What changed in this filing

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Item 1. Business

2026-03-02 compared with 2025-03-06 · 40 added, 55 removed, 387 unchanged (20% of the section changed)

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(the “Company,” “we,” “our,” or “us”) is a leading manufacturer, marketer and distributor of branded consumer products.

We sell a wide range of products to adult consumers consisting of staple products with our iconic brands Zig-Zag® and Stoker’s® to fulfill evolving consumer preferences.

Among other markets, we compete in the alternative smoking accessories and Other Tobacco Products (“OTP”) industries.

We sell a wide range of products to adult consumers consisting of staple products with our iconic brands Zig-Zag® and Stoker’s®.

We primarily compete in the alternative smoking accessories and Other Tobacco Products (“OTP”) industries, among other markets.

The alternative smoking accessories market is a dynamic market experiencing robust secular growth driven by cannabinoid legalization in the U.S.

and Canada, and positively evolving consumer perception and acceptance in North America.

The OTP industry, which consists of non-cigarette tobacco products, exhibited low-single-digit consumer unit annualized declines during the full year period ended 2024 as reported by Management Science Associates, Inc.

The OTP industry, which consists of non-cigarette tobacco products, exhibited steady consumer unit annualized volumes during the full year period ended 2025 as reported by Management Science Associates, Inc.

(“MSAi”) a third-party analytics and information company.

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Zig-Zag® in the Zig-Zag products segment, and Stoker’s® along with FRE®, Beech-Nut® and Trophy® in the Stoker’s products segment.

Our businesses generate solid cash flow which we use to invest in our business, finance acquisitions, increase brand support, expand our distribution infrastructure, and strengthen our capital position.

Our businesses generate meaningful cash flow which we use to further invest in our business, introduce new product lines, finance acquisitions, increase brand support, expand our distribution infrastructure, and strengthen our capital position.

We currently ship to approximately 900 distributors with an additional 600 secondary, indirect wholesalers in the U.S.

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Under the leadership of a senior management team with extensive experience in the consumer products, alternative smoking accessories and tobacco industries, we have grown and diversified our business through new product launches, category expansions, and acquisitions while concurrently improving operational efficiency.

We believe there are meaningful opportunities to grow through investing in organic growth, acquisitions and joint ventures across all product categories.

As of December 31, 2024, our products were available in approximately 200,000 U.S.

retail locations which, with the addition of retail stores in Canada, brings our total North American retail presence to an estimated 220,000 points of distribution.

We believe there are meaningful opportunities to grow by investing in organic growth, acquisitions and joint ventures across all product categories.

As of December 31, 2025, our products were available in approximately 220,000 retail locations in North America.

Our sales team targets widespread distribution to all traditional retail channels, including convenience stores, and we have a growing e-commerce business.

Discontinued Operations

On January 2, 2025, the Company contributed 100% of its interest in South Beach Brands LLC (“SBB”), the subsidiary that owned and operated the Company’s Creative Distribution Solutions (“CDS”) reportable segment, to General Wireless Operations, Inc.

On January 2, 2025, the Company contributed 100% of its interest in South Beach Brands LLC (“SBB”), the subsidiary that owned and operated the Company’s former Creative Distribution Solutions (“CDS”) reportable segment, to General Wireless Operations, Inc.

(“GWO”) in exchange for 49% of the issued and outstanding GWO common stock.

GWO is a joint venture between the Company and Standard General, LP entered into in December 2018.

CDS markets and distributes liquid nicotine and ancillary products without tobacco and/or nicotine primarily through non-traditional retail and B2C online platforms, and includes widely recognized names such as Vapor Beast® and VaporFi®

The assets and liabilities associated with the CDS segment have been classified as held for sale as of December 31, 2024 and its financial results are classified as discontinued operations and reported separately for all periods presented herein.

With the classification of the CDS reportable segment to discontinued operations, the Company now has two reportable segments, which are reflected herein.

GWO is majority owned by Standard General, LP.

The assets and liabilities associated with the CDS segment were classified as held for sale as of December 31, 2024, and its financial results were classified as discontinued operations and are reported separately for all periods presented herein until its disposition on January 2, 2025.

With the classification of the CDS reportable segment to discontinued operations, the Company now has two reportable segments.

Unless otherwise noted, the description of business in this Annual Report on Form 10-K relates solely to the continuing operations, comprised of the Zig-Zag and Stoker’s segments.

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and (iii) other accessories.

In addition, we have a majority stake in Turning Point Brands Canada Inc.

