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Devin LaSarre
$13.9M follower assets
Strategist, designer, investor. Robust brands, regulation, and busted narratives. Valuation matters.
116 following1,168 followers
Altria: The Great Race
“Looking more broadly at the e-vapor category, we continue to believe that the current state of the market is intolerable for both legitimate manufacturers and consumers.” - William Gifford, Altria CEO, Q4 2023 Call

When a CEO boldly describes market conditions as intolerable, one would expect it to be harshly reflected in both broad sentiment as well as reported financials. Altria continues to face a mix of unsavory headwinds led by the rapid proliferation of illicit disposable vaping devices, and to many, the company’s efforts to develop and market its own next-gen products appear underwhelming. The loudest critics continue their narrow fixation on unit volumes, namely of the company’s primary product, cigarettes. This preoccupation avoids addressing fundamentally important considerations, such as the costs to produce and sell products, as well as the prices that can be fetched. Likewise, there remains too little attention provided to the company’s non-cigarette operations. While smaller, they are not trivial, and, as a whole, the company continues to show supernormal profitability.

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Altria: The Great Race
Full-year 2023 note.

$XXII 22nd Century Group: Answering the Wrong Question
“I guess I can go anywhere I want. If only I knew where to go.” - Layne Staley

22nd Century Group, Inc. (Nasdaq: XXII) has previously described itself as a revolutionary company. It was founded in 1998, became publicly traded in 2011, and, at times, has been the primary focus of various groups of excited investors. Too excited. Over the last decade, the company has experienced several meteoric rises in its stock price, largely a function of exuberant storytelling rather than sound fundamentals. Several bouts of excitement have been related to the company’s interests within the cannabis space—a haven for fanciful narratives. But a more recent driving force has been the company’s patented intellectual property related to the cultivation of specialized tobacco, granting it the ability to produce very low nicotine (VLN) cigarettes, with nicotine contents ~95% lower than traditional brands.

In December of 2021, 22nd Century Group received authorization for its novel products through the FDA’s Modified Risk Tobacco Product (MRTP) application process. The MRTP process is far more burdensome than the PMTA process, which is already woefully difficult for novel products to pass through unscathed. Only a few products have successfully gone through the MRTP process, and 22nd Century Group’s authorizations mark the first and only cigarettes to receive such a designation, providing the company with the privilege (and requirement) to display an exact message on the packaging of its cigarettes:


With MRTP designation, the prevailing narrative was that 22nd Century Group was optimally positioned to benefit from future regulatory changes to be pushed forth by the FDA. For years, the administration has slowly worked towards a product standard that would drastically reduce the maximum allowable level of nicotine within cigarettes. It was theorized that if such a standard were enacted, sales of XXII’s cigarettes would balloon, and other companies in the space would have to either buy tobacco directly from XXII or license its intellectual property—an immense windfall for the company. It was further argued that regulatory change barring menthol as a characterizing flavor in cigarettes would be an additional benefit to the company. XXII painted a theoretical scenario in which it receives an exemption for its VLN menthol cigarette, priming it to take over the entire submarket.

The straightforward benefit of VLN cigarettes is that, with a substantially lower level of nicotine, users would smoke less and thus be harmed less. That’s the theory, at least. At the bottom of slide five of XXII’s Q2’23 presentation, there is a quote that reads:

"VLN allows consumers to literally stare smoke in the face and say, “I don’t need you.”"
But if consumers can say “I don’t need you” to smoke, and VLN is a smokeable product, wouldn’t that suggest that consumers don’t need VLN? This hints at where the true problems are.

22nd Century Group has been...

Read the full piece at the link below:
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22nd Century Group: Answering the Wrong Question
The perilous journey of a once-favored story stock.

A Bet on the Future
“One of the most difficult matters in all of controversy is to distinguish disputes about words from disputes about facts.” - Bertrand Russell

The words above, first proclaimed in 1958, were a permanent fixture of my childhood. Pinned up in the kitchen of the house I grew up in, scribbled onto a piece of paper by my father, it is a quote I will never forget. Nor should you.

The trap

Traditional media continues to fall short. Headlines are designed to get clicks, as they should be, but fewer and fewer pieces provide the substantive insights so many of us crave, and the sheer volume of content produced is simply a sign of chasing the flavor of the day, hour, and minute. It is unnourishing, leaves a lingering sour taste, and is exactly what is driving dissatisfied readers toward independent media outlets. But even many of those independents fall into a classic trap—pursuing growth at all costs.

All too many exhaust themselves by setting out at an unsustainable pace. Others, believing they’ve found a cheat code, find that quickly growing an audience comes easy. They keep up with each current event and offer an opinion on everything. Speaking with certainty, no matter the abundance of complexity or absence of expertise, they form incendiary remarks to carelessly lob at the masses. Sparking tribalism, even occasionally setting their own tribes on fire, it is a game of getting eyeballs on themselves and doing whatever it takes to stay in the spotlight. Commit to this, and there is a good chance that you, too, can build a sizable audience. However, this approach is also bound to disappoint. Sizable audiences do not necessarily reflect the truthfulness, accuracy, or usefulness of work. Being quick and loud does not set you apart, and you are bound to become merely another of countless who end up mirroring the incumbent media they detest—and when that hollowness becomes apparent, eventually, you’re just yelling into a void. Without question, it is better to do the opposite.

