Turning Point Brands Archives - Green Market Report

StaffOctober 26, 2022


The Daily Hit is a recap of cannabis business news for Oct. 26, 2022.


South Dakota Moves to Restrict Medical Marijuana Program Further

A South Dakota state legislative panel this week gave initial approval to a bill that would restrict the MMJ program by making it harder to add qualifying conditions and by writing a handful of medical ailments directly into state law. If the bill succeeds, it may be the first time in the history of the U.S. marijuana industry that a state moved to restrict its MMJ program instead of broadening it. Read more here.

Verano Sued on Busted Acquisition

Verano Holdings’ (OTC: VRNOF) breakup with Goodness Growth looks like it’s going to be messy and expensive. Chicago-based marijuana company Verano called off its planned $413 million purchase of Goodness Growth on Oct. 13, citing unspecified breaches of “covenants and representations.” Goodness says Verano tried to back out of their deal without justification. Read more here.

Stifel Downgrades Canopy to a Sell

Stifel analyst Andrew Carter has downgraded Canopy Growth (NASDAQ: CGC) to a Sell rating following the company’s announcement to create Canopy USA. Stifel has a price target of C$2.90, roughly US$2.14. The stock was lately selling at $3.00. Carter noted: “Overall, we take a negative view noting the deal does not alleviate Canopy’s risks which are enhanced given Acreage’s financial position.” Read more here.

Turning Point Vape Sales Plunge as Zig-Zag Lights Up

Turning Point Brands Inc.  (NYSE: TPB) announced financial results for the third quarter ending Sept. 30, 2022, as sales fell by 1.9% to $107.8 million. However, it beat the Yahoo Finance average analyst estimate of $106 million in sales.  Turning Point also reported that its net income decreased by 14.3% to $11.5 million. Read more here.


Harmony Foundation

Workers at Harmony Foundation, and its Harmony Dispensary in Secaucus, New Jersey, voted to unionize as members of the United Food and Commercial Workers (UFCW) Local 360. Recently, Harmony announced its intention to expand into the adult-use marijuana market and to open locations in Hoboken and Jersey City, as well as a new cultivation site in Lafayette. Read more here.

DreamField Brands

Two disgruntled customers are suing a California marijuana company, alleging that their prerolled joints were not as strong as claimed. The lawsuit was filed on Oct. 20 against DreamFields Brands Inc. for allegedly falsely claiming that their products have a high THC component, according to the suit. Read more here.

Debra BorchardtOctober 26, 2022


Turning Point Brands, Inc.  (NYSE: TPB) announced financial results for the third quarter ending September 30, 2022, as sales fell by 1.9% to $107.8 million. However, it beat the Yahoo Finance average analyst estimate of $106 million in sales.  Turning Point also reported that its net income decreased by 14.3% to $11.5 million.

Turning Point earnings for the third quarter fell to $11.54 million, or 60 cents a share, from $13.47 million, or 65 cents a share, in the year-ago quarter. Breaking out one-time items, Turning Point Brands earned 72 cents a share. FactSet data showed that the average of analysts expected Turning Point Brands to earn 49 cents a share, while Yahoo Finance had the number pegged at 60 cents.


Turning Point reaffirmed its previous forecast which had been trimmed from earlier in the year. The company’s full-year 2022 results are forecast as follows:

  • Zig-Zag Products sales of $186 to $191 million (compared to the previous outlook of $193 to $200 million)
  • Stoker’s Products sales of $128 to $132 million (compared to the previous outlook of $127 to $133 million)
  • Consolidated adjusted EBITDA of $96 to $99 million (compared to the previous outlook of $97 to $103 million)

“Zig-Zag and Stoker’s segments demonstrated strong double-digit growth during the quarter despite a challenging economic backdrop with inflationary pressures continuing to impact consumers. Zig-Zag benefitted from solid growth in the U.S. papers and Canadian businesses during the quarter and the successful launch of CLIPPER lighters. Meanwhile, Stoker’s MST experienced continued share gains driven by consumer trade-down to the value category. NewGen sales decreased slightly compared to the previous quarter and the segment remained profitable as we monitor ongoing regulatory developments,” said Graham Purdy, President and CEO. “We continued to return capital to our shareholders during the quarter while maintaining a strong cash balance that provides us with the ability to navigate the current financing environment. While our competitive position remains strong and we outperformed our markets during the quarter, it is prudent to adjust our outlook for the year in light of the current economic environment.”