In addition, we have a majority stake in 10233625 Canada Corp.

("Turning Point Brands Canada"), a specialty marketing and distribution firm focused on building brands in the Canadian cannabis accessories, tobacco and alternative products categories.

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with approximately 33% total market share according to MSAi.

1 Management estimates that Zig-Zag ® is also the #1 brand in the promising Canadian market.

1 Management estimates that Zig-Zag ® is also the #1 brand in the Canadian market.

Rolling paper operations are aided by our sourcing relationship with Republic Technology International SAS (“RTI”).

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In June 2020, we purchased certain assets from our long-term commercial partner Durfort Holdings S.R.L (‘‘Durfort’’) which included the co-ownership in the intellectual property rights for all of our MYO Homogenized Tobacco Leaf (“HTL”) cigar wraps products.

In connection with the transaction, we entered into an exclusive Master Distribution Agreement to market and sell the original Blunt Wrap ® cigar wraps within the U.S.

which was effective October 9, 2020.

In late 2021, we extended our MYO cigar wraps offering with entries into the growing hemp wraps and natural leaf wraps markets.

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In the acquisition, we acquired a robust portfolio of cigarillo products and all related intellectual property, including Cigarillo Non-Tip (NT) HTL products and Rolled Leaf and Natural Leaf Cigarillo products that we are using to re-introduce the Zig-Zag ® brand into a large and growing cigarillo market.

We have continued to reposition the business with growth initiatives focused on new product introductions and new channel expansions that are better aligned with the growing market trends.

As a result of those initiatives, we have been successful in changing the growth profile of our Zig-Zag Products segment.

We have continued to reposition this segment with growth initiatives focused on new product introductions and new channel expansions that are better aligned with the growing market trends.

Stoker ’ s Products

In our Stoker’s products (“Stoker’s”) segment, we (i) manufacture and market moist snuff tobacco (“MST”), (ii) contract for and market FRE ® , our modern oral product and (iii) contract for and market loose-leaf chewing tobacco products.

In our Stoker’s products (“Stoker’s”) segment, we (i) manufacture and market moist snuff tobacco (“MST”), (ii) contract for and market FRE ® and ALP ® , our modern oral products, and (iii) contract for and market loose-leaf chewing tobacco products.

Stoker ’ s ® is our focus brand in both MST and chewing tobacco.

In MST, Stoker ’ s ® remains among the fastest growing brands and holds a 11.2% share in the stores with distribution and a 7.4% share of the total U.S.

In MST, Stoker ’ s ® remains among the fastest growing brands and holds a 12.4% share in the stores that carry our products and a 8.1% share of the total U.S.

MST non-pouch market.

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1 Our chewing tobacco operations are facilitated through our long-standing relationship with Swedish Match (a division of Philip Morris International Inc.), the manufacturer of our loose-leaf chewing tobaccos.

In 2023, the Company expanded its rollout of modern oral nicotine products with FRE ® white nicotine pouches.

Modern oral nicotine products are currently one of the fastest growing categories within the nicotine space.

In September 2024, one of the Company's wholly-owned subsidiaries acquired a 50% stake in ALP Supply Co., LLC (“ALP”).

ALP is a joint venture established with Last Country Ventures, LLC for the purpose of selling and distributing tobacco-free white pouch nicotine products in 3, 6 and 9 mg strengths.

In 2026, ALP intends to broaden its portfolio, including with the introduction of 12 mg strength.

Pursuant to the joint venture agreement, the Company's subsidiary is responsible for selling products to ALP and providing warehousing and shipping services on its behalf.

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The legal cannabis market in the U.S.

is projected to grow from approximately $32 billion in 2024 to approximately $46 billion by 2028 according to a June 2024 report of BDSA, a market research firm focused on the legal cannabis market.

is projected to grow from approximately $30 billion in 2024 to approximately $39 billion by 2029 according to an October 2025 report of BDSA, a market research firm focused on the legal cannabis market.

With flower being the leading form factor for cannabis consumption among consumers, we believe our product offerings provide us with significant opportunity to expand the number of retail channels we reach.

A recent Gallup poll showed nearly seven in ten Americans now support legalizing cannabis nationwide, approximately twice the amount as twenty years ago.

A recent Gallup poll showed 64% Americans now support legalizing cannabis nationwide, approximately twice the amount as twenty years ago.

As of the end of 2025, 24 U.S.

states and the District of Columbia had legalized cannabis for adult recreational use and a majority of states now have comprehensive public medical cannabis programs.

states and the District of Columbia had legalized cannabis for adult recreational use and a vast majority of states now have comprehensive public medical cannabis programs.

