Document and Entity Information - USD ($) $ in Millions	12 Months Ended
Document and Entity Information - USD ($) $ in Millions	Dec. 31, 2022	Mar. 03, 2023	Jun. 30, 2022
Cover [Abstract]
Document Type	10-K
Amendment Flag	false
Document Annual Report	true
Document Period End Date	Dec. 31, 2022
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	FY
Document Transition Report	false
Entity File Number	001-37763
Entity Registrant Name	TURNING POINT BRANDS, INC.
Entity Central Index Key	0001290677
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	20-0709285
Entity Address, Address Line One	5201 Interchange Way
Entity Address, City or Town	Louisville
Entity Address, State or Province	KY
Entity Address, Postal Zip Code	40229
City Area Code	502
Local Phone Number	778-4421
Title of 12(b) Security	Common Stock, $0.01 par value
Trading Symbol	TPB
Security Exchange Name	NYSE
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
ICFR Auditor Attestation Flag	true
Entity Shell Company	false
Entity Public Float			$ 424
Entity Common Stock, Shares Outstanding		17,562,795
Auditor Firm ID	49
Auditor Name	RSM US LLP
Auditor Location	Richmond, Virginia

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Current assets:
Cash	$ 106,403	$ 128,320
Accounts receivable, net of allowances of $114 in 2022 and $262 in 2021	8,377	6,496
Inventories	119,915	87,607
Other current assets	22,959	26,746
Total current assets	257,654	249,169
Property, plant, and equipment, net	22,788	18,650
Deferred income taxes	8,443	1,363
Right of use assets	12,465	15,053
Deferred financing costs, net	282	388
Goodwill	136,253	162,333
Other intangible assets, net	83,592	87,485
Master Settlement Agreement (MSA) escrow deposits	27,980	31,720
Other assets	22,649	35,399
Total assets	572,106	601,560
Current liabilities:
Accounts payable	8,355	7,361
Accrued liabilities	33,001	32,937
Current portion of long-term debt	0	0
Other current liabilities	20	38
Total current liabilities	41,376	40,336
Notes payable and long-term debt	406,757	414,172
Lease liabilities	10,593	13,336
Total liabilities	458,726	467,844
Commitments and contingencies
Stockholders' equity:
Preferred stock; $0.01 par value; authorized shares 40,000,000; issued and outstanding shares -0-	0	0
Additional paid-in capital	113,242	108,811
Cost of repurchased common stock (2,316,460 shares at December 31, 2022 and 1,295,408 shares at December 31, 2021)	(78,093)	(48,869)
Accumulated other comprehensive loss	(2,393)	(195)
Accumulated earnings	78,691	71,460
Non-controlling interest	1,735	2,312
Total stockholders' equity	113,380	133,716
Total liabilities and stockholders' equity	572,106	601,560
Common Stock, Voting [Member]
Stockholders' equity:
Common stock	198	197
Common Stock, Nonvoting [Member]
Stockholders' equity:
Common stock	$ 0	$ 0

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Current assets:
Accounts receivable, allowance	$ 114	$ 262
Stockholders' equity:
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	40,000,000	40,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Repurchased common stock (in shares)	2,316,460	1,295,408
Common Stock, Voting [Member]
Stockholders' equity:
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	190,000,000	190,000,000
Common stock, shares issued (in shares)	19,801,623	19,690,884
Common stock, shares outstanding (in shares)	17,485,163	18,395,476
Common Stock, Non-Voting [Member]
Stockholders' equity:
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	10,000,000	10,000,000
Common stock, shares issued (in shares)	0	0
Common stock, shares outstanding (in shares)	0	0

Consolidated Statements of Income - USD ($) $ in Thousands	12 Months Ended
Consolidated Statements of Income - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Consolidated Statements of Income [Abstract]
Net sales	$ 415,013	$ 445,471	$ 405,111
Cost of sales	209,475	227,637	215,121
Gross profit	205,538	217,834	189,990
Selling, general, and administrative expenses	130,024	127,513	125,563
Operating income	75,514	90,321	64,427
Interest expense, net	19,524	20,500	13,487
Investment loss (gain)	13,303	6,673	(198)
Goodwill and intangible impairment loss	27,566	0	0
Gain on extinguishment of debt	(885)	(2,154)	0
Net periodic benefit cost, excluding service cost	0	0	989
Income before income taxes	16,006	65,302	50,149
Income tax expense	4,849	14,040	11,957
Consolidated net income	11,157	51,262	38,192
Net loss attributable to non-controlling interest	(484)	(797)	0
Net income attributable to Turning Point Brands, Inc.	$ 11,641	$ 52,059	$ 38,192
Basic income per common share:
Net income attributable to Turning Point Brands, Inc. (in dollars per share)	$ 0.65	$ 2.75	$ 1.97
Diluted income per common share:
Net income attributable to Turning Point Brands, Inc. (in dollars per share)	$ 0.64	$ 2.52	$ 1.85
Weighted average common shares outstanding:
Basic (in shares)	17,899,794	18,917,570	19,398,474
Diluted (in shares)	18,055,015	22,381,994	22,937,441

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Consolidated Statements of Comprehensive Income [Abstract]
Consolidated net income	$ 11,157	$ 51,262	$ 38,192
Other comprehensive income (loss), net of tax
Amortization of unrealized pension and postretirement gain (loss), net of tax	0	0	1,830
Unrealized (loss) gain on MSA investments, net of tax	(2,879)	(272)	0
Foreign currency translation, net of tax	(269)	260	0
Unrealized gain (loss) on derivative instruments, net of tax	857	2,634	(692)
Other comprehensive income (loss), net of tax	(2,291)	2,622	1,138
Consolidated comprehensive income	8,866	53,884	39,330
Comprehensive loss attributable to non-controlling interest	(577)	(615)	0
Comprehensive income attributable to Turning Point Brands, Inc.	$ 9,443	$ 54,499	$ 39,330

Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Other comprehensive income (loss), net of tax
Amortization of unrealized pension and postretirement gain (loss), tax	$ 0	$ 0	$ 57
Unrealized (loss) gain on MSA investments, tax	860	81	0
Foreign currency translation, tax	0	0	0
Unrealized gain (loss) on derivative instruments, tax	$ 273	$ 813	$ 233

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Cash flows from operating activities:
Consolidated net income	$ 11,157	$ 51,262	$ 38,192
Adjustments to reconcile net income to net cash provided by operating activities:
Gain on extinguishment of debt	(885)	(2,154)	0
Pension settlement and curtailment loss	0	0	1,188
(Gain) loss on sale of property, plant, and equipment	(9)	(54)	123
Impairment loss	0	0	149
Loss on goodwill impairment	25,585	0	0
Loss on intangible asset impairment	1,981	0	0
Loss on investments	13,570	7,100	0
Depreciation expense	3,388	3,105	3,237
Amortization of other intangible assets	1,911	1,907	1,781
Amortization of deferred financing costs	2,576	2,541	2,230
Deferred income taxes	(6,506)	(1,485)	4,742
Stock compensation expense	5,273	7,557	2,554
Noncash lease (income) expense	(29)	(167)	370
Gain on MSA escrow deposits	(54)	(255)	0
Changes in operating assets and liabilities:
Accounts receivable	(2,103)	3,317	(2,112)
Inventories	(32,653)	(9)	(8,004)
Other current assets	4,581	(134)	(5,373)
Other assets	420	996	2,076
Accounts payable	1,240	(2,367)	(5,064)
Accrued postretirement liabilities	0	0	(54)
Accrued liabilities and other	830	(2,943)	7,643
Net cash provided by operating activities	30,273	68,217	43,678
Cash flows from investing activities:
Capital expenditures	(7,685)	(6,156)	(6,135)
Acquisitions, net of cash acquired	0	(16,416)	(39,441)
Payments for investments	(1,000)	(16,657)	(19,250)
Restricted cash, MSA escrow deposits	(10,170)	(19,664)	0
Proceeds on sale of property, plant and equipment	62	54	3
Net cash used in investing activities	(18,793)	(58,839)	(64,823)
Cash flows from financing activities:
Proceeds from Senior Notes	0	250,000	0
Settlement of interest rate swaps	0	(3,573)	0
Payments of Convertible Senior Notes	(9,000)	0	0
Proceeds from call options	51	0	0
Payment of promissory note	0	(9,625)	0
Proceeds from unsecured note	0	0	7,485
Standard Diversified Inc. reorganization, net of cash acquired	0	0	(1,737)
Payment of dividends	(4,250)	(4,096)	(3,802)
Payments of financing costs	0	(6,921)	(194)
Exercise of options	504	2,071	862
Redemption of options	(155)	(2,111)	(1,523)
Surrender of restricted stock	(1,229)	0	0
Common stock repurchased	(29,224)	(38,678)	(10,191)
Net cash provided by (used in) financing activities	(43,303)	57,067	(29,340)
Net (increase) decrease in cash	(31,823)	66,445	(50,485)
Effect of foreign currency translation on cash	(320)	191	0
Cash, beginning of period:
Unrestricted	128,320	41,765	95,250
Restricted	15,155	35,074	32,074
Total cash at beginning of period	143,475	76,839	127,324
Cash, end of period:
Unrestricted	106,403	128,320	41,765
Restricted	4,929	15,155	35,074
Total cash at end of period	111,332	143,475	76,839
Supplemental disclosures of cash flow information:
Cash paid during the period for interest	18,717	12,539	11,455
Cash paid during the period for income taxes, net	13,369	16,063	3,384
Supplemental schedule of noncash financing activities:
Issuance of note payable for acquisition	0	0	10,000
Dividends declared not paid	1,354	1,261	1,099
2018 First Lien Term Loan [Member]
Cash flows from financing activities:
Payments of term loan	0	(130,000)	(16,000)
IVG Note [Member]
Cash flows from financing activities:
Payments of term loan	$ 0	$ 0	$ (4,240)

Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands	Common Stock [Member] Voting [Member]	Additional Paid-In Capital [Member]	Cost of Repurchased Common Stock [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Accumulated Earnings [Member]	Non-Controlling Interest [Member]	Total
Beginning balance at Dec. 31, 2019	$ 197	$ 100,530	$ 0	$ (3,773)	$ (8,872)	$ 0	$ 88,082
Beginning balance (in shares) at Dec. 31, 2019							19,680,673
Unrecognized pension and postretirement cost adjustment, net of tax	0	0	0	1,830	0	0	$ 1,830
Unrealized loss on MSA investments, net of tax							0
Unrealized gain (loss) on derivative instruments, net of tax	0	0	0	(692)	0	0	(692)
Foreign currency translation, net of tax							0
Stock compensation expense	0	2,554	0	0	0	0	2,554
Exercise of options	$ 0	862	0	0	0	0	862
Exercise of options (in shares)	96,005
Redemption of options	$ 0	(1,523)	0	0	0	0	(1,523)
Cost of repurchased common stock	0	0	$ (10,191)	0	0	0	(10,191)
Cost of repurchased common stock (in shares)			(398,670)
Standard Diversified Inc. reorganization, net	$ (2)	0	$ 0	0	(1,735)	0	(1,737)
Standard Diversified Inc. reorganization, net (in shares)	(244,214)
Dividends	$ 0	0	0	0	(3,940)	0	(3,940)
ReCreation acquisition	0	0	0	0	0	4,050	4,050
Net income	0	0	0	0	38,192	0	38,192
Ending balance at Dec. 31, 2020	195	102,423	(10,191)	(2,635)	23,645	4,050	$ 117,487
Ending balance (in shares) at Dec. 31, 2020							19,133,794
Unrecognized pension and postretirement cost adjustment, net of tax							$ 0
Unrealized loss on MSA investments, net of tax	0	0	0	(272)	0	0	(272)
Unrealized gain (loss) on derivative instruments, net of tax	0	0	0	2,634	0	0	2,634
Foreign currency translation, net of tax	0	0	0	78	0	182	260
Stock compensation expense	0	7,557	0	0	0	0	7,557
Exercise of options	$ 2	2,069	0	0	0	0	2,071
Exercise of options (in shares)	158,420
Redemption of options	$ 0	(2,111)	0	0	0	0	(2,111)
Cost of repurchased common stock	0	0	$ (38,678)	0	0	0	(38,678)
Cost of repurchased common stock (in shares)			(896,738)
Acquisition of Recreation Marketing interest	0	(1,127)	$ 0	0	0	(1,123)	(2,250)
Dividends	0	0	0	0	(4,244)	0	(4,244)
Net income	0	0	0	0	52,059	(797)	51,262
Ending balance at Dec. 31, 2021	197	108,811	(48,869)	(195)	71,460	2,312	$ 133,716
Ending balance (in shares) at Dec. 31, 2021							18,395,476
Unrecognized pension and postretirement cost adjustment, net of tax							$ 0
Unrealized loss on MSA investments, net of tax	0	0	0	(2,879)	0	0	(2,879)
Unrealized gain (loss) on derivative instruments, net of tax	0	0	0	857	0	0	857
Foreign currency translation, net of tax	0	0	0	(176)	0	(93)	(269)
Stock compensation expense	0	5,273	0	0	0	0	5,273
Exercise of options	$ 1	503	0	0	0	0	504
Exercise of options (in shares)	35,394
Redemption of options	$ 0	(155)	0	0	0	0	(155)
Issuance of performance based restricted stock units	$ 0	0	0	0	0	0	0
Issuance of performance based restricted stock units (in shares)	69,756
Redemption of performance based restricted stock units	$ 0	(1,141)	0	0	0	0	(1,141)
Issuance of restricted stock units	$ 0	0	0	0	0	0	0
Issuance of restricted stock units (in shares)	5,589
Redemption of restricted stock units	$ 0	(88)	0	0	0	0	(88)
Cost of repurchased common stock	0	0	$ (29,224)	0	0	0	$ (29,224)
Cost of repurchased common stock (in shares)			(1,021,052)				(1,021,052)
Settlement of call options, net of tax	0	39	$ 0	0	0	0	$ 39
Dividends	0	0	0	0	(4,410)	0	(4,410)
Net income	0	0	0	0	11,641	(484)	11,157
Ending balance at Dec. 31, 2022	$ 198	$ 113,242	$ (78,093)	$ (2,393)	$ 78,691	$ 1,735	$ 113,380
Ending balance (in shares) at Dec. 31, 2022							17,485,163

Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) $ in Thousands	12 Months Ended
	Dec. 31, 2022 USD ($)
Consolidated Statements of Changes in Stockholders' Equity [Abstract]
Unrecognized pension and postretirement cost adjustment, tax	$ 0
Unrealized (loss) gain on MSA investments, tax	860
Unrealized gain (loss) on derivative instruments, tax	273
Foreign currency translation, tax	0
Settlement of call options, tax	$ 12

Organizations and Basis of Presentation	12 Months Ended
Organizations and Basis of Presentation	Dec. 31, 2022
Organizations and Basis of Presentation [Abstract]
Organizations and Basis of Presentation	Note 1. Organizations and Basis of Presentation Description of Business Turning Point Brands, Inc. and its Subsidiaries (collectively referred to herein as 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 our next generation products to satisfy evolving consumer preferences. Our three focus segments are led by our core, proprietary brands: Zig-Zag^®andCLIPPER^® in the Zig-Zag Products segment; Stoker’s^® along with Beech-Nut^® and Trophy^® in the Stoker’s Products segment; along with our distribution platforms (Vapor Beast^®, VaporFi^® and Direct Vapor^®) in the NewGen Products segment. The Company’s products are available in more than 217,000 retail outlets in North America. We operate in three segments: (i) Zig-Zag Products, (ii) Stoker’s Products, and (iii) NewGen Products. Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the U.S. (“GAAP”). The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities, disclosure of contingent assets and liabilities as of the dates of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. The Company’s significant estimates include those affecting the valuation of goodwill and other intangible assets, deferred income tax valuation allowances, the valuation of investments and the valuation of inventory, including reserves. Certain prior year amounts have been reclassified to conform to the current year’s presentation. The changes did not have an impact on the Company’s consolidated financial position, results of operations, or cash flows in any of the periods presented.

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2022

Summary of Significant Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Note 2. Summary of Significant Accounting Policies

Consolidation

The consolidated financial statements include the accounts of the Company, its subsidiaries, all of which are wholly owned, and variable interest entities (“VIEs”) for which the Company is considered the primary beneficiary. All significant intercompany transactions have been eliminated.

GAAP requires the Company to identify entities for which control is achieved through means other than voting rights and to determine whether the Company is the primary beneficiary of VIEs. A VIE is broadly defined as an entity with one or more of the following characteristics: (a) the total equity investment at risk is insufficient to finance the entity’s activities without additional subordinated financial support; (b) as a group, the holders of the equity investment at risk lack (i) the ability to make decisions about the entity’s activities through voting or similar rights, (ii) the obligation to absorb the expected losses of the entity, or (iii) the right to receive the expected residual returns of the entity; and (c) the equity investors have voting rights that are not proportional to their economic interests, and substantially all of the entity’s activities either involve, or are conducted on behalf of, an investor that has disproportionately few voting rights. The Company consolidates its investment in a VIE when it determines that it is the VIE’s primary beneficiary. The Company may change its original assessment of a VIE upon subsequent events such as the modification of contractual arrangements that affects the characteristics or adequacy of the entity’s equity investments at risk and the disposition of all or a portion of an interest held by the primary beneficiary.

The primary beneficiary of a VIE is the entity that has both: (i) the power to direct the activities of the VIE that most significantly impact the entity’s economic performance; and (ii) the obligation to absorb losses or the right to receive benefits of the VIE that could be significant to the entity. The Company performs this analysis on an ongoing basis.

Management of the Company has determined that Turning Point Brands Canada (formerly ReCreation Marketing) is a VIE for which the Company is considered the primary beneficiary due to the power the Company has over the activities that most significantly impact the economic performance of Turning Point Brands Canada and the right to receive benefits and the obligation to absorb losses of Turning Point Brands Canada through the Company’s 65% equity interest, additional subordinated financing provided by the Company to Turning Point Brands Canada and the distribution agreement with Turning Point Brands Canada for the sale of the Company’s products that makes up a significant portion of Turning Point Brands Canada’s business activities.

Revenue Recognition

The Company recognizes revenues in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers (Topic 606), which includes excise taxes and shipping and handling charges billed to customers, net of cash discounts for prompt payment, sales returns and sales incentives, upon delivery of goods to the customer—at which time the Company’s performance obligation is satisfied—at an amount that the Company expects to be entitled to in exchange for those goods in accordance with the five-step analysis outlined in Topic 606: (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations, and (v) recognize revenue when (or as) performance obligations are satisfied. The Company excludes from the transaction price, sales taxes and value-added taxes imposed at the time of sale (which do not include excise taxes on smokeless tobacco, cigars, or vaping products billed to customers).

The Company records an allowance for sales returns, based principally on historical volume and return rates, which is included in accrued liabilities on the consolidated balance sheets. The Company records sales incentives, which consist of consumer incentives and trade promotion activities, as a reduction in revenues (a portion of which is based on amounts estimated as being due to wholesalers, retailers and consumers at the end of the period) based principally on historical volume and utilization rates. Expected payments for sales incentives are included in accrued liabilities on the consolidated balance sheets.

A further requirement of ASC 606 is for entities to disaggregate revenue recognized from contracts with customers into categories that depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. Company management views business performance through segments that closely resemble the performance of major product lines. Thus, the primary and most useful disaggregation of the Company’s contract revenue for decision making purposes is the disaggregation by segment which can be found in Note 20, “Segment Information”. An additional disaggregation of contract revenue by sales channel can be found within Note 20 as well.

Derivative Instruments

Foreign Currency Forward Contracts: The Company enters into foreign currency contracts to hedge a portion of its exposure to changes in foreign currency exchange rates on inventory purchase commitments. The Company accounts for its foreign currency contracts under the provisions of ASC 815, Derivatives and Hedging. Under the Company’s policy, the Company may hedge up to 100% of its anticipated purchases of inventory in the denominated invoice currency over a forward period not to exceed twelve months. The Company may also, from time to time, hedge up to 100% of its non-inventory purchases in the denominated invoice currency. Foreign currency contracts that qualify as hedges are adjusted to their fair value through other comprehensive income as determined by market prices on the measurement date. Gains and losses on these foreign currency contracts are transferred from other comprehensive income into inventory as the related inventories are received and are transferred to net income as inventory is sold. Changes in fair value of any contracts that do not qualify for hedge accounting or are not designated as hedges are recognized currently in income.

Interest Rate Swap Agreements: The Company enters into interest rate swap contracts to manage interest rate risk and reduce the volatility of future cash flows. The Company accounts for its interest rate swap contracts under the provisions of ASC 815, Derivatives and Hedging. Swap contracts that qualify as hedges are adjusted to their fair value through other comprehensive income as determined by market prices on the measurement date. Gains and losses on these swap contracts are transferred from other comprehensive income into net income upon settlement of the derivative position or at maturity of the interest rate swap contract. Changes in fair value of any contracts that do not qualify for hedge accounting or are not designated as hedges are recognized currently in income.

Shipping Costs

The Company records shipping costs incurred as a component of selling, general and administrative expenses. Shipping costs incurred were approximately $24.2 million, $27.6 million, and $22.8 million in 2022, 2021, and 2020, respectively.

Research and Development and Quality Assurance Costs

Research and development and quality assurance costs are expensed as incurred. These expenses, classified as selling, general and administrative expenses, were approximately $0.6 million, $1.1 million, and $1.3 million in 2022, 2021, and 2020, respectively.

Cash and Cash Equivalents

The Company considers any highly liquid investments with a maturity of three months or less from the date of purchase to be cash equivalents.

Inventories

Inventories are stated at the lower of cost or net realizable value. Cost was determined using the first-in, first-out (“FIFO”) method. Leaf tobacco is presented in current assets in accordance with standard industry practice, notwithstanding the fact that such tobaccos are carried longer than one year for the purpose of curing.

Property, Plant and Equipment

Property, Plant and Equipment are stated at cost less accumulated depreciation and impairment. Depreciation is provided using the straight-line method over the lesser of the estimated useful lives of the assets or the life of the leases for leasehold improvements (4 to 7 years for machinery, equipment and furniture, 10 to 15 years for leasehold improvements, and up to 15 years for buildings and building improvements). Expenditures for repairs and maintenance are charged to expense as incurred. The costs of major renewals and improvements are capitalized and depreciated over their estimated useful lives. Upon disposition of fixed assets, the costs and related accumulated depreciation amounts are relieved. Any resulting gain or loss is reflected in operations during the period of disposition. Long-lived assets are reviewed for impairment when changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Goodwill and Other Intangible Assets

The Company follows the provisions of ASC 350, Intangibles – Goodwill and Other in accounting for goodwill and other intangible assets. Goodwill is tested for impairment annually on December 31, or more frequently if certain indicators are present, in accordance with ASC 350-20-35 and ASC 350-30-35, respectively.