Sales Breakdown

For the third quarter, Zig-Zag Products net sales increased 23.3% to $52.1 million. Both TPB’s U.S. rolling papers and e-commerce, and other smoking accessories businesses grew by double-digits during the quarter. Continued strength in paper cones, strong receptivity to promotional programs, the launch of CLIPPER lighters, and timing shifts in Canadian deliveries contributed to strong performance during the quarter. In total, the company said it believes approximately $5 million of sales was pulled forward from the fourth quarter across the Zig Zag portfolio.

Stoker’s Products net sales increased 10.0% to $33.5 million on strong double-digit growth of MST partially offset by a mid-single digit decline in loose-leaf chewing tobacco. FRE nicotine pouch product was a marginal contributor to segment sales.

NewGen Products’ net sales decreased 40.3% to $22.2 million. The regulatory environment continues to impact sales. Net sales have been relatively steady sequentially within the current year period.

Total gross debt as of September 30, 2022, was $422.5 million. The corresponding net debt (total gross debt less cash) on September 30, 2022, was $316.8 million. The company said it ended the quarter with total liquidity of $127.1 million, comprised of $105.7 million in cash and $21.4 million of revolving credit facility capacity.


Just a couple of weeks ago, Turning Point announced that it named long-tenured company executive Graham Purdy as CEO and Board Director, following Yavor Efremov’s resignation as CEO and Director. Additionally, David Glazek will be transitioned from Non-Executive to Executive Board Chairman, effective January 2023. Purdy oversaw two of the company’s highly successful brand extensions, rolling out Zig-Zag Cigar Wraps and Stoker’s MST.

StaffOctober 17, 2022


The Daily Hit is a recap of cannabis business news for Oct. 17, 2022.


Cantor Ranks Potential M&A Cannabis Targets

The cannabis M&A market may be on pause for now as companies cross their fingers for some sort of banking relief. “Uncertainty around SAFE Plus will probably delay M&A activity until after the lame duck session,” noted Cantor Fitzgerald analyst Pablo Zuanic. With the blowup of the Verano and Goodness Growth deal last week, Zuanic offered a look at what he thinks are potential targets for acquisition going into the fourth quarter. Read more here.

Neptune Wellness Gets Out of Cannabis Biz

Neptune Wellness Solutions (Nasdaq: NEPT) is selling its cannabis business to PurCann Pharma for C$5.15 million to be paid in cash. PurCann Pharma is a subsidiary of Groupe SiliCycle, a Quebec-based company with more than 27 years of experience with extracting and purifying active ingredients from natural biomass. Read more here.

Turning Point CEO Out After 10 Months, Guidance Lowered

Turning Point Brands (NYSE: TPB) appointed long-tenured company executive Graham Purdy as CEO and board director on Monday, replacing Yavor Efremov after he resigned as CEO and director. Efremov officially took on the mantle if CEO in January 2022. The company also lowered its guidance for 2022 sales, in conjunction with posting third-quarter financial results. Read more here.

Cautionary Tale of Local Control, Red Tape, and Too Few Cannabis Retailers

As it enters the final stages of development, New York state regulators may want to take heed of how California’s heavy-handed regulatory and tax approach to legal cannabis has led to an out-of-control underground market – at least if the East Coast wants to avoid a similar fate. Read more here.


Flower One

Flower One Holdings (CSE: FONE) (FSE: F11), the Canadian parent company of a cannabis cultivator and producer in Nevada, authorized the Canadian company and its Canadian subsidiaries to seek protection from the Supreme Court of British Columbia pursuant to the Companies’ Creditors Arrangement Act. Flower One is seeking to appoint PricewaterhouseCoopers. as the court appointed monitor as it undergoes restructuring. Read more here.

