4 Stocks To Watch Following The FDA's Proposal To Lower Nicotine In Cigarettes

What Happened

The U.S. Food and Drug Administration announced March 15 an Advance Notice of Proposed Rulemaking (ANPRM) to procure information to help set the maximum nicotine level for cigarettes to non-addictive levels.

22nd Century Group Inc XXII, Philip Morris International Inc. PM, Altria Group Inc MO and British American Tobacco PLC (ADR) BTI all traded lower following the announcement.

Why It’s Important

The reduction of nicotine to non-addictive levels is meant to cut smoking frequency in the U.S.

“This could give addicted users the choice and ability to quit more easily, and it could help to prevent experimenters (mainly youth) from initiating regular use and becoming regular smokers,” according to the notice.

Cigarette manufacturers are expected to suffer sales reductions as the FDA pursues its goal.

What’s Next

The FDA will accept relevant scientific data and research as well as comments regarding the scope of products regulated under the new standards in the ANPRM. All comments are due June 14.

"With ownership or control of patents on the genes in the tobacco plant that regulate nicotine production, 22nd Century is able to grow tobacco with up to 97% less nicotine than tobacco used in conventional cigarettes," the company said in a Monday press release.

22nd Century was the only one of the aforementioned stocks to trade in positive territory Monday morning at time of publication.

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