When testing goodwill for impairment, the Company has the option to first perform qualitative testing to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. If the Company chooses not to complete a qualitative assessment for a given reporting unit or if the initial assessment indicates that it is more likely than not that the carrying value of a reporting unit exceeds its estimated fair value, additional quantitative testing is required. If the carrying value of a reporting unit exceeds its fair value, an impairment loss is recognized in the amount by which the carrying value of the reporting unit exceeds its fair value, limited to the amount of goodwill at the reporting unit. The Company determines fair values for each of the reporting units using a combination of the income approach and/or market approach. Under the income approach, fair value is determined based on the present value of estimated future cash flows, discounted at an appropriate risk-adjusted rate. Under the market approach, the Company selects peer sets based on close competitors and reviews the Revenue and EBITDA multiples to determine the fair value. See Note 10, “Goodwill and Other Intangible Assets” for further information on goodwill.

Indefinite-lived intangible assets are tested for impairment at least annually; however, these tests are performed more frequently when events or changes in circumstances indicate that the asset may be impaired. Impairment exists when carrying value exceeds fair value. The Company’s fair value methodology is primarily based on the relief from royalty approach.

Definite-lived intangible assets are amortized over their estimated useful lives, generally on a straight-line basis for periods ranging primarily from 3.5 to 15 years. The Company continually evaluates the reasonableness of the useful lives of these assets.

Fair Value

GAAP establishes a framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1) and the lowest priority to unobservable inputs (level 3).

The three levels of the fair value hierarchy under GAAP are described below:

•

Level 1 – Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets at the measurement date.

•

Level 2 – Inputs to the valuation methodology include: quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in inactive markets; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from or corroborated by observable market data by correlation or other means.

•

Level 3 – Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date.

Deferred Financing Costs

Deferred financing costs are amortized over the terms of the related debt obligations using the effective interest method. Unamortized amounts are expensed upon extinguishment of the related borrowings. Deferred financing costs are presented as a direct deduction from the carrying amount of that debt liability except for deferred financing costs relating to our revolving credit facility, which are presented as an asset.

Income Taxes

The Company records the effects of income taxes under the liability method in which deferred income tax assets and liabilities are recognized based on the difference between the financial and tax basis of assets and liabilities using the enacted tax rates in effect for the years in which the differences are expected to reverse. The Company assesses its ability to realize future benefits of deferred tax assets by determining if they meet the “more likely than not” criteria in ASC 740, Income Taxes. If the Company determines that future benefits do not meet the “more likely than not” criteria, a valuation allowance is recorded.

Advertising and Promotion

Advertising and promotion costs, including point of sale materials, are expensed as incurred and amounted to $9.3 million, $12.1 million, and $5.2 million for the years ended December 31, 2022, 2021, and 2020, respectively.

Stock-Based Compensation

The Company measures stock-based compensation costs related to its stock options on the fair value-based method under the provisions of ASC 718, Compensation – Stock Compensation. The fair value-based method requires compensation cost for stock options to be recognized over the requisite service period based on the fair value of stock options granted. The Company determined the fair value of these awards using the Black-Scholes option pricing model.

The Company grants performance-based restricted stock units (“PRSU”) subject to both performance-based and service-based vesting conditions. The fair value of each PRSU is the Company’s stock price on the date of grant. For purposes of recognizing compensation expense as services are rendered in accordance with ASC 718, the Company assumes all employees involved in the PRSU grant will provide service through the end of the performance period. Stock compensation expense is recorded based on the probability of achievement of the performance conditions specified in the PRSU grant.

The Company grants restricted stock units (“RSU”) subject to service-based vesting conditions. The fair value of each RSU is the Company’s stock price on the date of grant. The Company recognizes compensation expense as services are rendered in accordance with ASC 718. Stock compensation expense is recorded over the service period in the RSU grant.

Risks and Uncertainties

Manufacturers and sellers of tobacco products are subject to regulation at the federal, state, and local levels. Such regulations include, among others, labeling requirements, limitations on advertising, and prohibition of sales to minors. The tobacco industry is likely to continue to be heavily regulated. There can be no assurance as to the ultimate content, timing, or effect of any regulation of tobacco products by any federal, state, or local legislative or regulatory body, nor can there be any assurance that any such legislation or regulation would not have a material adverse effect on the Company’s financial position, results of operations, or cash flows. In a number of states targeted flavor bans have been proposed or enacted legislatively or through the administrative process. Depending on the number and location of such bans, that legislation or regulation could have a material adverse effect on the Company’s financial position, results of operations or cash flows. The U.S. Food and Drug Administration (“FDA”) continues to consider various restrictive regulations around our products, including targeted flavor bans; however, the details, timing, and ultimate implementation of such measures remain unclear.

The tobacco industry has experienced and is experiencing significant product liability litigation. Most tobacco liability lawsuits have been brought against manufacturers and sellers of cigarettes for injuries allegedly caused by smoking or exposure to smoke. However, several lawsuits have been brought against manufacturers and sellers of smokeless products for injuries to health allegedly caused by use of smokeless products. Typically, such claims assert that use of smokeless products is addictive and causes oral cancer. Additionally, several lawsuits have been brought against manufacturers and distributors of NewGen products due to malfunctioning devices. There can be no assurance the Company will not sustain losses in connection with such lawsuits and that such losses will not have a material adverse effect on the Company’s financial position, results of operations, or cash flows.

Master Settlement Agreement (MSA): Forty-six states, certain U.S. territories, and the District of Columbia are parties to the Master Settlement Agreement (“MSA”) and the Smokeless Tobacco Master Settlement Agreement (“STMSA”). To the Company’s knowledge, signatories to the MSA include 49 cigarette manufacturers and/or distributors. The only signatory to the STMSA is US Smokeless Tobacco Company. In the Company’s opinion, the fundamental basis for each agreement is the states’ consents to withdraw all claims for monetary, equitable, and injunctive relief against certain tobacco products manufacturers and others and, in return, the signatories have agreed to certain marketing restrictions and regulations as well as certain payment obligations.

Pursuant to the MSA and subsequent states’ statutes, a “cigarette manufacturer” (which is defined to also include MYO cigarette tobacco) has the option of either becoming a signatory to the MSA or opening, funding, and maintaining an escrow account, with sub-accounts on behalf of each settling state. The STMSA has no similar provisions. The MSA escrow accounts are governed by states’ statutes that expressly give the manufacturers the option of opening, funding, and maintaining an escrow account in lieu of becoming a signatory to the MSA. The statutes require companies who are not signatories to the MSA to deposit, on an annual basis, into qualified banks, escrow funds based on the number of cigarettes or cigarette equivalents, i.e., the pounds of MYO tobacco, sold. The purpose of these statutes is expressly stated to be to eliminate the cost disadvantage the settling manufacturers have as a result of entering into the MSA. Such companies are entitled to direct the investment of the escrowed funds and withdraw any appreciation, but cannot withdraw the principal for twenty-five years from the year of each annual deposit, except to withdraw funds deposited pursuant to an individual state’s escrow statute to pay a final judgment to that state’s plaintiffs in the event of such a final judgment against the company. Either option – becoming an MSA signatory or establishing an escrow account – is permissible.

The Company chose to open and fund an MSA escrow account as its means of compliance. It is management’s opinion, due to the possibility of future federal or state regulations, though none have to date been enacted, that entering into one or both of the settlement agreements or establishing and maintaining an escrow account would not necessarily prevent future regulations from having a material adverse effect on the results of operations, financial position, and cash flows of the Company.

Various states have enacted or proposed complementary legislation intended to curb the activity of certain manufacturers and importers of cigarettes that are selling into MSA states without signing the MSA or who have failed to properly establish and fund a qualifying escrow account. To the best of the Company’s knowledge, no such statute has been enacted which could inadvertently and negatively impact the Company, which has been, and is currently, fully compliant with all applicable laws, regulations, and statutes. However, there can be no assurance that the enactment of any such complementary legislation in the future will not have a material adverse effect on the results of operations, financial position, or cash flows of the Company.

Pursuant to the MSA escrow account statutes, in order to be compliant with the MSA escrow requirements, companies selling products covered by the MSA are required to deposit such funds for each calendar year into a qualifying escrow account by April 15 of the following year. At December 31, 2022, the Company had on deposit approximately $32.1 million, the fair value of which was approximately $28.0 million. At December 31, 2021, the Company had on deposit approximately $32.1 million, the fair value of which was approximately $31.7 million. The drop in fair value was due to increasing interest rates affecting the fair value of US government securities held in the MSA escrow account. Inputs to the valuation methodology of the MSA escrow deposits when funds are invested include unadjusted quoted prices for identical assets or liabilities in active markets at the measurement date. During 2022, no monies were deposited into this qualifying escrow account. The investment vehicles available to the Company are specified in the state escrow agreements and are limited to low-risk government securities.

The Company discontinued its generic category of MYO in 2019 and its Zig-Zagbranded MYO cigarette smoking tobacco in 2017. Thus, pending a change in MSA legislation, the Company has no remaining product lines covered by the MSA and will not be required to make future escrow deposits.

The Company has chosen to invest a portion of the MSA escrow, from time to time, in U.S. Government securities including TIPS, Treasury notes, and Treasury bonds. These investments are classified as available-for-sale and carried at fair value. Realized losses are prohibited under the MSA; thus, any investment with an unrealized loss position will be held until the value is recovered, or until maturity.

Fair values for the U.S. Governmental agency obligations are Level 2 in the fair value hierarchy. The following tables show cost and estimated fair value of the assets held in the MSA account, respectively, as well as the maturities of the U.S. Governmental agency obligations held in such account for the periods indicated.

	As of December 31, 2022									As of December 31, 2021
			Gross		Gross			Estimated				Gross		Gross			Estimated
			Unrealized		Unrealized			Fair				Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value		Cost		Gains		Losses			Value
Cash and cash equivalents	$	1,929	$	-	$	-		$	1,929	$	12,155	$	-	$	-		$	12,155
U.S. Governmental agency obligations (unrealized position < 12 months)		10,226		-		(1,251	)		8,975		19,918		4		(357	)		19,565
U.S. Governmental agency obligations (unrealized position > 12 months)		19,918		-		(2,842	)		17,076		-		-		-			-
Total	$	32,073	$	-	$	(4,093	)	$	27,980	$	32,073	$	4	$	(357	)	$	31,720

	As of
	December 31, 2022
Less than one year	$	-
One to five years		7,443
Five to ten years		20,746
Greater than ten years		1,955
Total	$	30,144

The following shows the amount of deposits by sales year for the MSA escrow account:

Sales	Deposits as of December 31,
Year	2022		2021
1999	$	211	$	211
2000		1,017		1,017
2001		1,673		1,673
2002		2,271		2,271
2003		4,249		4,249
2004		3,714		3,714
2005		4,553		4,553
2006		3,847		3,847
2007		4,167		4,167
2008		3,364		3,364
2009		1,619		1,619
2010		406		406
2011		193		193
2012		199		199
2013		173		173
2014		143		143
2015		101		101
2016		91		91
2017		82		82

Total	$	32,073	$	32,073

Federal Excise Taxes: Tobacco products, cigarette papers, and cigarette tubes are subject to federal excise taxes.

Any future increases in federal excise taxes on the Company’s products could have a material adverse effect on the results of operations or financial condition of the Company. The Company is unable to predict the likelihood of passage of future increases in federal excise taxes. As of December 31, 2022, federal excise taxes are not assessed on certain novel nicotine products, including nicotine pouches, e-cigarettes and related products.

As of December 31, 2022, approximately half of the states and certain localities impose excise taxes on electronic cigarettes and/or liquid vapor. In addition, there are several local taxing jurisdictions with an excise tax on e-cigarettes. A number of states have begun to enact taxes on other novel nicotine products, such as nicotine pouches, as well. We expect the number of states implementing taxes on new and novel nicotine products to increase. Several states have also implemented additional regulations on new and novel nicotine products, such as licensing requirements.

