Tag: Turning Point Brands

TPB’s Marketing Denial Order Rescinded

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The U.S. Food and Drug Administration has rescinded the marketing denial order (MDO) it issued for some Turning Point Brands (TPB) e-liquids. The products that had been denied are now back under review.
In a letter addressed to TPB’s senior vice president of external affairs, Brittani Cushman, the FDA said it had found relevant information that was not properly assessed.
“Specifically, your applications did contain randomized controlled trials comparing tobacco-flavored ENDS to flavored ENDS as well as several cross-sectional surveys evaluating patterns of use, likelihood of use and perceptions in current smokers, current ENDS users, former tobacco users and never users, which require further review,” wrote Matthew Holman, the director of the Office of Science at the FDA’s Center for Tobacco Products.
The agency indicated that it would not initiate enforcement action against the TPB products under review.
The move comes after TPB challenged the MDOs in court. TPB has now withdrawn its appeal.
“We are encouraged by the FDA’s decision to reconsider our product applications and look forward to engaging the agency as our PMTAs are reviewed,” said TPB President and CEO Larry Wexler in a statement. “It is important that the PMTA process is transparent, purposeful and evidence-based. Our organization dedicated significant time and resources in filing our applications in accordance with agency guidance.
“We remain hopeful that the depth and range of our studies and data will persuade the FDA that the continued marketing of our vapor products is appropriate for the protection of the public health and that the agency will ultimately preserve a diverse vapor market for the more than 30 million American adult smokers who may wish to transition from combustible cigarettes to lower risk alternatives.”
Industry representatives suggest the clerical error is a result of the rush with which the FDA was forced to decide on premarket tobacco product applications. The Sept. 9 deadline was ordered by a court in response to litigation by anti-vaping groups, including the Campaign for Tobacco-Free Kids.
The MDO withdrawal has left some speculating as to whether the rejected applications of other companies would also receive a second look. Several companies, including Triton and Bidi Vapor, are currently awaiting court decisions on their MDO challenges.
October 9, 2021
First Lawsuits Filed Over Marketing Denials

Turning Point Brands has challenged the Food and Drug Administration’s orders that denied some of the company’s products access to the U.S. market. The company first filed a petition for review with the U.S. Court of Appeals for the Sixth Circuit. TPB then filed an emergency motion to stay the FDA’s order to remove TPB’s products from the market.
TPB is asking the court to review the FDA order “on the grounds that it is arbitrary and capricious, an abuse of discretion, contrary to the Federal Food, Drug and Cosmetic Act, as amended by the Family Smoking Prevention and Tobacco Control Act of 2009, and otherwise not in accordance with law.” The company requests the court “vacate or modify” the FDA order and asks that TPB be allowed to “continue to market the products subject to the challenged order.”
TPB accuses the FDA of moving the goalposts for data needed to receive a marketing order based on what the agency “learned” from the “review [of] PMTAs for flavored ENDS so far,” according to the stay. TPB noted that the “North Star of administrative law” is that agencies cannot induce regulated parties to rely on “agency representations about regulatory requirements,” then penalize them using the previously unannounced criteria after the fact.
“But that is precisely what FDA did here,” the stay motion states. “[The] FDA reasoned that TPB failed to conduct ‘a randomized controlled trial and/or longitudinal cohort study’ or other studies performed ‘over time’ to show that TPB’s specific flavored products help adult users stop smoking more than tobacco-flavored products do. Yet FDA previously deemed these studies unnecessary.”
Bidi Vapor and at least one other company have reportedly filed similar suits.
October 4, 2021
Marketing Denial Order for Turning Point Brands