Doing the opposite

I firmly believe the world needs more writing that embraces full curiosity and skepticism, created by those who favor sensible timeliness over fostering false urgency. This is exactly what I’ve aimed to achieve with Invariant. One piece is published each week, ranging from short musings on history and philosophy to deeply researched analyses. The tone of each may change, but the degree of effort to consistently distill value does not. A growing number of people find such an approach refreshing.

While subscriber growth holds steady, there has been a modest deceleration. I have welcomed this—a development appearing entirely natural, as most of the companies I cover are less favored, perspectives less common, and all framed within a future duration that far exceeds the holding periods of most. Without running any paid advertising, the growth of Invariant has been entirely organic, and with limited reach across social media, said growth, in addition to search, is largely a function of readers sharing my work with others as well as an increasing number of other authors recommending Invariant to their readers. Still, the total reader base has surpassed 5,100. It is still dwarfed by many other independent publications, but, as it was once framed to me, if one were able to fill an auditorium week after week, full of those eager to listen, that would be a remarkable feat. Here we are, and on a weekly basis, Invariant is eagerly read by thousands. Despite spending a good deal of my time collating numbers much larger, that figure is still hard to grasp. I am both grateful and awed.

Much like my investments, I am interested in the truly long-term, and as I shared in Writing for the Long Run, my ultimate goal is to build something that lasts. To achieve this, there are two other metrics I consider most critical:

  • Continuity: An archive of work that exhibits sensibility and authenticity and appropriately reflects an evolving understanding of our endlessly complex world through the lens of finance.

  • Deep Connections: The number of people who engage with the content and connect with me, including private individual investors, analysts, money managers, family offices, retired executives, operators within the industries I cover, and anyone else curious.

I could not be more pleased with how these are developing.

The growing archive provides a clear way to track ideas, research, and analysis throughout time. Beyond useful reference, it ensures honesty—not just to readers, but to myself and my investing process. As for deep connections, there has been a growing number of readers that have reached out, connecting through DM, email, phone, and video call—opportunities I am eager to take. Often discussing company-specific research, these exchanges offer valuable insights and criticisms alike, allowing me to further refine both my investing and writing abilities. This is an integral part of the engine that moves Invariant forward, as evidenced by the virtuous cycle meticulously illustrated below:

The idea that there is an opportunity to turn Invariant into something more significant has been fully validated. I pay to support a number of high-quality independent publications, rooting for their ongoing success, and I would like to join their ranks. After having published all content entirely free for nearly two years, Invariant will be transitioning to a semi-paid publication toward the second half of 2024. Before you get your pitchfork out, there are several things to note:

  • Most new pieces will still be entirely free.

  • Certain future analyses and other select works will be accessible only to paid subscribers.

  • While the exact date for the transition is yet to be determined, anyone pledging a paid subscription prior to the switch will be grandfathered in at a rate of $10/mo or $100/yr.

  • Future paid signups will be at a rate of $12/mo or $120/yr.

The cadence of new releases will stay the same, but the overall resource commitment to the publication will increase. My goal is to earn your continued support through an unwavering commitment to providing thorough research, engaging writing, and unique specificity. This is the route that so many desire and I am thrilled that numerous have already pledged. Here is what a few of them have to say:

If you enjoy reading Invariant and share similar appreciation, I encourage you to consider pledging today. This work is incredibly fulfilling, and the prospect of being able to provide more time and resources to make it even more valuable is beyond exciting. Thank you for helping me reach this pivotal moment. I wish you an exceptional new year and beyond.
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A Bet on the Future
The evolution of media, Invariant, and an outline for the next chapter.

Toxic State: How the FDA is failing America.
“Inside every cynical person, there is a disappointed idealist.” - George Carlin

On September 29, 1982, Mary Kellerman died shortly after taking Tylenol.

She was 12 years old.

That same day, Adam Janus (27) died after taking Tylenol. His brother, Stanley (25), and Stanley’s wife, Theresa (19), later also died after having taken from the same bottle. Over the next several days, this trend continued, with Tylenol-related deaths popping up all around the Chicago Metropolitan area.

Lab tests would expose the presence of cyanide in the tainted bottles, followed by investigators concluding that while the bottles were safely produced, they had likely been tampered with once on store shelves. The manufacturer of Tylenol, Johnson & Johnson, issued warnings to distributors and hospitals and halted all advertising. But copycats began to spring up. Targeting Tylenol and other over-the-counter medications, additional deaths occurred across the United States. This led to a voluntary nationwide Tylenol recall, removing over 31 million bottles from circulation. Johnson & Johnson was largely hailed for its response to the emergency, having been highlighted in articles at the time stating its actions were exactly how big businesses should act during a crisis. Despite the praise, the company ultimately settled multiple lawsuits related to the original Chicago area deaths for an undisclosed sum.

The offender(s) responsible for the original Tylenol murders were never found, and after decades of failed inquiries, the investigation has gone cold.

I have a weird habit of thinking about the Chicago Tylenol murders every time I’m aching and reach into the medicine cabinet for relief. Yet, despite the initial deaths all occurring within a mere hour of where I live and...

Finish reading at the link below:
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Toxic State
How the FDA is failing America.

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