FDA: On June 22, 2009, the Family Smoking Prevention and Tobacco Control Act (“FSPTCA”) authorized the FDA to immediately regulate the manufacture, sale, and marketing of four categories of tobacco products – cigarettes, cigarette tobacco, roll-your-own tobacco, and smokeless tobacco. On August 8, 2016, the FDA deeming regulation became effective. The deeming regulation gave the FDA the authority to also regulate cigars, pipe tobacco, e-cigarettes, vaporizers, e-liquids, and other nicotine-containing tobacco-derived products as “deemed” tobacco products under the FSPTCA.

The FDA assesses tobacco product user fees on six classes of regulated tobacco products and computes user fees using a methodology similar to the methodology used by the U.S Department of Agriculture to compute the Tobacco Transition Payment Program (“TTPP,” also known as the “Tobacco Buyout”) assessment. First, the total, annual, congressionally established user fee assessment is allocated among the various classes of tobacco products using the federal excise tax weighted market share of tobacco products subject to regulation. Then, the assessment for each class of tobacco products is divided among individual manufacturers and importers.

In August 2016, the FDA’s regulatory authority under the Tobacco Control Act was extended to all tobacco products not previously covered, including: (i) certain NewGen products (such as electronic cigarettes, vaporizers and e-liquids) and their components or parts (such as tanks, coils and batteries); (ii) cigars and their components or parts (such as cigar tobacco); (iii) pipe tobacco; (iv) hookah products; and (v) any other tobacco product “newly deemed” by the FDA. These “deeming regulations” apply to all products made or derived from tobacco intended for human consumption but excluding accessories of tobacco products (such as lighters). Accordingly, the FDA has since regulated our cigar and cigar wrap products as well as our vapor products containing tobacco-derived nicotine and products intended or reasonably expected to be used to consume such e-liquids.

Subsequently, on April 14, 2022, the FDA Center for Tobacco Products also obtained jurisdiction over non-tobacco nicotine products (“NTN Products”), including synthetic nicotine. That law subjects NTN Products to the same requirements as tobacco-derived products, including not selling these products to persons under 21 years of age, not marketing these products as modified risk tobacco products without authorization, and not distributing free samples of these products. Additionally, NTN Products became subject to premarket filing requirements. Under the new law, manufacturers were required to file a PMTA by May 14, 2022, in order to continue selling products currently on the market. NTN Products subject of a timely-filed PMTA, and not in receipt of a negative action, were allowed to remain on the market until July 13, 2022, at which time these products became subject to enforcement, similar to tobacco-derived products remaining under review.

A successful PMTA must demonstrate that the subject product is “appropriate for the protection of public health,” taking into account the effect of the marketing of the product on all sub-populations while a Substantial Equivalence Report must demonstrate that a new product either has the same characteristics as its predicate product or different characteristics but does not raise different questions of public health. We submitted premarket filings prior to the September 9, 2020 deadline for certain of our tobacco and tobacco-derived products, all of which remain under review. We likewise filed premarket submissions for certain of our NTN Products ahead of the May 14, 2022 deadline. We have continued to supplement these applications with additional information; however, there can be no guarantee that the FDA will accept such amendments or that the applications will meet the standard of “appropriate for the protection of public health.” The FDA has indicated its enforcement priority is those applicants who have received negative action on their application, such as a Marketing Denial Order or Refuse to File notification and who continue to illegally sell those unauthorized products, as well as products for which manufacturers failed to submit a marketing application. Despite these stated enforcement priorities, given the FDA’s limited resources we expect that for a period of time there may be a lack of enforcement, which may adversely impact our ability to compete in the marketplace against those who continue to sell unauthorized products. There can be no guarantee that the FDA will not shift its enforcement priorities or that it will increase in ability to enforce against unauthorized products over time.

The FDA has issued a number of rules related to premarket filings; however, those rules were not finalized prior to the September 9, 2020, deadline. On October 5, 2021, the FDA finalized two rules related to the Substantial Equivalence process and the Premarket Tobacco Product Application process, respectively, which both became effective November 4, 2021. Both final rules (collectively, the “Rules”) indicate that any new or additional requirements will not retroactively apply to currently pending PMTAs for tobacco and tobacco-derived products; however, the information outlined in the rule remains important to the FDA’s substantive review of an application. The FDA has yet to indicate how it might apply these Rules to NTN Product filings. We believe we have products that meet the Rules and have filed premarket filings supporting a showing of the respective required standards. However, there is no assurance that the FDA’s guidance or regulations will not change, or that the FDA will not prioritize its enforcement in a manner that negatively affects our pending applications, or that unforeseen circumstances will not arise that prevent us from sufficiently supplementing or completing our applications or otherwise increases the amount of time and money we are required to spend to receive all necessary marketing orders. Although we filed many premarket applications in a timely manner, no assurance can be given that the applications will ultimately be successful. This may result in the prioritization of supplementing or completing applications for high priority SKUs in our inventory position, which could adversely impact future revenues generated by lower priority SKUs.

In addition, we currently distribute many third-party manufactured vapor products for which we are completely dependent on the manufacturer complying with the premarket filing requirements. There can be no assurance that these third-party products will receive a marketing order or otherwise remain in compliance with relevant legal requirements. While we will take measures to pursue regulatory compliance for our own privately-branded or proprietary vape products that compete with these third-party products, there is no assurance that such proprietary products would be as successful in the marketplace or can fully displace third-party products that are currently being distributed by us, which could adversely affect our results of operations and liquidity. For a period of time after the filing deadline, we expect there to be a lack of enforcement, which may adversely affect our ability to compete in the marketplace against those who continue to sell unauthorized products.

On May 4, 2022, the FDA proposed two tobacco product standards related to combusted tobacco products: (1) a ban on menthol as a characterizing flavor in cigarettes; and (2) a ban on all characterizing flavors (including menthol) in cigars. On June 21, 2022, the FDA also issued a proposed product standard related to restricting the level of nicotine in traditional cigarettes. These product standards are required to go through the formal rulemaking process where we have the opportunity to comment on the proposed rule with regard to any impact on any of our products. The FDA’s policy on these and other regulated products may change or expand over time in ways not yet known and may significantly impact our products or our premarket filings.

Prevent All Cigarette Trafficking Act (“PACT Act”): On December 27, 2020, the PACT Act as part of the Further Consolidated Appropriations Act, 2021, was signed into law. This law included an amendment to the Jenkins Act expanding the definition of “cigarette” to include “electronic nicotine delivery systems,” or ENDS, and required that the U.S. Postal Service (“USPS”) promulgate regulations clarifying the applicability of the prohibition on delivery sales of cigarettes to ENDS. USPS issued its final rule on October 21, 2021. We have received appropriate shipping exemptions from carrier services we use to carry the affected freight. Failure to comply with the PACT Act could result in significant financial or criminal penalties. To the extent we are unable to respond to, or comply with, these new requirements, we could lose our shipping exemptions, be subject to civil or criminal penalties, or there could be a material adverse effect on our business, results of operations and financial condition.

Concentration of Credit Risk: At December 31, 2022 and 2021, the Company had bank deposits, including MSA escrow accounts, in excess of federally insured limits of approximately $105.2 million and $137.2 million, respectively. During 2022 and 2021, the Company invested a portion of the MSA escrow accounts in U.S. Government securities including TIPS, Treasury notes, and Treasury bonds.

The Company sells its products to distributors, retail establishments, and consumers throughout the U.S. and also sells Zig-Zag^® premium cigarette papers in Canada and some smaller quantities in other countries. The Company had no customers that accounted for more than 10% of net sales for 2022, 2021, or 2020. The Company performs periodic credit evaluations of its customers and generally does not require collateral on trade receivables. Historically, the Company has not experienced significant credit losses.

Accounts Receivable

Accounts receivable are recognized at their net realizable value. All accounts receivable are trade related, recorded at the invoiced amount, and do not bear interest. The Company maintains allowances for doubtful accounts receivable for estimated uncollectible invoices resulting from a customer’s inability to pay (bankruptcy, out of business, etc., i.e. “bad debt” which results in write-offs). The activity of allowance for doubtful accounts during 2022 and 2021 is as follows:

	December 31,			December 31,
	2022			2021
Balance at beginning of period	$	262		$	150
Additions to allowance account during period		191			237
Deductions of allowance account during period		(339	)		(125	)
Balance at end of period	$	114		$	262

Acquisitions

12 Months Ended

Dec. 31, 2022

Acquisitions [Abstract]

Acquisitions

Note 3. Acquisitions

Unitabac

In July 2021, the Company acquired certain assets of Unitabac, a marketer of mass-market cigars, for $10.7 million in total consideration, comprised of $9.6 million in cash and $1.1 million of capitalized transaction costs. The acquired assets are comprised of a portfolio of cigarillo products and all related intellectual property, including Cigarillo Non-Tip (“NT”) Homogenized Tobacco Leaf (“HTL”) products and Rolled Leaf and Natural Leaf Cigarillo Products. The transaction was accounted for as an asset purchase with $10.0 million assigned to intellectual property, which has an indefinite life, and $0.7 million assigned to inventory. The intellectual property asset is deductible for tax purposes.

Direct Value Wholesale

In April 2021, Turning Point Brands Canada, a VIE for which the Company is considered the primary beneficiary, purchased 100% of the equity interests of Westhem Ventures LTD d/b/a Direct Value Wholesale (“DVW”) for $3.9 million, net of cash acquired, with $3.5 million paid in cash at closing and $0.5 million in accrued consideration paid during 2021. DVW is a Canadian distribution entity that operates in markets not primarily served by Turning Point Brands Canada. The acquisition expands Turning Point Brands Canada’s markets in Canada. On April 13, 2021, in connection with the acquisition of DVW, the Company provided a $3.7 million unsecured loan to Turning Point Brands Canada bearing interest at 8% per annum and maturing April 13, 2023. The unsecured loan is eliminated in the consolidation of Turning Point Brands Canada. The following table summarizes the consideration transferred and calculation of goodwill based on excess of the acquisition price over the estimated fair value of the identifiable net assets acquired:

Total consideration transferred	$	3,462
Adjustments to consideration transferred:
Cash acquired		(43	)
Accrued consideration		472
Adjusted consideration transferred		3,891
Assets acquired:
Working capital (primarily AR and inventory)		1,334
Fixed assets and Other long term assets		27
Net assets acquired	$	1,361

Goodwill	$	2,530

The goodwill of $2.5 million consists of the synergies expected from combining the operations and is deductible for tax purposes.

Turning Point Brands Canada

In July 2021, the Company invested an additional $2.3 million in Turning Point Brands Canada increasing its ownership interest to 65%. The Company received board seats aligned with its ownership position. The Company has determined that Turning Point Brands Canada continues to be a VIE due to its required subordinated financial support. The Company has determined it remains the primary beneficiary due to its 65% equity interest, additional subordinated financing and distribution agreement with Turning Point Brands Canada for the sale of the Company’s products. As a result of the Company remaining the primary beneficiary, the increase in ownership interest resulted in a decrease in Non-controlling interest of $1.1 million and a decrease in Additional paid-in capital of $1.1 million.