Turning Point Brands (TPB) received a marketing denial order (MDO) from the U.S. Food and Drug Administration in response to a premarket tobacco product application (PMTA) covering certain of the company’s vapor products.
In a press note, the company said it stands behind the high quality of its PMTA, which it believes established that the products’ continued marketing would be “appropriate for the protection of public health,” the standard established by the Family Smoking Prevention and Tobacco Control Act of 2009. “These products are crucial to improving public health by helping adult smokers migrate to less harmful products,” the company wrote. “TPB will continue to engage with the FDA and other stakeholders as we consider options moving forward, including a formal appeal of the decision and potential legal relief.”
The PMTA denied by this MDO included an in-depth toxicological review, a clinical study and studies on patterns and likelihood of use. According to TPB, the data demonstrated that TPB products do not appeal to never-users, youth or former users and that a significant majority of users of TPB products had completely ceased use of combustible cigarettes. “The scientific literature on lower risk nicotine-delivery systems shows that these products can significantly improve public health by providing alternatives that are much less harmful than combustible cigarettes,” the company stated.
“While we believe the FDA’s current conclusion is misguided, we will continue our dialogue with the agency in search of a path forward,” said Larry Wexler, president and CEO of Turning Point Brands. “As we explore options for appealing this decision, we are hopeful that the agency reaffirms its commitment to science-based decision-making and to its announced Comprehensive Plan, which includes fully transitioning adult consumers down the continuum of risk in order to reduce the morbidity and mortality associated with combustible cigarette use by preserving the diverse vapor market.”
The company says it continues to monitor regulatory developments and intends to take appropriate measures to manage and mitigate any risk exposure that may result from these and any future MDOs.
September 17, 2021
TPB Increases Stake in ReCreation Marketing

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Turning Point Brands has increased its equity stake in ReCreation Marketing, a Canadian distribution company, from 50 percent to 65 percent.
ReCreation Marketing is a specialty marketing and distribution firm focused on building brands in the Canadian smoking accessories, vaping and alternative products categories. As part of this transaction, ReCreation will transition its company name to Turning Point Brands Canada Corp. over the next 90 days.
ReCreation has significantly expanded the reach of Zig-Zag papers, which now has presence in 75 percent of the volume-weighted distribution within the private dispensary channel. As a result of the ReCreation partnership, TPB expects to continue to expand its presence in Canada, creating an avenue for its broader portfolio of products to enter the Canadian market.
“Increasing our stake in ReCreation Marketing was a logical move as Turning Point Brands continues to invest in the cannabis and tobacco-related sectors,” said Larry Wexler, CEO of Turning Point Brands, in a statement.
“Our partners at ReCreation Marketing are significantly expanding the distribution of our brands while also gaining market share in Canada, most notably capitalizing on Zig-Zag’s strong market position in the country. The increased stake and renaming into Turning Point Brands Canada signify the commitment to our strategy in Canada. We look forward to continuing to work closely with this accomplished team to strengthen our prominence in the market.”
“Turning Point Brands’ robust portfolio of leading brands, coupled with ReCreation Marketing’s proven ability to support distribution in traditional and alternative channels, is a natural expansion of our work together,” said Chris Riddoch, president of ReCreation Marketing. “This transaction will provide both companies the opportunity to penetrate the market and to increase our visibility and accessibility to Canadian retailers and consumers alike.”
August 11, 2021
TPB Acquires Unitabac Cigar Portfolio

