Crede Dismisses Claims in Lawsuit Against 22nd Century

CLARENCE, N.Y.–(BUSINESS WIRE)– 22nd Century Group, Inc. (NYSE MKT: XXII),
a plant biotechnology company that is a leader in tobacco harm
reduction, announced today that Crede CG III, Ltd. has dismissed claims
against the Company in the on-going litigation related to a terminated
China joint venture. Crede filed the lawsuit in the wake of the
Company’s decision to terminate a failed China joint venture arrangement
with Crede and its principal, Terren Peizer, due to non-performance and
other breaches by Crede and its principals in their failure to perform
under the joint venture agreements and impeding the Company’s efforts to
expand into China.

As the Company previously announced, on January 20, 2017, the United
States District Court for the Southern District of New York (the “SDNY
Court”) granted the Company’s request to sever the Crede lawsuit into
two separate cases and transfer the claims relating to the now
terminated China joint venture to the United States District Court for
the Western District of New York (the “WDNY Court”), where 22nd
Century’s headquarters office is located. At the same time, the Crede
claims relating to the now void exchange feature of the Tranche 1-A
warrant previously issued to Crede under a financing agreement remained
in the SDNY Court according to the jurisdictional provisions of that
warrant. As previously reported, the SDNY Court held on June 14, 2016
that Crede had not demonstrated a reasonable likelihood that it would
prevail on its claims, and that there was likelihood that Crede violated
the activity restrictions of the Tranche 1-A warrant, which should bar
Crede’s claim for such shares from the Company.

On February 14, 2017, Crede dismissed its lawsuit against the Company in
the WDNY Court, determining not to pursue its claims against the Company
related to the failed China joint venture; thus dismissing claims
alleging damages in excess of $500 million. The Company plans to
continue its efforts to conduct business in China without Crede and
Peizer.

On February 21, 2017, the SDNY Court granted the Company’s request to
file a motion for summary judgment in the case, with all discovery in
the case being deferred until after the SDNY Court conducts a hearing
and issues its decision on the upcoming summary judgment motion to be
filed by 22nd Century. The Company intends to continue to vigorously
defend itself in this remaining case and is confident that it will
prevail against Crede.

“From the beginning, the Company has known that Crede’s lawsuit was
frivolous and completely without merit,” explained a 22nd Century
spokesman. “We are pleased that Crede has now recognized this fact and
has dismissed the claims that were transferred to the WDNY Court. We
look forward to the prompt and successful resolution of the remaining
portion of the case in the SDNY Court.”

About 22nd Century Group, Inc.

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 cannabis plants through genetic
engineering and plant breeding. The Company’s primary mission is to
reduce the harm caused by smoking. 22nd Century currently owns or
exclusively controls more than 200 issued patents and more than 50
pending patent applications around the world. Visit www.xxiicentury.com
for more information.

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occurrence of unanticipated events. You should carefully review and
consider the various disclosures made by us in our annual report on Form
10-K for the fiscal year ended December 31, 2015, filed on February 18,
2016, including the section entitled “Risk Factors,” and our other
reports filed with the U.S. Securities and Exchange Commission which
attempt to advise interested parties of the risks and factors that may
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materially from those expected or projected.

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