As the cannabis stock craze continues to ramp higher, 22nd Century Group Inc (NYSEAMERICAN:XXII) shares have started to see some new and significant flows. The stock has traded above its major moving averages and now stands at the precipice of a technical confrontation with major resistance at the $3/share level.

As far as recent catalysts, the company just announced that the Journal of the American Medical Association (JAMA) published results of a greatly anticipated independent clinical study investigating the effects of an immediate reduction in nicotine content of cigarettes versus a gradual reduction in nicotine content of cigarettes. According to the release, “Dr. Dorothy Hatsukami and other highly respected scientists used exclusively 22nd Century’s SPECTRUM research cigarettes to conduct this study.”

22nd Century Group Inc (NYSEAMERICAN:XXII) trumpets itself as a plant biotechnology company that provides technology that allows increasing or decreasing the level of nicotine and other nicotinic alkaloids in tobacco plants, and cannabinoids in hemp/cannabis plants through genetic engineering and plant breeding.

It offers premium cigarettes under the RED SUN and MAGIC brands; and SPECTRUM, a line of research cigarettes for use in independent clinical studies.

The company’s products under development include BRAND A, a very low nicotine cigarette; X-22, a tobacco-based botanical medical product for use as an aid to smoking cessation; and BRAND B, a low-tar-to-nicotine ratio cigarette. In addition, it engages in contract manufacturing business for third-party branded tobacco products.

The company has scientific collaborations with the University of Virginia and Anandia Laboratories, Inc. to develop proprietary hemp strains with less than 0.3% dry weight content of delta-9-tetrahydrocannabinol.

22nd Century Group, Inc. was founded in 1998 and is headquartered in Williamsville, New York.

According to company materials, “22nd Century is a plant biotechnology company focused on technology which allows it to increase or decrease the level of nicotine in tobacco plants and the level of cannabinoids in hemp/cannabis plants through genetic engineering and plant breeding. The Company’s primary mission in tobacco is to reduce the harm caused by smoking. The Company’s primary mission in hemp/cannabis is to develop proprietary hemp strains for important new medicines and agricultural crops.”

Finding some Legs

As noted above, shares of XXII have been homing in on key resistance with some strong sector tailwinds in place. In all, we’ve witnessed 18% tacked on to share pricing for the stock in the past month. Moreover, the stock has witnessed a pop in interest, as transaction volume levels have recently pushed 14% beyond what we have been seeing over the larger time frame.

“The results of this large, independent clinical study significantly add to the already extensive array of published clinical studies that have been conducted with 22nd Century’s VLNC cigarettes,” explained Juan Sanchez Tamurrino, Vice President of Research and Development at 22nd Century.

“The results of Dr. Hatsukami’s study will serve to strengthen further the case for VLNC cigarettes to benefit public health even as 22nd Century finalizes the Company’s revised Modified Risk Tobacco Product (MRTP) application for our BRAND A Very Low Nicotine cigarettes that will be submitted to the FDA before the end of this year.”

Now commanding a market cap of $349.49M, XXII has a significant war chest ($53.5M) of cash on the books, which is balanced by about $5.8M in total current liabilities. One should also note that debt has been growing over recent quarters. XXII is pulling in trailing 12-month revenues of $23.5M. In addition, the company is seeing major top-line growth, with y/y quarterly revenues growing at 77.4%.

As more color becomes clear on the name, we will review the situation and update our take.