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Turning Point Brands has acquired certain cigar assets of Unitabac. The acquisition comprises a portfolio of cigarillo products and related intellectual property, including cigarillo non-tip (NT) homogenized tobacco leaf (HTL), rolled leaf and natural leaf cigarillo products. The terms of the transaction were not disclosed.
The acquired brands compete in three core segments: Trivo, Hype and Hi-Fi within the cigarillo NT HTL segment; Cloud9 within the natural leaf cigarillo segment; and Badlands within the rolled leaf segment. These cigars are all “grandfathered products” or subject of substantial equivalence reports in place with the U.S. Food and Drug Administration.
“We are incredibly excited to welcome the Unitabac cigar brands to the Turning Point Brands family,” said Larry Wexler, CEO of Turning Point Brands, in a statement. “Industry analysts have highlighted that the multibillion-dollar cigarillo market growth is being fueled, in part, by the rapidly expanding movement toward cannabis legalization.
“Gaining access to Unitabac’s product portfolio provides us with necessary assets to build a more competitive platform to participate in this large and growing market. Our intention is to leverage both the Zig-Zag tobacco brand strength and the extensive reach of our retail distribution platform to further penetrate the cigar category by introducing new line extensions under the Zig-Zag tobacco brand and expanding the reach of the Unitabac cigar products.”
“Turning Point Brands’ deep knowledge of the evolving consumer experience, coupled with the company’s sales and marketing leadership, make the team an ideal partner for Unitabac,” said Rush Patel, founder of Unitabac. “With Turning Point Brands’ competitive advantages, grounded in superior marketing and distribution reach, I am confident our portfolio of products and brands developed over the past decade will continue to flourish under its forward-looking stewardship.”
Turning Point Brands reported net sales of $122.6 million in the second quarter of 2021, up 16.8 percent over that reported in the 2020 second quarter. Gross profit increased 25.1 percent to $60 million and net income increased 49.2 percent to $15.4 million
“Our second quarter performance continued to demonstrate Turning Point’s positive growth momentum, led by our core market segments. Zig-Zag had an exceptional quarter with over 70 percent growth, driven principally by our strategic initiatives and aided by a favorable comparison against a Covid-related disruption in MYO cigar wraps the previous year. Stoker’s also delivered a solid quarter fueled by double-digit growth in our MST business,” said Wexler in a press note.
July 27, 2021
Turning Point Brands Invests in Old Pal Cannabis Brand

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Turning Point Brands (TPB) has completed an $8 million strategic investment in Old Pal Holding Co. through a convertible note that includes follow-on investment rights.
Founded in 2018 by Rusty Wilenkin and Jason Osni, Old Pal is a leading cannabis brand that operates a nonplant touching licensing model and sells its products to consumers across the U.S.
TPB’s investment will enable Old Pal to expand product offerings in existing states, which include California, Nevada, Michigan, Oklahoma, Ohio, Washington and Massachusetts, and will help create the infrastructure necessary to support continued territory and product expansion. As a result of Old Pal’s strong brand recognition and extensive network of licensed cultivation and production relationships, the company has the ability to scale its geographic footprint while continuing to offer consistent and readily available products, according to TPB.
“Turning Point has a proven track record of developing and growing brands and is capitalizing on this experience to identify highly recognizable leading cannabis brands poised to experience significant growth,” said Larry Wexler, CEO of Turning Point Brands, in a statement. “Given Old Pal’s favorable market position, the awareness of its products outside its current geographies and its unique licensing model, we are confident the brand is well-positioned to further penetrate the market and capitalize on the growth potential of the cannabis industry.”
“Old Pal’s mission is to spread the shareable cannabis lifestyle to customers across the U.S. through accessible and high-quality products,” added Charlie Cangialosi, chief operating officer at Old Pal. “Turning Point Brands’ experience with iconic brands, like Zig-Zag, and success in adjacent and complementary industries will allow us to bring the Old Pal experience to a wider range of markets and consumers.”
July 23, 2021
TPB Ups Guidance After Strong Quarter