Pacific Banking Corp

A cannabis-friendly banking firm is urging a California court to issue a stay on claims that it failed to pay taxes on behalf of one of its clients, resulting in millions in penalties, saying that because the CEO has been indicted and is now in federal custody, he cannot appear to testify at an upcoming hearing. Read more here.

Adam JacksonOctober 17, 2022


Turning Point Brands (NYSE: TPB) announced the appointment of long-tenured company executive Graham Purdy as CEO and board director on Monday to replace Yavor Efremov after he resigned as CEO and director. Efremov lasted barely less than a year as the CEO as he was officially appointed to the role in January 2022. The company also lowered its guidance for 2022 sales.


Purdy served as Chief Operating Officer since 2019 prior to his appointment as CEO, overseeing two of the company’s highly successful brand extensions during his tenure — Zig-Zag cigar wraps and Stoker’s dipping tobacco.

“I am excited to serve as Turning Point’s next CEO and drive the company’s strategic priorities to enhance shareholder value,” said Purdy. “Over the past three decades, Turning Point has built a leading industry position through our portfolio of large and leading brands, innovative marketing, and omnichannel distribution capabilities, along with our strong track record of new product innovation.

I look forward to working with our highly talented team to continue to build a world-class consumer products company for the benefit of our employees, customers, and shareholders.”

The new honcho has held various leadership positions since joining TPB in 2004, including as president of the new products division and senior vice president of sales.

Turning Point Brands newly minted Chief Operating Officer Graham Purdy. Source: RunSwitch

In a news release, the company said that Purdy led day-to-day operations during the COVID-19 pandemic, “managing through complex challenges to the business while completing three of the most successful years in the company’s history.”

David Glazek will transition from non-executive to executive board chairman, effective January 2023.

“Graham is a highly experienced operator who has been integral to Turning Point’s success,” said Glazek, chairman of TPB’s board of directors. “His deep knowledge of the company’s operations and industry make him ideally suited to lead TPB today. We are confident in his ability to oversee Turning Point’s brand strategy and sharpen the company’s operational focus.”

Glazek added, “The board would also like to thank Mr. Efremov for his many contributions during his tenure. In the last year, he has launched key initiatives, including the expansion of our distribution platform, enhancing our IT infrastructure, and adding new leadership talent. We wish him well going forward.”

Efremov in the release said that he was “proud” of what TPB accomplished under his watch, “and the progress that has been made on key initiatives over the past year.”

“I am grateful to have had the opportunity to serve as CEO and meet and work alongside the many hard-working and dedicated employees of Turning Point,” said Efremov.

Updated Full-Year Outlook

Turning Point posted third-quarter sales, estimating net sales will be between $106 million and $108 million, net income will be between $10.5 million and $12 million and adjusted EBITDA will be between $23.5 million and $25 million.

The company also updated its full-year 2022 outlook ahead of its Oct. 26 conference call. The company expects:

  • Zig-Zag products sales of $186 million to $191 million (versus the previous outlook of $193 million to $200 million)
  • Stoker’s products sales of $128 million to $132 million (versus the previous outlook of $127 million to $133 million)
  • Consolidated adjusted EBITDA of $96 million to $99 million (versus the previous outlook of $97 million to $103 million)

Debra BorchardtJuly 27, 2022


Turning Point Brands, Inc. (NYSE: TPB) announced disappointing financial results for the second quarter ending June 30, 2022, as net sales dropped by 16.1% to $102.9 million. This missed the yahoo Finance average analyst estimate for revenue of $105 million, but it was higher than the first quarter’s net revenue of $100 million.   Turning Point reported that combined net sales for Zig-Zag and Stoker’s Products only declined by 0.9% for the quarter. NewGen net sales, which is the vape category, declined by 45.1% and dropped 2.1% sequentially.

The net income decreased 64.7% to $5.4 million from last year’s $13 million for the same time period and the adjusted EBITDA decreased 17.6% to $24.7 million.