Derivative Instruments	12 Months Ended
Derivative Instruments	Dec. 31, 2022
Derivative Instruments [Abstract]
Derivative Instruments	Note 4. Derivative Instruments Foreign Currency The Company’s policy is to manage the risks associated with foreign exchange rate movements. The policy allows hedging up to 100% of its anticipated purchases of inventory over a forward period that will not exceed 12 rolling and consecutive months. The Company may, from time to time, hedge currency for non-inventory purchases, e.g., production equipment, not to exceed 90% of the purchase price. During 2022, the Company executed various foreign exchange contracts, which met hedge accounting requirements for the purchase of €28.9 million and sale of €28.9 million. The Company did not execute any foreign exchange contracts during 2021. At December 31, 2022, the Company had foreign currency contracts for the purchase of €18.5 million and sale of €18.5 million. The foreign currency contracts’ fair value at December 31, 2022, resulted in an asset of $1.2 million included in Other current assets and a liability of $0.0 million included in Accrued liabilities. At December 31, 2021, the Company had no forward contracts. Losses of $0.1 million were reclassified from Accumulated other comprehensive loss to Cost of sales for the years ended December 31, 2022. There were no amounts reclassified from Accumulated other comprehensive loss in 2021 or 2020. Interest Rate Swaps The Company’s policy is to manage interest rate risk by reducing the volatility of future cash flows associated with debt instruments bearing interest at variable rates. In 2018, the Company executed various interest rate swap agreements for a notional amount of $70 million with an expiration of December 2022. The swap agreements fixed LIBOR at 2.755%. The swap agreements met the hedge accounting requirements; thus, any change in fair value was recorded to other comprehensive income. The Company uses the Shortcut Method to account for the swap agreements. The Shortcut Method assumes the hedge to be perfectly effective. Losses of $0.1 million and $1.5 million were reclassified into interest expense for the years ended December 31, 2021 and 2020, respectively. The Company terminated the interest rate swap agreements in conjunction with the prepayment of all outstanding amounts under the 2018 First Lien Credit Facility (as defined below) in the first quarter of 2021 with an early termination payment made by the Company in the amount of $3.6 million which was reclassified out of accumulated other comprehensive loss into loss on extinguishment of debt.

Fair Value of Financial Instruments	12 Months Ended
Fair Value of Financial Instruments	Dec. 31, 2022
Fair Value of Financial Instruments [Abstract]
Fair Value of Financial Instruments	Note 5. Fair Value of Financial Instruments The estimated fair value amounts have been determined by the Company using the methods and assumptions described below. However, considerable judgment is required to interpret market data to develop estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company could realize in a current market exchange. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts. Cash and Cash Equivalents Cash and cash equivalents are, by definition, short-term. Thus, the carrying amount is a reasonable estimate of fair value. Accounts Receivable The fair value of accounts receivable approximates their carrying value due to their short-term nature. Long-Term Debt The Company’s Senior Secured Notes (as defined below) bear interest at a rate of 5.625% per year. As of December 31, 2022, the fair value approximated $226.4 million, with a carrying value of $250 million. As of December 31, 2021, the fair value approximated $250 million with a carrying value of $250 million. The Convertible Senior Notes bear interest at a rate of 2.50% per year. As of December 31, 2022, the fair value approximated $139.2 million, with a carrying value of $162.5 million. As of December 31, 2021, the fair value approximated $159.8 million, with a carrying value of $172.5 million. See Note 13, “Notes Payable and Long-Term Debt”, for further information regarding the Company’s long-term debt. Foreign Exchange At December 31, 2022, the Company had foreign currency contracts for the purchase of €18.5 million and sale of €18.5 million. The fair value of the foreign exchange contracts are based upon quoted market prices for similar instruments, thus leading to a Level 2 classification within the fair value hierarchy, and resulted in an asset of $1.2 million and a liability of $0.0 million as of December 31, 2022. At December 31, 2021, the Company had no foreign currency contracts. As there were no open contracts as of December 31, 2021, there is no resulting balance sheet position related to the fair value.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Inventories

12 Months Ended

Dec. 31, 2022

Inventories [Abstract]

Inventories

Note 6. Inventories

The components of inventories are as follows:

	December 31,		December 31,
	2022		2021
Raw materials and work in process	$	7,283	$	6,936
Leaf tobacco		43,468		35,900
Finished goods - Zig-Zag Products		42,279		25,663
Finished goods - Stoker’s Products		9,667		8,959
Finished goods - NewGen Products		15,431		8,591
Other		1,787		1,558
Inventories	$	119,915	$	87,607

The following represents the inventory valuation allowance roll-forward, for the years ended December 31:

	2022			2021
Balance at beginning of period	$	(7,668	)	$	(9,924	)
Charged to cost and expense		(987	)		(2,795	)
Deductions for inventory disposed		4,122			5,051
Balance at end of period	$	(4,533	)	$	(7,668	)

Other Current Assets

12 Months Ended

Dec. 31, 2022

Other Current Assets [Abstract]

Other Current Assets

Note 7. Other Current Assets

Other current assets consists of:

	December 31,		December 31,
	2022		2021
Inventory deposits	$	6,395	$	12,091
Insurance deposit		3,000		3,000
Prepaid taxes		448		-
Other		13,116		11,655
Total	$	22,959	$	26,746

Property, Plant and Equipment, Net

12 Months Ended

Dec. 31, 2022

Property, Plant and Equipment, Net [Abstract]

Property, Plant and Equipment, Net

Note 8. Property, Plant and Equipment, Net

Property, plant and equipment consists of:

	December 31,			December 31,
	2022			2021
Land	$	22		$	22
Buildings and improvements		3,096			3,096
Leasehold improvements		5,404			5,374
Machinery and equipment		25,832			19,591
Furniture and fixtures		9,264			9,402
Gross property, plant and equipment		43,618			37,485
Accumulated depreciation		(20,830	)		(18,835	)
Net property, plant and equipment	$	22,788		$	18,650

Deferred Financing Costs, Net

12 Months Ended

Dec. 31, 2022

Deferred Financing Costs, Net [Abstract]

Deferred Financing Costs, Net

Note 9. Deferred Financing Costs, Net

Deferred financing costs relating to the 2021 Revolving Credit Facility consist of:

	December 31,		December 31,
	2022		2021
Deferred financing costs, net of accumulated amortization of $200 and $94, respectively	$	282	$	388

Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2022

Goodwill and Other Intangible Assets [Abstract]

Goodwill and Other Intangible Assets

Note 10. Goodwill and Other Intangible Assets

The following table summarizes goodwill by segment:

	Zig-Zag			Stoker’s		NewGen			Total
Balance as of December 31, 2020	$	101,446		$	32,590	$	25,585		$	159,621

Acquisitions		2,530			-		-			2,530
Cumulative translation adjustment		182			-		-			182
Balance as of December 31, 2021	$	104,158		$	32,590	$	25,585		$	162,333

Acquisitions		-			-		-			-
Impairment		-			-		(25,585	)		(25,585	)
Cumulative translation adjustment		(495	)		-		-			(495	)
Balance as of December 31, 2022	$	103,663		$	32,590	$	-		$	136,253

The Company tests goodwill for impairment annually during the fourth quarter, or more frequently when events or changes in circumstances indicate that the fair value is below its carrying value.

The Company performed quantitative testing on its NewGen reporting unit as of December 31, 2022, using a combination of the income approach utilizing Level 3 unobservable inputs and the market approach. Based on the analysis performed the Company concluded that the carrying amount of the reporting unit exceeded its fair value resulting in a non-cash goodwill impairment charge of $25.6 million included in Goodwill and intangible impairment loss for the year ended December 31, 2022. Continued regulatory uncertainty in the vape industry, along with revised views of recovery in the vape industry based on a leadership change in the fourth quarter 2022, resulted in the impairment.

The Company performed quantitative testing on its two remaining reporting units as part of its annual impairment test and determined that no further goodwill impairments existed. For the quantitative assessment, the Company used a combination of discounted cash flow models (income approach) utilizing Level 3 unobservable inputs and the Guideline Public Company Method (market approach). The Company’s significant assumptions in these analyses include, but are not limited to, projected revenue, the weighted average cost of capital, the terminal growth rate, derived multiples from comparable market transactions and other market data.

The Company’s goodwill impairment analysis referenced above used the discounted cash flow model (income approach) utilizing Level 3 unobservable inputs. The Company’s significant assumptions in this analysis included, but were not limited to, future cash flow projections, the weighted average cost of capital, the terminal growth rate, and the tax rate. The Company’s estimates of future cash flows are based on current regulatory and economic climates, recent operating results, and planned business strategies. These estimates could be negatively affected by changes in federal, state, or local regulations or economic downturns. Future cash flow estimates are, by their nature, subjective and actual results may differ materially from the Company’s estimates. If the Company’s ongoing estimates of future cash flows are not met or if discount rates change, the Company may have to record additional impairment charges in future periods. The Company also used the Guideline Public Company Method (market approach). The significant assumptions used in this analysis include, but are not limited to, the derived multiples from comparable market transactions and other market data. The selection of comparable businesses is based on the markets in which the reporting unit operates giving consideration to risk profiles, size, geography, and diversity of products. The Company probability-weighted scenarios for both the income and market approaches and also applied an overall probability-weighting to the income and market approaches to determine the concluded fair value of the reporting unit given the uncertainty in the current economic environment to determine the concluded fair value of the reporting unit. The Company believes the current assumptions and estimates utilized in the income and market approaches are both reasonable and appropriate.

The following tables summarize information about the Company’s other intangible assets. Gross carrying amounts of unamortized, indefinite-lived intangible assets are shown below:

	December 31, 2022								December 31, 2021
	Zig-Zag		Stoker’s		NewGen		Total		Zig-Zag		Stoker’s		NewGen		Total
Unamortized, indefinite life intangible assets:
Trade names	$	-	$	8,500	$	9,162	$	17,662	$	-	$	8,500	$	10,786	$	19,286
Formulas		52,217		53		-		52,270		52,217		53		-		52,270
Total	$	52,217	$	8,553	$	9,162	$	69,932	$	52,217	$	8,553	$	10,786	$	71,556

In the fourth quarter 2022, based on its annual impairment testing the fair value of the trade name in the NewGen segment was less than its carrying amount resulting in an impairment of $1.6 million included in Goodwill and intangible impairment loss for the year ended December 31, 2022. The circumstances giving rise to this impairment are consistent with those resulting in the NewGen goodwill impairment discussed above. As a result of such circumstance, as of January 1, 2023 the Company will begin to amortize this trade name over its estimated useful life of 15 years and transferred the asset to amortized intangible assets consistent with its other trade names.

Amortized intangible assets consists of:

	Zig-Zag								Stoker’s								NewGen
	December 31, 2022				December 31, 2021				December 31, 2022				December 31, 2021				December 31, 2022				December 31, 2021
	Gross		Accumulated		Gross		Accumulated		Gross		Accumulated		Gross		Accumulated		Gross		Accumulated		Gross		Accumulated
	Carrying		Amortization		Carrying		Amortization		Carrying		Amortization		Carrying		Amortization		Carrying		Amortization		Carrying		Amortization
Amortized intangible assets:
Customer relationships (useful life of 8-10 years)	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	6,936	$	4,768	$	6,936	$	3,939
Trade names (useful life of 15 years)		-		-		-		-		2,372		475		2,372		316		7,158		2,137		7,158		1,677
Master distribution agreement (useful life of 15 years)		5,489		915		5,489		549		-		-		-		-		-		-		-		-
Franchise agreements (useful life of 8 years)		-		-		-		-		-		-		-		-		780		780		780		325
Non-compete agreements (useful life of 3.5 years)		-		-		-		-		-		-		-		-		100		100		100		100
Total	$	5,489	$	915	$	5,489	$	549	$	2,372	$	475	$	2,372	$	316	$	14,974	$	7,785	$	14,974	$	6,041

In the fourth quarter 2022, the Company recorded an asset impairment charge of $0.3 million related to the franchise agreements intangible asset within the NewGen segment included in Goodwill and intangible impairment loss for the year ended December 31, 2022. The Company exited the franchise business and determined that the intangible asset was fully impaired.

Annual amortization expense for the next five years is estimated to be approximately $2.2 million for 2023 and 2024 and $1.6 million for 2025 through 2027, assuming no additional transactions occur that require the amortization of intangible assets.