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Turning Point Brands (TPB) reported net sales of $107.6 million and gross profit of $53.3 million for the first quarter ended March 31, 2021, up 18.7 percent and 28.6 percent, respectively. Net income increased $7.3 million to $11.8 million. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) increased 57.4 percent to $28 million.
“Our first-quarter results demonstrated solid execution with year-over-year growth significantly outpacing our end markets,” said Larry Wexler, president and CEO of TPB, in a statement. “Zig-Zag led the way with a second consecutive quarter with over 40 percent growth, and Stoker’s delivered another double-digit growth quarter led by our MST business. As such, our core segments are continuing to perform well despite the tough comparables from the previous year period.
“NewGen had a solid growth quarter as it maintains optionality for long-term upside through its PMTA submissions.
“We are also excited about our recent investment in Docklight Brands, which increases our exposure in the cannabis space and boosts our portfolio through the addition of the Marley CBD products line.”
Our first-quarter results demonstrated solid execution with year-over-year growth significantly outpacing our end markets.
Larry Wexler, president and CEO, TPB
With the strength of the first-quarter results, TPB is revising its guidance provided on Feb. 10, 2021.
TPB projects net sales of $422 million to $440 million (up from previous guidance of $412 million to $432 million), which assumes strong double-digit sales growth for Zig-Zag products (up from previous guidance of double-digit sales growth); high single-digit sales growth for Stoker’s products (unchanged); mid to low single-digit declines for NewGen products (up from previous guidance of mid-single-digit sales declines), which includes single-digit declines for vape distribution (up from previous guidance of double-digit declines) offset by growth in Nu-X adjusted EBITDA of $103 million to $108 million (up from previous guidance of $99 million to $105 million).
For the second quarter of 2021, TPB projects net sales of $103 million to $109 million.
April 28, 2021
Turning Point Brands invests in Docklight
Turning Point Brands (TPB) has announced an $8.7 million strategic investment in Docklight Brands, a pioneering consumer products company with brands including Marley Natural cannabis and Marley CBD. In addition, TPB has obtained exclusive U.S. distribution rights for Docklight’s Marley CBD topical products. The investment into Docklight Brands’ Series A offering comes with certain follow-on investment rights.
As a result of this transaction, Turning Point Brands now has access to two iconic names in cannabis: Bob Marley and Zig-Zag. The Marley CBD skincare line, which includes after-sun, hand cream, lip balm, balm and roll-on products, combines tropical botanicals with hemp-derived CBD and is currently available nationwide in the U.S. in over 12,000 stores, including select 7-Eleven, Circle K, Safeway and Dollar General locations, with additional availability expected through TPB’s partner network.
The company’s investment into Docklight will also support the growth of the broader Marley CBD line, including Marley Mellow Mood teas, Marley wellness shots and Marley chocolate squares as well as Marley Natural THC products, which are produced and sold under license agreements in Canada, Jamaica and select U.S. states.
“Our goal is to build an expansive portfolio of the most innovative brands in the cannabis industry and to distribute these products across our vast partner network,” said Larry Wexler, CEO of Turning Point Brands, in a statement.
We are confident our strategic relationship with Turning Point Brands will greatly enhance both the visibility and availability of the Marley products across TPB’s extensive distribution network.
Damian Marano, CEO, Docklight Brands
“We reach consumers where they are most comfortable, selling products to distributors, selling to stores directly and interfacing with consumers one-on-one via e-commerce. Adding Marley products to our portfolio alongside our legacy Zig-Zag brand marks yet another milestone as we continue to leverage our brands and expand our distribution infrastructure.”
“Given our shared focus on branded products, we are excited to expand the reach of the iconic Bob Marley brand. We are confident our strategic relationship with Turning Point Brands will greatly enhance both the visibility and availability of the Marley products across TPB’s extensive distribution network,” said Damian Marano, CEO of Docklight Brands.
April 21, 2021
Turning Point Appoints Reformina as CFO