The diluted EPS of $0.30 and adjusted Diluted EPS of $0.70 fell versus the reported $0.73 and $0.84 in the same period one year ago, respectively. This also missed the analyst estimates for earnings of $0.72.

“We are pleased with the stable performance of both the Zig-Zag and Stoker’s segments during the quarter in light of a heightened inflationary environment for our customers with rising prices at the pump impacting consumer traffic in convenience stores. While overall sales decreased 16 percent from the previous year, Zig-Zag and Stoker’s sales were steady despite weakness in the wraps and loose leaf subsegments. Zig-Zag maintained its leading positions in both the roll-your-own paper and cigar wraps markets while Stoker’s MST experienced accelerated share gains driven by consumer trade-down to the value category. Despite NewGen revenue decreasing 45 percent from last year, the segment remained relatively stable from the previous quarter and profitable as we continue to monitor FDA regulatory developments,” said Yavor Efremov, President and CEO. “We continued to deploy a substantial amount of our free cash flow towards share repurchases during the quarter while maintaining a strong balance sheet providing us with optionality on further capital deployment.”

Expenses did get trimmed to $33.3 million versus $35.1 million in the second quarter of 2021. Turning Point also ended the quarter with total liquidity of $128.8 million, comprised of $107.4 million in cash and $21.4 million of revolving credit facility capacity. During the quarter, the company said it spent $8.8 million to repurchase 301,662 shares at an average price of $29.16 per share. The stock was lately trading at $30. The company also recorded an additional impairment of $6.3 million during the quarter related to its investment in the cannabis brand dosist.

Next Gen Trouble

The company said that the vape category remains under pressure due to the regulatory environment which is hurting sales. For the quarter, the NewGen Products segment’s gross profit decreased 50.6% to $7.0 million. The segment gross margin contracted 340 basis points from the previous year to 30.1 percent due to product mix and the competitive environment.

“Despite another challenging quarter further impacted by new regulation around synthetic nicotine products, our vape business remained profitable,” concluded Purdy. “Meanwhile, our distribution capabilities continued to improve through the quarter as we position our business for a post-PMTA environment while our vapor products’ applications remain under FDA review.”


Mr. Efremov concluded, “Going forward, we maintain a favorable outlook on our underlying business and our competitive positioning. However, given the market environment during the second quarter, along with continued inflationary pressures and resulting uncertainty of consumer confidence, we feel it is prudent to adjust our outlook for the year.”

Turning Point lowered its estimates for its 2022 sales and blamed it on the uncertain macro environment and slower than expected improvement in its NewGen Products segment.  Zig-Zag Products sales are expected to remain flat in a range of $193 to $200 million, Stoker’s Products sales of $127 to $133 million, which is only tweaking the upper end of the range from $134 million. Consolidated adjusted EBITDA is estimated to range between $97 to $103 million.

Debra BorchardtApril 27, 2022


Turning Point Brands, Inc. (NYSE: TPB) announced financial results for the first quarter ended March 31, 2022. Turning Point reported that net sales decreased 6.3% to $100.9 million, while net sales for Zig-Zag and Stoker’s Products increased 10.1%. Net income decreased 6.7% to $11.0 million. The adjusted EBITDA dropped 9.8% to $25.3 million and the diluted EPS of $0.55 and Adjusted Diluted EPS of $0.71 as compared to $0.57 and $0.80 in the same period one year ago, respectively.

“Our first quarter results were in-line with our expectations as we continued to grow our market share for both Zig-Zag and Stoker’s while navigating a difficult consumer and regulatory environment to drive profitability in each of our segments, including NewGen. Sales decreased 6 percent from the previous year driven by a 37 percent decline in NewGen sales but showed double-digit growth excluding NewGen,” said Yavor Efremov, President and CEO, Turning Point Brands. “Zig-Zag delivered another strong growth quarter led by our U.S. Papers business which built on its market leading share during the quarter. At the same time, Stoker’s maintained its growth trajectory driven by double-digit growth in the Moist Snuff Tobacco (MST) business which benefited from consumer trade-down as a leading value brand. Despite the expected sales decline, NewGen maintained positive profitability during the quarter while improving the distribution reach for its regulated products.”