Other Assets

12 Months Ended

Dec. 31, 2022

Other Assets [Abstract]

Other Assets

Note 11. Other Assets

Other assets consists of:

	December 31,		December 31,
	2022		2021
Equity investments	$	13,376	$	25,649
Debt security investment		7,820		8,000
Other		1,453		1,750
Total	$	22,649	$	35,399

The Company records its equity investments without a readily determinable fair value, that are not accounted for under the equity method, at cost, with adjustments for impairment and observable price changes.

Equity Investments

In April 2022, the Company invested $8.7 million in Docklight Brands, Inc., a pioneering consumer products company with celebrated brands including Marley Natural® cannabis and Marley™ CBD. The Company has additional follow-on investment rights. As part of the investment, the Company has obtained exclusive U.S. distribution rights for Docklight’s Marley™ CBD topical products. Purchases of inventory from Docklight Brands, Inc. were $0.1 million and $0.0 million in 2022 and 2021, respectively. There were no amounts payable to Docklight Brands, Inc. at December 31, 2022 and 2021.

In October 2020, the Company acquired a 20% stake in Wild Hempettes LLC (“Wild Hempettes”), a leading manufacturer of hemp cigarettes under the WildHemp™ and Hempettes™ brands, for $2.5 million. The Company has options to increase its stake to a 100% ownership position based on certain milestones. As part of the transaction, the Wild Hempettes joint venture was spun off from Crown Distributing LLC and formed as a vehicle for the Company to be the exclusive distributor of Hempettes™ to U.S. bricks and mortar retailers under a profit-sharing arrangement. The Company has provided Wild Hempettes with a secured line of credit up to $2.0 million with a term up to 5 years. The Company accounts for its investment in Wild Hempettes as an equity method investment. The Company recorded investment loss of $0.1 million and income $0.1 million for years ended December 31, 2022 and 2021, respectively. Purchases of inventory from Wild Hempettes was $0.4 million and $2.1 million in 2022 and 2021, respectively. There were no amounts payable to Wild Hempettes at December 31, 2022 and 2021.

In October 2020, the Company invested $15.0 million in dosist^TM, a global cannabinoid company. The Company received a warrant exercisable for preferred shares of dosist^TM that will automatically be exercised upon the changing of certain federal cannabis laws in the U.S., rescheduling cannabis and/or permitting the general cultivation, distribution and possession of cannabis in the U.S.. In the fourth quarter 2021, based on the financial results of dosist^TM and the overall cannabinoid market, the Company deemed our investment was impaired resulting in the fair value of our investment decreasing to $7.9 million resulting in a loss of $7.1 million which was recorded in investment loss for the year ended December 31, 2021. In the second and fourth quarters of 2022, based on contemplated sales of the assets of dosist^TM, the Company deemed its investment was impaired resulting in decreasing of the fair value of the investment to $1.6 million and $0.0, respectively. These impairments resulted in a loss of $7.9 million which is recorded in investment loss for the year ended December 31, 2022. Fair value was determined using a valuation derived from a relevant market index (Level 2) and relevant revenue multiples (Level 3). The valuations were probability weighted based on anticipated outcomes. Given the significance of the Level 3 input to the valuation, the Company has determined that the non-recurring valuation resulted in a Level 3 classification within the fair value hierarchy. There were no purchases of inventory from dosist^TM in 2022 or 2021.

In October 2020, the Company invested $1.8 million in BOMANI Cold Buzz, LLC (“BOMANI”), a manufacturer of alcohol-infused cold brew coffee. The Company received rights to receive equity in BOMANI in the event of an equity financing. There were no purchases of inventory from BOMANI in 2022 or 2021.

The Company has a minority ownership position in Canadian American Standard Hemp (“CASH”). CASH is headquartered in Warwick, Rhode Island, and manufactures cannabidiol isolate (“CBD”) developed through highly efficient and proprietary processes. In October 2020, CASH merged with Real Brands, Inc. (“Real Brands”), an over the counter traded shell company. CASH continued business under the Real Brands name. The Company maintained its ownership position in Real Brands subsequent to the merger. In the fourth quarter 2022, as a result of a significant decline in the enterprise value, the Company determined that the fair value of the investment was $0.0 and fully impaired the investment. The impairment resulted in a loss of $4.3 million which is recorded in investment loss for the year ended December 31, 2022. There were no purchases of inventory from Real Brands in 2022 or 2021. There were no amounts payable to Real Brands at December 31, 2022 and 2021.

In December 2018, the Company acquired a minority ownership position in General Wireless Operations, Inc. (d/b/a RadioShack; “RadioShack”) from 5G gaming LLC for $0.4 million. There were no amounts payable to General Wireless Operations, Inc. at December 31, 2022 and 2021.

Debt Security Investment

In July 2021, the Company invested $8.0 million in Old Pal Holding Company LLC (“Old Pal”). In July 2022, the Company invested an additional $1.0 million in Old Pal. The Company invested in the form of a convertible note which includes additional follow-on investment rights. The accrued interest of $0.2 million was rolled into the note in July 2022 resulting in a total investment of $9.2 million. Old Pal is a leading brand in the cannabis lifestyle space that operates a non-plant touching licensing model. The convertible note bears an interest rate of 3.0% per year and matures July 31, 2026. Interest and principal are receivable at maturity. Old Pal has the option to extend the maturity date in one-year increments. The interest rate is subject to change based on sales levels of Old Pal meeting certain thresholds. The weighted average interest rate was 3.0% for the year ended December 31, 2022. Old Pal has the option to convert the note into shares once sales reach a certain threshold. The conditions required to allow Old Pal to convert the note were not met as of December 31, 2022. Additionally, the Company has the right to convert the note into shares at any time after January 1, 2022. The Company has classified the debt security with Old Pal as available for sale. The Company records the debt security at fair value and includes unrealized gains and losses recorded in stockholders’ equity as a component of accumulated other comprehensive income on our Consolidated Balance Sheets. The Company reports interest income on available for sale debt securities, in interest income in our Consolidated Statements of Income. Quarterly, we perform a qualitative assessment to determine if the fair value of the investment could be less than the amortized cost basis. The fourth quarter 2022 qualitative assessment determined that the fair value of the investment could be less than the amortized cost basis and therefore the Company performed a quantitative assessment of the fair value of the investment. The fair value as of December 31, 2022 was determined to be $7.9 million based on a Monte Carlo simulation (Level 3). The Company determined that the impairment was a result of credit related factors and, as such, recorded an allowance for credit losses of $1.4 million which is included in investment loss for the year ended December 31, 2022. The Company has recorded accrued interest receivable of $0.1 million at December 31, 2022, in other current assets on our Consolidated Balance Sheets.

Accrued Liabilities

12 Months Ended

Dec. 31, 2022

Accrued Liabilities [Abstract]

Accrued Liabilities

Note 12. Accrued Liabilities

Accrued liabilities consists of:

	December 31,		December 31,
	2022		2021
Accrued payroll and related items	$	7,685	$	6,974
Customer returns and allowances		7,291		6,497
Taxes payable		1,867		2,053
Lease liabilities		3,102		2,976
Accrued interest		7,277		7,318
Other		5,779		7,119
Total	$	33,001	$	32,937

Notes Payable and Long-Term Debt

12 Months Ended

Dec. 31, 2022

Notes Payable and Long-Term Debt [Abstract]

Notes Payable and Long-Term Debt

Note 13. Notes Payable and Long-Term Debt

Notes payable and long-term debt consists of the following in order of preference:

	December 31,			December 31,
	2022			2021
Senior Secured Notes	$	250,000		$	250,000
Convertible Senior Notes		162,500			172,500
Gross notes payable and long-term debt		412,500			422,500
Less deferred finance charges		(5,743	)		(8,328	)
Net notes payable and long-term debt	$	406,757		$	414,172

Senior Secured Notes

On February 11, 2021, the Company closed a private offering (the “Offering”) of $250 million aggregate principal amount of its 5.625% senior secured notes due 2026 (the “Senior Secured Notes”). The Senior Secured Notes bear interest at a rate of 5.625% and will mature on February 15, 2026. Interest on the Senior Secured Notes is payable semi-annually in arrears on February 15 and August 15 of each year, commencing on August 15, 2021. The Company used the proceeds from the Offering to (i) repay all obligations under and terminate the 2018 First Lien Credit Facility, (ii) pay related fees, costs, and expenses and (iii) for general corporate purposes.

Obligations under the Senior Secured Notes are guaranteed by the Company’s existing and future wholly-owned domestic subsidiaries (the “Guarantors”) that guarantee any Credit Facility (as defined in the Indenture governing the Senior Secured Notes or the “Senior Secured Notes Indenture”), including the 2021 Revolving Credit Facility, or capital markets debt securities of the Company or Guarantors in excess of $15.0 million. The Senior Secured Notes and the related guarantees are secured by first-priority liens on substantially all of the assets of the Company and the Guarantors, subject to certain exceptions.

The Company may redeem the Senior Secured Notes, in whole or in part, at any time prior to February 15, 2023, at the redemption prices (expressed as a percentage of the principal amount to be redeemed) set forth below, plus accrued and unpaid interest, if any, on the Senior Secured Notes to be redeemed to (but not including) the applicable redemption date if redeemed during the period indicated below:

On or after February 15, 2023	102.813	%
On or after February 15, 2024	101.406	%
On or after February 15, 2025 and thereafter	100.000	%

If the Company experiences a change of control (as defined in the Senior Secured Notes Indenture), the Company must offer to repurchase the Senior Secured Notes at a repurchase price equal to 101% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest.

The Indenture contains covenants that, among other things, limit the ability of the Company and its restricted subsidiaries to: (i) grant or incur liens; (ii) incur, assume or guarantee additional indebtedness; (iii) sell or otherwise dispose of assets, including capital stock of subsidiaries; (iv) make certain investments; (v) pay dividends, make distributions or redeem or repurchase capital stock; (vi) engage in certain transactions with affiliates; and (vii) consolidate or merge with or into, or sell substantially all of our assets to another entity. These covenants are subject to a number of limitations and exceptions set forth in the Indenture. See Note 22, “ Dividends and Share Repurchases”, for further information regarding dividend restrictions. The Indenture provides for customary events of default.

The Company incurred debt issuance costs attributable to the issuance of the Senior Secured Notes of $6.4 million which are amortized to interest expense using the effective interest method over the expected life of the Senior Secured Notes.

2021 Revolving Credit Facility

In connection with the Offering, the Company also entered into a new $25 million senior secured revolving credit facility (the “2021 Revolving Credit Facility”) with the lenders party thereto (the “Lenders”) and Barclays Bank PLC, as administrative agent and collateral agent (in such capacity, the “Agent”). The 2021 Revolving Credit Facility provides for a revolving line of credit of up to $25.0 million. Letters of credit are limited to $10 million (and are a part of, and not in addition to, the revolving line of credit). The Company has not drawn any borrowings under the 2021 Revolving Credit Facility but does have letters of credit of approximately $3.6 million outstanding under the facility. The 2021 Revolving Credit Facility will mature on August 11, 2025 if none of the Company’s Convertible Senior Notes are outstanding, and if any Convertible Senior Notes are outstanding, the date which is 91 days prior to the maturity date of July 15, 2024 for such Convertible Senior Notes.

Interest is payable on the 2021 Revolving Credit Facility at a fluctuating rate of interest determined by reference to the Eurodollar rate plus an applicable margin of 3.50% (with step-downs upon de-leveraging). The Company also has the option to borrow at a rate determined by reference to the base rate.

The obligations under the 2021 Revolving Credit Agreement are guaranteed on a joint and several basis by the Guarantors. The Company’s and Guarantors’ obligations under the 2021 Revolving Credit Facility are secured on a pari passu basis with the Senior Secured Notes.