In addition, a growing number of U.S.

states and foreign jurisdictions have authorized the sale of hemp-derived THC products, further broadening consumer access to intoxicating cannabinoid products outside of the traditional state-licensed cannabis channels.

Successful Track Record of New Product Launches and Category Expansions

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In late 2023, we expanded our oral nicotine offering to include FRE ® , a white pouch nicotine product, with a national rollout started in 2024 during which we expanded SKU assortments to include additional nicotine strengths.

In late 2024, we entered into a joint venture with ALP, which launched an ALP white pouch nicotine product.

We have also had success in acquiring, partnering with and integrating new products and product lines, including Cigarillos, with the acquisition of Unitabac.

In late 2024, we entered into a joint venture, which launched the ALP white pouch nicotine products.

We have also had success in acquiring, partnering with and integrating new products and product lines, including Cigarillos, with the acquisition of Unitabac in 2021.

We strategically target product categories that we believe demonstrate significant growth potential and for which the value of our brands is likely to have a meaningful impact.

We believe that our track record and existing portfolio of brands provide growth advantages as we continue to evaluate opportunities to extend our product lines and expand into new categories.

We believe that our track record and existing portfolio of brands provide competitive advantages as we continue to evaluate opportunities to extend our product lines and expand into new categories.

Extensive Distribution Network and Data Driven Sales Organization

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Our supplier relationships allow us to increase the breadth of our product offerings and quickly enter new markets as management is able to focus on brand building and innovation.

In 2024, approximately 75% of our net sales were derived from outsourced production operations and our capital expenditures have ranged between $4.7 million and $7.7 million per year over the previous five years.

In 2025, approximately 75% of our net sales were derived from outsourced production operations and our capital expenditures have ranged between $4.6 million and $13.5 million per year over the previous three years.

The stability of our cash flows is enhanced by the resilience of our Zig-Zag Products and Stoker’s Products business segments which we believe have recession-resistant end-markets.

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Within our Zig-Zag products segment, we are benefitting from secular growth trends in the industry, driving market share gains in our traditional convenience store channel and expanding our presence into non-traditional channels including headshops, dispensaries and e-commerce.

Within our Stoker’s products segment, there is ample runway to gain market share driven by same store sales growth and further distribution gains as Stoker ’ s ® MST continues to be one of the fastest growing brands in the category.

Within our Stoker’s products segment, there is ample runway to gain market share driven by same store sales growth and further distribution gains as Stoker ’ s ® MST continues to outperform in the category.

In 2025, less than 10% of our revenues were generated outside of the U.S.

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Having established a strong infrastructure and negotiated relationships across multiple segments and products, we are pursuing an international growth strategy to broaden sales and strengthen margins.

We further invested in growth in Canada in 2021 by increasing our ownership in Turning Point Brands Canada to 65%.

Our goals include expanding our presence in the worldwide OTP industry on a targeted basis.

For example, we are expanding Zig-Zag ® ’s retail penetration and product assortment in Canada and selling our Stoker ’ s ® MST products in South America, Europe, Asia and Africa.

Expand into Adjacent Categories through Innovation and New Partnerships

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In 2020, we acquired certain assets from Durfort, including co-ownership of the intellectual property rights for our MYO cigar wraps products.

The transaction increased our share of the economics in a MYO cigar wraps business that was benefitting from secular growth tailwinds and gave us access to a complimentary product in Blunt Wrap ® through an exclusive distribution agreement.

Our investment in 2021 in Old Pal Holding Company, LLC (“Old Pal”) gives us increased exposure to the large and growing cannabinoid market.

In 2021, we also acquired certain assets from Unitabac, providing a platform to re-enter the large and growing cigarillo category.

The transaction increased our share of the economics in a MYO cigar wraps business that was benefitting from secular growth tailwinds.

In 2021, we also acquired certain assets from Unitabac, providing a platform to re-enter the large cigarillo category.

Raw Materials, Product Supply, and Inventory Management

We source our products through a series of longstanding, highly valued relationships which allow us to conduct our business on an asset-light, distribution-focused basis.

The components of inventories were as follows (in thousands):

The components of inventories were as follows as of the dates indicated (in thousands):

Raw materials and work in process

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We utilize recognized suppliers that generally maintain 12- to 24-month supplies of our various types of tobacco at their facilities.

We do not believe we are dependent on any single country or supplier source for tobacco.