Zig-Zag Grows

Turning Point said that the U.S. rolling papers and e-commerce business grew double-digits, aided by approximately $2 million in sales from an inventory load with certain customers. A low-single-digit decline in the cigar wraps business and double-digit decline in the Canadian business partially offset this growth. The decline in the cigar wraps business was partially due to a trade inventory adjustment compared to the prior-year period. Order timing that benefitted the prior year period contributed to the decline in the Canadian business. Wild Hemp sales moved into the Zig-Zag Products segment during the current quarter which contributed $0.2 million, or 0.6 percent to the segment growth. For the first quarter, total Zig-Zag Products segment volume increased 7.1 percent, while price / mix increased 4.3 percent.

For the quarter, the Zig-Zag Products segment gross profit increased 5.8% to $26.3 million. The segment’s gross margin contracted 300 basis points to 57.7 percent driven primarily by growth in lower gross margin products and lower margin contribution from the inclusion of the DVW acquisition in the current period.

“Paper cones and Zig-Zag’s e-commerce business continued to drive the growth within our U.S. papers business,” said Graham Purdy, Chief Operating Officer, Turning Point Brands. “We introduced a new line of Zig-Zag rough cut natural leaf cigars and ramped up Zig-Zag hemp wraps and natural leaf tobacco wraps distribution during the quarter. Meanwhile, our marketing team continues to launch exciting programs to strengthen the Zig-Zag brand including its recent partnership with luxury fashion line AMIRI for its Spring 2022 collection. We are also eager to launch CLIPPER lighters distribution in the second half of the year which has the potential to be a meaningful contributor to the segment’s long-term growth.”

Vape Struggles

For the first quarter, NewGen Products’ net sales decreased 37.1% to $23.5 million. The regulatory environment for the vape businesses continues to impact sales. For the quarter, the NewGen Products segment gross profit decreased 37.7% to $7.8 million. The segment gross margin contracted 40 basis points from the previous year to 33.0 percent.

“Our vape business remained profitable even with the expected weakness during the quarter as it continues to navigate challenges presented by the regulatory environment,” concluded Purdy. “Encouragingly, we continued to ramp our last mile logistics and distribution capabilities through the quarter. We will continue to adapt to the market environment as it goes through another transition period with the FDA expanding regulation of nicotine products. TPB’s applications for our vapor products remain under review.”

Mr. Efremov added, “We continue to monitor FDA developments. While added regulation may cause short-term disruption, this is a necessary step to fully regulate the industry, create a level playing field, and provide consumers with additional reduced-risk alternatives to cigarettes.”

Debra BorchardtFebruary 22, 2022


Turning Point Brands, Inc. (NYSE: TPB) reported its financial results for the fourth quarter and full-year ending December 31, 2021 as sales remained flat year-over-year. Turning Point‘s fourth-quarter total sales in 2021 were $105.283 million down slightly from 2020’s fourth-quarter total sales of $105.285 million. Net income in the fourth quarter fell to $11 million from last year’s $14 million.

For the full year 2021, sales increased 10 % to $445.5 million, while net income increased 36.3% to $52.1 million. This was in line with the company’s previously announced lowered guidance. The diluted EPS was $2.52 and Adjusted Diluted EPS was $3.03 versus $1.85 and $2.60 in the same period one year ago, respectively.

Turning Point also forecasts that in 2022 Zig-Zag Products sales are expected to range between $193 to $203 million and Stoker’s Products sales range between $127 to $134 million. The company also said that “Given the dynamic regulatory environment impacting the vape industry, it is difficult to provide reliable guidance for the NewGen Products segment. However, the company’s current expectation is to generate consolidated adjusted EBITDA in-line with fiscal year 2021 despite anticipated volatility in the NewGen Products segment.”