The 2021 Revolving Credit Agreement contains covenants that are substantially the same as the covenants in the Senior Secured Notes Indenture. The 2021 Revolving Credit Facility also requires the maintenance of a Consolidated Leverage Ratio (as defined in the 2021 Revolving Credit Agreement) of 5.50 to 1.00 (with a step down to 5.25 to 1.00 beginning with the fiscal quarter ending March 31, 2023) at the end of each fiscal quarter when extensions of credit under the 2021 Revolving Credit Facility and certain drawn and undrawn letters of credit (excluding (a) letters of credit that have been cash collateralized and (b) letters of credit having an aggregate face amount less than $5,000,000) in the aggregate outstanding exceeds 35% of the total commitments under the 2021 Revolving Credit Facility. The 2021 Revolving Credit Agreement provides for customary events of default.

The Company incurred debt issuance costs attributable to the issuance of the 2021 Revolving Credit Facility of $0.5 million which are amortized to interest expense using the effective interest method over the expected life of the 2021 Revolving Credit Facility.

2018 Credit Facility

On March 7, 2018, the Company entered into $250 million of credit facilities consisting of a $160 million 2018 First Lien Term Loan and a $50 million 2018 Revolving Credit Facility (collectively, the “2018 First Lien Credit Facility”), in each case, with Fifth Third Bank, as administrative agent, and other lenders, in addition to a $40 million 2018 Second Lien Term Loan (the “2018 Second Lien Credit Facility,” and, together with the 2018 First Lien Credit Facility, the “2018 Credit Facility”) with Prospect Capital Corporation, as administrative agent, and other lenders. The 2018 Credit Facility contained a $40 million accordion feature. In the first quarter 2021, the Company used a portion of the proceeds from the issuance of the Senior Secured Notes to prepay all outstanding amounts under and terminate the 2018 First Lien Credit Facility in the amount of $130.0 million, and the transaction resulted in a $5.7 million loss on extinguishment of debt, which includes a $3.6 million loss from the early termination of the interest rate swap agreement.

Convertible Senior Notes

In July 2019 the Company closed an offering of $172.5 million in aggregate principal amount of its 2.50% Convertible Senior Notes due July 15, 2024 (the “Convertible Senior Notes”). The Convertible Senior Notes bear interest at a rate of 2.50% per year, payable semiannually in arrears on January 15 and July 15 of each year, beginning on January 15, 2020. The Convertible Senior Notes will mature on July 15, 2024, unless earlier repurchased, redeemed or converted. The Convertible Senior Notes are senior unsecured obligations of the Company.

In the fourth quarter 2022 a wholly owned subsidiary of the Company purchased $10.0 million in aggregate principal of its Convertible Senior Notes on the open market for $9.0 million that remain in the Treasury and may be redeemed subject to compliance with applicable securities law. The transaction resulted in a $0.9 million gain on extinguishment of debt. As of December 31, 2022, $162.5 million aggregate principal remains outstanding. The Convertible Senior Notes are convertible into approximately 3,029,699 shares of our voting common stock under certain circumstances prior to maturity at a conversion rate of 18.6443 shares per $1,000 principal amount of the Convertible Senior Notes, which represents a conversion price of approximately $53.64 per share, subject to adjustment under certain conditions, but will not be adjusted for any accrued and unpaid interest. Upon conversion, the Company may pay cash, shares of common stock or a combination of cash and stock, as determined by the Company at its discretion. The conditions required to allow the holders to convert their Convertible Senior Notes were not met as of December 31, 2022.

The Company incurred debt issuance costs attributable to the Convertible Senior Notes of $5.9 million which are amortized to interest expense using the effective interest method over the expected life of the Convertible Senior Notes.

In connection with the Convertible Senior Notes offering, the Company entered into privately negotiated capped call transactions with certain financial institutions. The capped call transactions have a strike price of $53.64 per and a cap price of $82.86 per, and are exercisable when, and if, the Convertible Senior Notes are converted. The Company paid $20.53 million for these capped calls and charged that amount to additional paid-in capital.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-URI https://asc.fasb.org/topic&trid=2208564

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (h)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
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-Section 50
-Paragraph 1C
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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-Paragraph 1I
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-SubTopic 20
-Section 50
-Paragraph 1I
-Subparagraph (d)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(c))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-SubTopic 20
-Section 50
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-Subparagraph (g)
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
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-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-SubTopic 20
-Section 50
-Paragraph 1C
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
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-Section 50
-Paragraph 1E
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495348-112611

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1I
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (i)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

+ Details

Income Taxes

12 Months Ended

Dec. 31, 2022

Income Taxes [Abstract]

Income Taxes

Note 14. Income Taxes

Income tax expense (benefit) for the years ended December 31 consists of the following components:

	2022								2021								2020
	Current		Deferred			Total			Current		Deferred			Total			Current		Deferred		Total
Federal	$	8,457	$	(4,713	)	$	3,744		$	11,315	$	(583	)	$	10,732		$	5,285	$	3,642	$	8,927
State and Local		2,815		(1,291	)		1,524			4,210		(637	)		3,573			1,930		1,100		3,030
Foreign		83		(502	)		(419	)		-		(265	)		(265	)		-		-		-
Total	$	11,355	$	(6,506	)	$	4,849		$	15,525	$	(1,485	)	$	14,040		$	7,215	$	4,742	$	11,957

Deferred tax assets and liabilities consists of:

	December 31,					December 31,
	2022					2021
	Assets			Liabilities		Assets			Liabilities
Inventory	$	1,384		$	-	$	2,096		$	2
Property, plant, and equipment		-			2,856		-			3,259
Goodwill and other intangible assets		-			2,812		-			8,573
Foreign NOL carryforward		561			-		265			-
State NOL carryforward		2,483			-		2,421			-
Unrealized loss on investments		5,168			-		1,322			-
Leases		3,544			3,222		4,150			3,826
Original issue discount		1,604			-		2,720			-
Other		8,614			2,963		9,003			2,305
Gross deferred income taxes		23,358			11,853		21,977			17,965
Valuation allowance		(3,062	)		-		(2,649	)		-
Net deferred income taxes	$	20,296		$	11,853	$	19,328		$	17,965

At December 31, 2022, the Company had state net operating loss (“NOL”) carryforwards for income tax purposes of approximately $30.7 million, which expire between 2034 and 2042, $24.0 million of which has an indefinite carryforward period. The Company has determined that, at December 31, 2022 and 2021, its ability to realize future benefits of its state NOL carryforwards does not meet the “more likely than not” criteria in ASC 740, Income Taxes. Therefore, a valuation allowance for state NOL carryforwards of $2.4 million and $2.6 million has been recorded at December 2022 and 2021, respectively.

ASC 740-10-25 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. The Company has determined that they did not have any uncertain tax positions requiring recognition as a result of the provisions of ASC 740-10-25. The Company’s policy is to recognize interest and penalties accrued on uncertain tax positions as part of interest expense. For the years ended December 31, 2022, 2021, and 2020, no estimated interest or penalties were recognized for the uncertainty of tax positions taken. The Company files income tax returns in the U.S. federal jurisdiction and various state jurisdictions. In general, the Company is no longer subject to U.S. federal and state tax examinations for years prior to 2019.

Reconciliation of the federal statutory rate and the effective income tax rate for the years ended December 31 is as follows:

	2022			2021			2020
Federal statutory rate		21.0	%		21.0	%		21.0	%
Foreign rate differential		-0.5	%		-0.1	%		0.0	%
State taxes		5.7	%		3.4	%		2.9	%
Permanent differences		-0.2	%		-4.1	%		-1.6	%
Other		1.7	%		0.7	%		4.7	%
Valuation allowance		2.6	%		0.6	%		-3.2	%
Effective income tax rate		30.3	%		21.5	%		23.8	%

The permanent differences for the year ended December 31, 2022 are not significant in the aggregate. The permanent difference for the year December 31, 2021 are primarily related to income tax benefits of $7.5 million ($1.6 million tax effected) as a result of the forgiveness of the $7.5 million unsecured loan and $7.2 million ($1.5 million tax effected) as a result of stock option exercises. The permanent differences for the years ended December 31, 2020 are primarily related to income tax benefits of $3.3 million ($0.7 million tax effected) as a result of stock option exercises.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

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+ Details

Pension and Postretirement Benefit Plans

12 Months Ended

Dec. 31, 2022

Pension and Postretirement Benefit Plans [Abstract]

Pension and Postretirement Benefit Plans

Note 15. Pension and Postretirement Benefit Plans

The Company had a defined benefit pension plan. Benefits for hourly employees were based on a stated benefit per year of service, reduced by amounts earned in a previous plan. Benefits for salaried employees were based on years of service and the employees’ final compensation. The defined benefit pension plan was frozen. The Company’s policy was to make the minimum amount of contributions that can be deducted for federal income taxes. In the fourth quarter 2019, the Company elected to terminate the defined benefit pension plan, effective December 31, 2019 with final distributions made in the third quarter of 2020.

The Company sponsored a defined benefit postretirement plan that covered hourly employees. This plan provided medical and dental benefits. This plan was contributory with retiree contributions adjusted annually. The Company’s policy was to make contributions equal to benefits paid during the year. In the fourth quarter 2019, the Company amended the plan to cease benefits effective June 30, 2020.

The following table provides the components of net periodic pension and postretirement benefit costs and total costs for the plans for the years ended December 31:

	Pension Benefits							Postretirement Benefits
	2022		2021		2020			2022		2021		2020
Service cost	$	-	$	-	$	-		$	-	$	-	$	-
Interest cost		-		-		190			-		-		-
Expected return on plan assets		-		-		(322	)		-		-		-
Amortization of (gains) losses		-		-		72			-		-		(131	)
Settlement and Curtailment loss (gain)		-		-		1,180			-		-		-
Net periodic benefit cost (income)	$	-	$	-	$	1,120		$	-	$	-	$	(131	)

The Company also sponsors a voluntary 401(k) retirement savings plan. Eligible employees may elect to contribute up to 15% of their annual earnings subject to certain limitations. For the 2022 and 2021 Plan Years, the Company contributed 4% to those employees contributing 4% or greater. For those employees contributing less than 4%, the Company matched the contribution by 100%. Additionally, for all years presented, the Company made discretionary contributions of 1% to all employees, regardless of an employee’s contribution level. Company contributions to this plan were approximately $1.5 million for 2022, $1.6 million for 2021 and $1.6 million for 2020.

- Definition

The entire disclosure for retirement benefits.

+ References

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+ Details

Lease Commitments

12 Months Ended

Dec. 31, 2022

Lease Commitments [Abstract]

Lease Commitments

Note 16. Lease Commitments

The Company’s operating leases consist primarily of leased property for manufacturing warehouse, head offices and retail space. The Company’s capital leases consist of vehicle leases. In general, the Company does not recognize any renewal periods within the lease terms as there are not significant barriers to ending the lease at the initial term. Lease and non-lease components are accounted for as a single lease component.

Leases with an initial term of 12 months or less are not recorded on the balance sheet. Lease expense for these leases is recognized on a straight-line basis over the lease term.

The components of lease expense consists of the following:

	For the year ended December 31,
	2022		2021			2020
Operating lease cost
Cost of sales	$	940	$	907		$	908
Selling, general and administrative		1,622		1,907			1,480
Variable lease cost ⁽¹⁾		765		1,182			587
Short-term lease cost		37		48			131
Sublease income		-		(60	)		(120	)
Total	$	3,364	$	3,984		$	2,986

(1)	Variable lease cost includes elements of a contract that do not represent a good or service but for which the lessee is responsible for paying.