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Turning Point Brands has appointed Chief Business Development Officer Louie Reformina as the company’s new chief financial officer effective May 1, 2021. Reformina is replacing Bobby Lavan, who will step down after first quarter earnings to pursue a new opportunity. In addition, Brian Wigginton, Turning Point Brands’ chief accounting officer, has been promoted from vice president to senior vice president.
“I would like to thank Bobby for his unceasing commitment to the company,” said Larry Wexler, Turning Point Brands’ president and CEO, in a statement. “Bobby played a major role in improving Turning Point Brands’ capital structure, streamlining the business, making accretive acquisitions and investments and positioning the company for the growth that we are experiencing today.
“I look forward to tracking his future progress. Additionally, Louie has played an important leadership role in the company by pivoting our focus to higher growth opportunities in cannabis-related and other branded consumer product industries. I am excited to see him expand his responsibilities as we accelerate our growth trajectory.”
“Turning Point Brands is one of the most innovative and well-capitalized companies in the high-growth cannabis-related accessories market,” said Reformina. “Our iconic brands and market-leading distribution platform set us apart in this rapidly evolving space. In addition, our New York Stock Exchange listing helps to provide deep access to the capital markets, which allows us to opportunistically take advantage of acquisition opportunities that are beyond the reach of many competitors.
I look forward to continuing to work with the team to reinvest our substantial free cash flow in high-growth branded consumer products, expand our distribution infrastructure and strengthen our capital position.
Louie Reformina
“As CFO, I look forward to continuing to work with the team to reinvest our substantial free cash flow in high-growth branded consumer products, expand our distribution infrastructure and strengthen our capital position.”
“I would like to thank Larry and the management team at Turning Point Brands for the opportunity to work with them on the company’s continued evolution,” said Lavan. “I have been working closely with Louie since he first joined the company and am confident that his elevation to CFO will help to ensure a seamless transition while continuing the company’s focus on growth.”
Reformina joined Turning Point Brands in 2019 and has more than 20 years of financial experience. He previously served in investment roles at Point72 Asset Management, Waterfront Capital Partners, Perella Weinberg Partners and Vestar Capital Partners. He began his career as an investment banker at Goldman Sachs & Co. and received his Master of Business Administration degree from the Stanford University Graduate School of Business as well as his Bachelor of Science degree in electrical engineering from Cornell University, where he graduated summa cum laude.
Turning Point Brands estimates that net sales for the first quarter of 2021 will be at the high end or above the previous guidance of $97 million to $102 million provided during the presentation of its full-year and fourth-quarter 2020 results on Feb. 10, 2021.
March 24, 2021
Sales and Profits up at Turning Point Brands

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Net sales of Turning Point Brands (TPB) increased 31.2 percent to $105.3 million for the fourth quarter of 2020. Gross profit increased 321.8 percent to $51.8 million, partly due to certain restructuring expenses incurred in the prior year period. Net income increased $25 million to $12.7 million compared to the previous year’s fourth quarter. Adjusted EBITDA increased 80.9 percent to $25.8 million.
Net sales increased 11.9 percent to $405.1 million for the full year ending Dec. 31, 2020. Gross profit increased 38.7 percent to $189.6 million, partly due to certain restructuring expenses in the prior year period. Net income increased $19.3 million to $33 million, which includes premarket tobacco product application (PMTA)-related expenses from the fourth quarter of 2019 through the third quarter of 2020. Adjusted EBITDA increased 34 percent to $90.2 million.
Turning Point Brands has renamed its core business segments from Smoking Products to Zig-Zag Products and Smokeless Products to Stoker’s Products. Historical financial results are not impacted by the segment name change.
“Despite challenges related to Covid-19, our company remained focused on executing our plan throughout 2020 and finished the year strong with tremendous top-line growth in the fourth quarter,” said Larry Wexler, president and CEO, in a statement.
“The year was especially transformational for our Zig-Zag brand as targeted initiatives led to 22 percent growth for the full year as we repositioned it to be our fastest growing segment. Our Stoker’s segment delivered a second consecutive year of double-digit growth driven by incremental share gains in both product lines. Going forward, we expect Zig-Zag and Stoker’s to continue to be the backbone of our organic sales growth.
“NewGen managed to deliver a solid performance despite market disruption around the PMTA application process while creating long-term upside potential through its filed applications. We also had an active year of capital deployment with the acquisition of assets from Durfort as well as investments in the cannabinoid sector in Dosist and Wild Hempettes.
“Most recently, we successfully priced $250 million of senior secured notes, the latest step in the evolution of our capital structure, which gives us increased flexibility to scale the business through additional acquisitions and investments. Capitalizing on our strong momentum and increased liquidity, we expect another strong year in 2021.”
February 11, 2021