“Our fourth-quarter results capped off another strong year of performance for Turning Point Brands with EBITDA growing 20 percent for the fiscal year. Sales for the fourth quarter finished above our previous guidance and in-line with the previous year despite a 22 percent decline in NewGen sales which fell within our previous guidance,” said Yavor Efremov, President and Chief Executive Officer, Turning Point Brands. “Zig-Zag delivered another quarter of double-digit growth against a tough comparable period, while Stoker’s re-accelerated to high-single digit growth driven by mid-teens growth in the Moist Snuff Tobacco (MST) business. Additionally, NewGen managed through a challenging quarter clouded by the evolving regulatory landscape while maintaining long-term upside potential in a post-PMTA environment.”

Zig-Zag Is The Winner

For the fourth quarter, net sales of Zig-Zag Products increased 13.6% to $46.1 million. The company said that growth was led by double-digit advances in the U.S. rolling papers and Canadian businesses, including consolidation of Turning Point Brands Canada (formerly ReCreation Marketing) which contributed $4.5 million in the Q4 period. “This was partially offset by a double-digit decline in our cigar wraps business as the prior year period benefitted from the re-stocking of channel inventory that was depleted by a COVID-related manufacturing shutdown earlier in 2020. The cigar wraps business was up sequentially from the third quarter of 2021.” “Our Zig-Zag business experienced organic growth during the quarter despite a double-digit percentage growth headwind from the re-stocking of cigar wraps channel inventory in the prior year period,” said Graham Purdy, Chief Operating Officer, Turning Point Brands.

For the fourth quarter, net sales of Stoker’s Products increased 8.3% to $31.2 million on double-digit growth of MST. “This was partially offset by a low single-digit decline of loose-leaf chewing tobacco. MST represented 63 percent of Stoker’s Products revenues in the quarter, up from 59 percent a year earlier. For the fourth quarter, total Stoker’s Products segment volume increased 2.1 percent, while price / mix increased 6.2 percent.”

Vape Struggles

For the fourth quarter, net sales of NewGen Products decreased 22 % to $28.0 million. For the full year, net sales of NewGen Products decreased 7.5% to $144.7 million. Sales were impacted by the regulatory environment in the vape businesses. “NewGen continues to navigate multiple challenges driven by the evolving regulatory environment,” said Purdy. “We began building a last mile network infrastructure that had completed over 38,000 shipments prior to the PACT Act implementation in October. Since then, we have improved our operational positioning having received an exemption with the USPS to ship our vape products to qualified B2B customers while continuing to ramp our B2C logistics capabilities. Meanwhile, our proprietary products remain under review by the FDA as our regulatory capabilities has allowed us to remain one of the few companies continuing to navigate the PMTA process.”

Clipper Agreement

In addition to delivering earnings, Turning Point announced that it had entered into an agreement with Flamagas, a lighter manufacturer, for exclusive distribution of CLIPPER lighters in the United States and Canada. CLIPPER is the number one reusable lighter in the world and the number two overall world lighter brand. CLIPPER is currently available in several leading retail chains with a growing presence in additional retail outlets, dispensaries, smoke shops, and headshops.

“Given Flamagas’ global reach and renowned product portfolio, this partnership represents a tremendous opportunity to expand CLIPPER’s reach in the United States and Canada,” said Frank Vignone, Senior Vice President of Sales and Marketing at Turning Point Brands. “CLIPPER and Zig-Zag create a powerful combination of iconic premium brands in the roll-your-own market perfectly suited to leverage Turning Point Brands’ distribution infrastructure touching over 210,000 retail outlets in North America.”

Mr. Efremov continued, “Turning to capital deployment, we increased our share repurchase activity during the quarter and continue to maintain a strong balance sheet. Going forward, I am eager about the opportunity to work with a great organization, continue our momentum and invest further to deliver future organic and inorganic growth.”



StaffDecember 16, 2021


Turning Point Brands (NYSE: TPB) has appointed Yavor Efremov as President and Chief Executive Officer, effective January 11, 2022. Mr. Efremov succeeds the Company’s current CEO, Larry Wexler, who will retire in January following 18 highly successful years at TPB. Mr. Wexler will remain on the Board of Directors and serve as a consultant to the Company following his retirement.

