 convenience chain across 12 states with an initial staged rollout to approximately 1,000 stores, underscoring the partner branding route to scale.
Source: Q3 results and press reporting summarizing initial shipments (Yahoo Finance / March 2026).
Specialty Acquisition Corporation — 22nd Century secured senior lender consent for the sale of its GVB Biopharma hemp/cannabis operations to Specialty Acquisition Corporation, an affiliate of current GVB employees, reflecting a strategic divestiture of non‑core assets.
Source: Company press release and NewsfileCorp coverage (May 4, 2026).
Customer A — Identified in the FY2024 10‑K as representing 46.11% of disaggregated product line net revenues for the year ended December 31, 2024, up from 31.49% the prior year, indicating a single large customer concentration.
Source: FY2024 Form 10‑K customer concentration table.
Customer B — Listed in the FY2024 10‑K as representing 16.45% of net revenues in 2024 (21.70% in 2023), a meaningful secondary revenue source.
Source: FY2024 Form 10‑K customer concentration table.
Customer C — Reported in the FY2024 10‑K as 14.00% of net revenues in 2024 (8.59% in 2023), showing a growing mid‑tier customer contributor.
Source: FY2024 Form 10‑K customer concentration table.

What these relationships imply about concentration, contract tenure and geographic risk

The disclosed customer mix and company commentary create a clear set of signals for investors and operators:

Revenue concentration is high. Customer A accounted for 46% of 2024 product line revenues, a single large counterparty that creates downside sensitivity if the relationship changes. This is a company‑level signal from the FY2024 10‑K.
Contracting posture includes long‑term manufacturing commitments. The 10‑K references CMO contracts where performance is satisfied over time because the company cannot easily redeploy manufactured product and has enforceable rights to payment — a signal that some manufacturing revenues are governed by multi‑period obligations and provide recurring cash flow when active.
Distribution is the execution lever. Public comments and rollout metrics emphasize convenience‑store coverage (Circle K, Murphy USA, Smoker Friendly, Pinnacle). The company’s growth trajectory is therefore execution and distribution‑dependent: national retailer listings translate directly to sell‑through and revenue scale.
Geographic exposure is U.S.‑centric. Management notes that substantially all third‑party sales ship to U.S. customers and the store program has been expanded state by state; this concentrates regulatory, retail and consumer risk in North America.
Manufacturing capability is a strategic asset and a dependency. XXII operates as a service provider for other brands, creating revenue diversification but also operational dependency on plant efficiency and CMO contract fulfillment.

Risks and upside — what investors should watch

Key considerations to monitor over the next 12–24 months:

Retail rollout pace and sell‑through at Circle K, Murphy USA, Smoker Friendly and Pinnacle will determine whether initial distribution turns into sustainable revenue growth. Early sell‑through reports have been encouraging in press summaries from March–May 2026.
Customer concentration risk because one unnamed customer represented nearly half of product line revenues in 2024; any change in that relationship materially impacts headline results.
Execution on manufacturing and supply chain given the company’s role as a contract manufacturer and the presence of long‑term performance obligations in some CMO contracts.
Strategic focus after divestiture: consenting the sale of GVB Biopharma to Specialty Acquisition Corporation removes a non‑core asset and clarifies capital allocation.

A short list of practical signals for investors:

Rising store counts across national convenience chains and improved sell‑through metrics are positive lead indicators.
Any public change to the status of Customer A should be treated as material to near‑term revenue visibility.

Bottom line: disciplined exposure to a distribution‑driven roll‑out

22nd Century’s commercial model is a hybrid of branded product sales, licensing and contract manufacturing, concentrated in U.S. convenience retail and supported by a small set of large partners. That model creates clear upside from successful retail scale‑up but also concentration and execution risk tied to major customers and manufacturing delivery. For investors allocating to the tobacco transformation theme, XXII offers a high‑conviction exposure to the regulated reduced‑nicotine market; track retail placements, customer concentration disclosures, and the company’s progress converting listings into steady sell‑through.

For more granular signals on customer rollouts and partnership milestones, visit https://nullexposure.com/ for ongoing coverage and relationship tracking.