We do not believe we are dependent on any single country or supplier source for tobacco and, if needed, there are dependable alternative supply opportunities as noted below.

We generally maintain up to a two-month supply of finished, moist snuff and loose-leaf chewing tobacco on hand.

This supply is maintained at our Louisville, Kentucky, facility and in two regional public warehouses to facilitate distribution.

In December 2023, a third-party warehouse that stores our tobacco was damaged by a tornado, leading to a loss of some of our leaf tobacco inventory.

We believe the losses will be fully covered by insurance and, in light of alternative supply opportunities and our distribution schedule, the loss of the tobacco has not impacted our ability to meet the demand for our products.

In December 2023, a third-party warehouse used by the company was damaged by a tornado, leading to a loss of some of our leaf tobacco inventory.

We believe the losses will be fully covered by insurance.

“Risk Factors – Our business may be damaged by events outside of our or our suppliers’ control, such as the impact of epidemics or pandemics, political upheavals, or natural disasters.”

We also utilize a variety of suppliers for the sourcing of additives used in our smokeless products and for the supply of our packaging materials.

Thus, we believe we are not dependent on a single supplier for these products.

There are no current U.S.

federal regulations that restrict tobacco flavor additives in smokeless products.

The additives that we use are food-grade, generally accepted ingredients.

All of our moist snuff products are manufactured at our facility in Dresden, Tennessee.

Packaging occurs at the Dresden, Tennessee, location in addition to the facility in Louisville, Kentucky.

All of our loose-leaf chewing tobacco production is fulfilled through our agreement with Swedish Match.

See “Distribution and Supply Agreements” below for our discussion of the Swedish Match Manufacturing Agreement.

Distribution and Supply Agreements

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To date, we have neither relied upon, nor conducted, any substantial advertising in consumer media for our tobacco products.

For the year ended December 31, 2024, we had one customer that accounted for 10.2% of our net sales.

We did not have any customer that accounted for 10% or more of our net sales for the years ended December 31, 2023 or 2022.

For the year ended December 31, 2025, we did not have any customers that accounted for 10% or more of our net sales for the year.

We had one customer that accounted for 10.2% of our net sales for the year ended December 31, 2024, and did not have any customers that accounted for 10% or more of our net sales for the year ended December 31, 2023.

Our customers use an open purchase order system to buy our products and are not obligated to do so pursuant to ongoing contractual obligations.

We perform periodic credit evaluations of our customers and generally do not require collateral on trade receivables.

Historically, we have not experienced material credit losses.

Many of our competitors are better capitalized than we are and have greater resources, financial and otherwise.

Historically, we have not experienced material credit losses, and we do not believe it is a material risk given the short duration of payment cycles.

We believe our ability to effectively compete and maintain strong market positions in our principal product lines are due to the high recognition of our brand names, the perceived quality of each of our products, and the efforts of our sales, marketing, and distribution teams.

Many of our competitors are better capitalized than we are and have greater resources, financial and otherwise.

We compete against “big tobacco,” including Altria Group, Inc.;

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We own the Zig-Zag ® trademark with respect to its use in connection with products made with tobacco including, without limitation, cigarettes, cigars and MYO cigar wraps in the U.S.

See "--The Zig-Zag Distribution and License Agreements" above.

Research and Development and Quality Assurance

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We provide technical and leadership training to employees at both the officer and non-officer levels.

In 2025, the Company will be launching a Training and Development program, which will consist of online and in person training and development tools used by management and employees.

In 2025, the Company launched a Training and Development program, which consists of online and in person training and development tools used by management and employees.

We believe effective training and development for our employees is essential to maintain the strength and profitability of the Company, generally, and each brand, specifically.

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Retaining Talent:

During the year ended December 31, 2024, our employee voluntary turnover rate was 16.6%.

During the year ended December 31, 2025, our employee voluntary turnover rate was 13.3%, compared to 16.6% in 2024.

To retain our employees, we believe it is critical to continually focus on ensuring employees are highly engaged and feel valued.

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All of our adult-use products are intended to be sold to and used by adults 21 years of age and older, and we are proactive in implementing programs to prevent youth access.

For our own online retail (B2C) sales, we display our policies related to age to purchase, battery safety, and shipping restrictions.

For our own online retail (B2C) sales, we display our policies related to age to purchase and shipping restrictions.

Additionally, we verify B2B customers using business licenses in order to further prevent bulk sales to consumers, which we believe contributes to social sourcing by youth.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business