Outlook Update

Turning Point also updated its guidance for 2021 revenue. The company said it now expects 2021 revenue and EBITDA to be near the higher end of the previous guidance, In October, Turning Point also revised its guidance downward from a range of $447 to $462 million to $433 to $443 million. At the time, the company cited the FDA regulatory environment along with the further implementation of the PACT Act. Turning Point also noted that to a lesser extent supply chain-related delays were pushing some sales of new products into the first quarter of 2022. The company also changed its forecast for its adjusted EBITDA to $104 to $108 million versus the previous guidance of $108 to $113 million.

“Yavor joined Turning Point’s Board of Directors in July 2021 to help develop our long-term strategic plan. Since then, he has spent extensive time working closely with teams in each area of the business,” said David Glazek, Chairman of Turning Point Brands. “Yavor came highly recommended by some of the most successful operators and investors in the world. The Board is confident he has the right skill-set to help grow the Company to the size and scale necessary to maximize value in a world driven by constantly shifting consumer preferences.”

Prior to joining Turning Point Brands, Mr. Efremov served as the CEO of Motorsport Network, where he was responsible for upgrading the IT infrastructure, processes, and company strategy to support the integration of more than 30 businesses around the world. He also served as a senior executive at Liberty Media Corp., where he was instrumental in sourcing, financing, and growing Liberty’s investments in multibillion-dollar businesses, including Charter Communications and Formula 1. Prior to that, Mr. Efremov worked as an investment banker at Goldman Sachs & Co. and as a corporate lawyer at the law firm of Cleary, Gottlieb, Steen & Hamilton. Mr. Efremov holds a J.D. from Yale Law School and a Ph.D. in economics from Yale University. He also has a B.S. in mathematics and a B.A. in economics from Furman University.

“It has been my sincere privilege to serve Turning Point Brands and its stakeholders during this period of significant growth as we increased EBITDA fivefold over the past 18 years,” said Mr. Wexler. “I want to thank both the Board for the opportunity to serve our shareholders, and my colleagues for their dedication, hard work and, most importantly, their resiliency during my tenure. Turning Point Brands is well-positioned with highly recognizable brands and a strong management team. I look forward to working with Yavor and the next generation of leaders to build upon the success we have achieved.”

Debra BorchardtNovember 29, 2021


A new report from Headset has found that Americans aren’t as into pre-rolls as Canadian consumers. Between August 2020 and August 2021, the market share of pre-rolls in Canada averaged 18.6%, while in the US, the market share of pre-rolls only averaged 9.5%. The only exception it seems is the Massachusetts market. Apparently, they really like pre-rolls in that state. 

Cooper Ashley Senior Data Analyst at Headset said he could think of two reasons that could partly explain why the pre-roll market share is higher in Canada than in the US.
  • Firstly, PreRolls were one of the few product formats that have been available since the beginning of Canada’s cannabis market. A regulation change, dubbed ‘Cannabis 2.0’, allowed previously-prohibited product formats (such as vapor pens, edibles, and concentrates) to be sold in Canadian cannabis retailers at the beginning of 2020 – more than a year after the market originally launched. Most product categories that were introduced in ‘Cannabis 2.0’ still have significantly lower market shares in Canada than in the US. For example, over the previous 90 days, edibles made up about 11% of sales in the US, but only 5% of sales in Canada.
  • Secondly, Canadian Pre-Roll products tend to be larger. By that, I mean that there tends to be more total cannabis in a single Canadian pre-roll product than in a US pre-roll product. For example, over the previous 90 days the highest volume package size of pre-roll in the US was 1g, but 1.5g in Canada. A tendency towards larger package sizes unsurprisingly pushes up the average price of these products as well. Eg. Over the previous 90 days the average price of a pre-roll product was about $11 in the US and about $18 in Canada. That difference in size and price could cause consumers to think of a pre-roll more as a primary purchase, rather than a low-cost add-on item.

When Americans want to buy pre-rolls, they typically choose the connoisseur/infused segment, which makes up 32.4% of sales. Canadians aren’t as picky and this same segment makes up only 0.1% of sales. Pricing is a possible reason for the large difference in Connoisseur/Infused market share between the two countries. In Canada, they are priced 57% higher than the average item price of the other segments, while in the US they are priced only 18% higher than the other segments.

However, pricing might not be the only reason that Americans are choosing the infused joints.  Andrew DeAngelo, Cannabis Industry Consultant, and Strategic Advisor said, “The quality of legal cannabis in the U.S is better in full flower form not in pre-roll form motivating consumers to roll their own rather than getting a subpar pre-roll.”

Scott Grossman, Vice President of Corporate Development at Turning Point Brands (NASDAQ: TPB) (maker of ZigZag rolling papers) agrees with DeAngelo on the perceived quality of cannabis in pre-rolls. He said, “In the U.S., the old pre-rolls were historically viewed as a lower quality flower which may have capped sales—in addition, these items are typically additions to the basket versus the main intent of purchase.” Grossman thinks that Americans prefer to roll their own so that they can control the quality of the product. Despite that, he thinks the perception is slowly changing. 


“Companies like Old Pal, Space Coyote, etc. have innovated to create shareable pre-roll packs which make a lot of sense, especially during the pandemic—no one wants to pass around a single joint,” said Grossman.”Nearly 30% of the U.S. pre-roll market is driven by infused pre-rolls—ie. flower either dipped in Kief, but more recently, pre-rolls with hash concentrates within (a better form factor).” 

More companies are producing mini-pre-roll packages so that people can have the social aspect of smoking joints together but without the passing around of a joint. The smaller size also means fewer unsmoked joints that the consumer now has to store without it falling apart or making a mess. For example, Green Thumb Industries (OTC: GTBIF) sells a package of five mini-pre-rolls called Dogwalkers. The idea is that the little joint is small enough to be enjoyed walking one’s dog. 

Cones could be another reason why Americans are rolling their own versus buying pre-rolls. The innovation of selling a cone-shaped empty joint with a small plunger to tamp down dry herb can turn those without joint-rolling skills into a master. Grossman said, “Without question for the consumer. Not only does it make it easier to roll, but new innovation at the cultivation/manufacturing facilities allows the production of pre-rolls at scale (which, to be clear, is still much more labor-intensive than tubes). In addition, a conical joint versus a straight tube/joint actually makes the burn better due to the “Venturi Effect” — because there’s more material on top, it produces a more consistent flavor because you’re burning more in the beginning (and less in the end). This creates less resin and because of increased pressure, it tends to burn smoother. Punchline—a more concentrated hit. Cones also tend to produce less waste (because there is less material near the tip).”

Joint burning performance is also a key issue for these consumers. DeAngelo said that rolling joints at home avoids the joint running problem (burning unevenly) associated with almost all store-bought joints in the US. “A joint that is stuffed by a machine runs like crazy compared to a joint rolled by hand. The way the fibers intertwine works better with a hand roll so the joint burns evenly. Americans are more sensitive to this perhaps. I know I am.” 

More Pre-Roll Differences

Headset also determined in its report that market shares of the Indica and Sativa Single Strain segments in Canada were more than double the size of their market share in the U.S. where Hybrid – Single Strain has more category share than Indica and Sativa combined. “We also find that the Cannagars/Blunts segment owned 4.2% of the Pre-Roll market in the US, while it only held 0.1% within Canada. 

While Americans haven’t been big buyers of pre-rolls to date, that could be changing. It seems companies have learned that tossing the crummy trim into a pre-roll isn’t going to sell. Social media accounts have shown various people buying these pre-rolls and then unwrapping them on camera to expose the insides. That exposure may have turned the tide on poor-quality pre-rolls. As consumers spread the word of an improved product, sales are likely to grow and could make this an improving category.


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The Green Market Report focuses on the financial news of the rapidly growing cannabis industry. Our target approach filters out the daily noise and does a deep dive into the financial, business and economic side of the cannabis industry. Our team is cultivating the industry’s critical news into one source and providing open source insights and data analysis


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