	For the year ended December 31,
	2022		2021		2020
Financing lease cost
Selling, general and administrative	$	1,138	$	1,094	$	922
Total	$	1,138	$	1,094	$	922

	December 31,		December 31,
	2022		2021
Assets:
Right of use assets - Operating	$	10,967	$	12,883
Right of use assets - Financing		1,498		2,170
Total lease assets	$	12,465	$	15,053

Liabilities:
Current lease liabilities - Operating⁽²⁾	$	2,007	$	1,950
Current lease liabilities - Financing ⁽²⁾		1,095		1,026
Long-term lease liabilities - Operating		10,243		12,261
Long-term lease liabilities - Financing		350		1,075
Total lease liabilities	$	13,695	$	16,312

(2)	Reported within accrued liabilities on the balance sheet

	As of December 31,
	2022			2021
Weighted-average remaining lease term - operating leases	6.5 years			7.3 years
Weighted-average discount rate - operating leases		5.19	%		5.21	%
Weighted-average remaining lease term - financing leases	1.8 years			2.0 years
Weighted-average discount rate - financing leases		3.42	%		3.37	%

Nearly all the lease contracts for the Company do not provide a readily determinable implicit rate. For these contracts, the Company uses a discount rate that approximates its incremental borrowing rate at the time of the lease commencement.

Maturities of operating lease liabilities consisted of the following:

	December 31,
	2022
2023	$	2,564
2024		2,392
2025		2,121
2026		2,084
2027		2,035
Years thereafter		5,344
Total lease payments	$	16,540
Less: Imputed interest		4,290
Present value of lease liabilities	$	12,250

Maturities of financing lease liabilities consisted of the following:

	December 31,
	2022
2023	$	1,122
2024		174
2025		129
2026		63
Total lease payments	$	1,488
Less: Imputed interest		43
Present value of lease liabilities	$	1,445

Share Incentive Plans

12 Months Ended

Dec. 31, 2022

Share Incentive Plans [Abstract]

Share Incentive Plans

Note 17. Share Incentive Plans

On March 22, 2021, the Company’s Board of Directors adopted the Turning Point Brands, Inc. 2021 Equity Incentive Plan (the “2021 Plan”), pursuant to which awards may be granted to employees, non-employee directors, and consultants. In addition, the 2021 Plan provides for the granting of nonqualified stock options to employees of the Company or any subsidiary of the Company. Pursuant to the 2021 Plan, 1,290,000 shares, plus 100,052 shares remaining available for issuance under the 2015 Equity Incentive Plan (the “2015 Plan”), of TPB Common Stock are reserved for issuance as awards to employees, non-employee directors, and consultants as compensation for past or future services or the attainment of certain performance goals. The 2021 Plan is scheduled to terminate on March 21, 2031. The 2021 Plan is administered by the compensation committee (the “Committee”) of the Company’s Board of Directors. The Committee determines the vesting criteria for the awards, with such criteria to be specified in the award agreement. As of December 31, 2022, net of forfeitures, there were 103,282 Restricted Stock Units (“RSUs”), 109,119 options and 16,978 Performance Based Restricted Stock Units (“PRSUs”) granted under the 2021 Plan. There are 1,160,673 shares available for grant under the 2021 Plan.

On April 28, 2016, the Board of Directors of the Company adopted the 2015 Plan, pursuant to which awards could have been granted to employees, non-employee directors, and consultants. In addition, the 2015 Plan provided for the granting of nonqualified stock options to employees of the Company or any subsidiary of the Company. Pursuant to the 2015 Plan, 1,400,000 shares of the Company’s voting common stock were reserved for issuance as awards to employees, non-employee directors, and consultants as compensation for past or future services or the attainment of certain performance goals. The 2015 Plan was scheduled to terminate on April 27, 2026. Upon adoption of the 2021 Plan, the 2015 Plan was terminated, and the Company determined no additional grants would be made under the 2015 Plan. However, all awards issued under the 2015 Plan that have not been previously terminated or forfeited remain outstanding and continue unaffected. There are no shares available for grant under the 2015 Plan. The 2015 Plan was administrated by the Committee.

On February 8, 2006, the Board of Directors of the Company adopted the 2006 Equity Incentive Plan (the “2006 Plan”) of North Atlantic Holding Company, Inc., pursuant to which awards may be granted to employees. The 2006 Plan provides for the granting of nonqualified stock options and restricted stock awards to employees. Upon the adoption of the Company’s 2015 Equity Incentive Plan in connection with its IPO, the Company determined no additional grants would be made under the 2006 Plan. However, all awards issued under the 2006 Plan that have not been previously terminated or forfeited remain outstanding and continue unaffected. There are no shares available for grant under the 2006 Plan.

Stock option activity for the 2006, 2015 and 2021 Plans is summarized below:

				Weighted		Weighted
	Stock			Average		Average
	Option			Exercise		Grant Date
	Shares			Price		Fair Value
Outstanding, December 31, 2020		711,060			19.58		6.42

Granted		119,500			50.93		13.58
Exercised		(202,768	)		10.22		6.35
Forfeited		(7,957	)		33.22		9.63
Outstanding, December 31, 2021		619,835		$	28.51	$	8.70

Granted		114,827			30.58		10.34
Exercised		(40,331	)		12.49		4.08
Forfeited		(11,117	)		32.60		9.35
Outstanding, December 31, 2022		683,214		$	29.74	$	9.24

Under the 2006, 2015 and 2021 Plans, the total intrinsic value of options exercised during the years ended December 31, 2022, 2021, and 2020, was $0.7 million, $7.9 million, and $3.7 million, respectively.

At December 31, 2022, under the 2006 Plan, the outstanding stock options’ exercise price for 74,379 options is $3.83 per share, all of which are exercisable. The weighted average of the remaining lives of the outstanding stock options is approximately 1.50 years for the options with the $3.83 exercise price. The Company estimates the expected life of these stock options is ten years from the date of grant. For the $3.83 per share options, the weighted average fair value of options was determined using the Black-Scholes model assuming a ten-year life from grant date, a current share price and exercise price of $3.83, a risk-free interest rate of 3.57%, a volatility of 40%, and no assumed dividend yield. Based on these assumptions, the fair value of these options is approximately $2.17 per share option granted.

At December 31, 2022, under the 2015 and 2021 Plans, the risk-free interest rate is based on the U.S. Treasury rate for the expected life at the time of grant. The expected volatility is based on the average long-term historical volatilities of peer companies. We intend to continue to consistently use the same group of publicly traded peer companies to determine expected volatility until sufficient information regarding volatility of our share price becomes available or until the selected companies are no longer suitable for this purpose. Due to our limited trading history, we are using the simplified method presented by SEC Staff Accounting Bulletin No. 107 to calculate expected holding periods, which represent the periods of time for which options granted are expected to be outstanding. We will continue to use this method until we have sufficient historical exercise experience to give us confidence in the reliability of our calculations. The fair values of these options were determined using the Black-Scholes option pricing model.

The following table outlines the assumptions for options granted under the 2015 Plan.

	February 10,			May 17,			March 7,			March 20,			October 24,			March 18,			February 18,			May 3,
	2017			2017			2018			2019			2019			2020			2021			2021
Number of options granted		40,000			93,819			98,100			155,780			25,000			155,000			100,000			12,000
Options outstanding at December 31, 2022		20,000			44,983			58,067			141,784			25,000			93,248			93,448			12,000
Number exercisable at December 31, 2022		20,000			44,983			58,067			141,784			25,000			61,081			39,097			4,080
Exercise price	$	13.00		$	15.41		$	21.21		$	47.58		$	20.89		$	14.85		$	51.75		$	47.76
Remaining lives		4.12			4.38			5.19			6.22			6.82			7.22			8.14			8.34
Risk free interest rate		1.89	%		1.76	%		2.65	%		2.34	%		1.58	%		0.79	%		0.56	%		0.84	%
Expected volatility		27.44	%		26.92	%		28.76	%		30.95	%		31.93	%		35.72	%		28.69	%		29.03	%
Expected life		6.000			6.000			6.000			6.000			6.000			6.000			6.000			6.000
Dividend yield		-			-			0.83	%		0.42	%		0.95	%		1.49	%		0.55	%		0.59	%
Fair value at grant date	$	3.98		$	4.60		$	6.37		$	15.63		$	6.27		$	4.41		$	13.77		$	13.06

The following table outlines the assumptions for options granted under the 2021 Plan.

	May 17,			March 14,			April 29,
	2021			2022			2022
Number of options granted		7,500			100,000			14,827
Options outstanding at December 31, 2022		7,500			98,148			14,827
Number exercisable at December 31, 2022		2,550			-			-
Exercise price	$	45.05		$	30.46		$	31.39
Remaining lives		8.38			9.21			9.33
Risk free interest rate		0.84	%		2.10	%		2.92	%
Expected volatility		31.50	%		35.33	%		35.33	%
Expected life		6.000			6.000			6.000
Dividend yield		0.63	%		1.01	%		0.98	%
Fair value at grant date	$	13.23		$	10.23		$	11.07

The Company has recorded compensation expense related to the options based on the provisions of ASC 718 under which the fixed portion of such expense is determined as the fair value of the options on the date of grant and amortized over the vesting period. The Company recorded compensation expense related to the options of approximately $1.1 million, $2.3 million and $1.2 million for the years ended December 31, 2022, 2021 and 2020, respectively. Total unrecognized compensation expense related to options at December 31, 2022, is $0.7 million, which will be expensed over 1.77 years.

Performance-based restricted stock units are restricted stock units subject to both performance-based and service-based vesting conditions. The number of shares of common stock a recipient will receive upon vesting of a PRSU will be calculated by reference to certain performance metrics related to the Company’s performance over a three to five-year period. PRSUs will vest on the measurement date, which is no more than 65 days after the performance period, provided the applicable service and performance conditions are satisfied. At December 31, 2022, there are 469,733 PRSUs outstanding, 469,733 of which are unvested. The following table outlines the PRSUs granted and outstanding as of December 31, 2022.

	March 7,		March 20,		July 19,		March 18,		December 28,		February 18,		March 14,
	2018		2019		2019		2020		2020		2021		2022
Number of PRSUs granted		96,000		92,500		88,582		94,000		88,169		100,000		49,996
PRSUs outstanding at December 31, 2022		89,600		77,380		21,342		85,810		58,779		91,190		45,632
Fair value as of grant date	$	21.21	$	47.58	$	52.15	$	14.85	$	46.42	$	51.75	$	30.46
Remaining lives		-		1.00		-		2.00		1.00		3.00		4.00

The Company recorded compensation expense related to the PRSUs of approximately $2.9 million, $5.0 million and $1.4 million in the consolidated statements of income for the years ended December 31, 2022, 2021 and 2020, respectively, based on the probability of achieving the performance condition. Total unrecognized compensation expense related to these awards at December 31, 2022, is $2.5 million, which will be expensed over the service period based on the probability of achieving the performance condition.

RSUs are stock units subject to service-based vesting conditions from one to five years. At December 31, 2022, there are 89,696 RSUs outstanding, 89,696 of which are unvested. The following table outlines the RSUs granted and outstanding as of December 31, 2022.

	March 14,		March 14,		April 29,		April 29,
	2022		2022		2022		2022
Number of RSUs granted		50,004		28,726		11,393		4,522
RSUs outstanding at December 31, 2022		45,055		28,726		11,393		4,522
Fair value as of grant date	$	30.46	$	30.46	$	31.39	$	31.39
Remaining lives		4.00		2.00		0.32		4.00

The Company has recorded compensation expense related to the RSUs based on the provisions of ASC 718 under which the fixed portion of such expense is determined as the fair value of the RSUs on the date of grant and amortized over the vesting period. The Company recorded compensation expense related to the RSUs of approximately $1.3 million, $0.3 million and $0.0 for the years ended December 31, 2022, 2021 and 2020, respectively. Total unrecognized compensation expense related to RSUs at December 31, 2022, is $1.6 million, which will be expensed over 3.36 years.

Contingencies	12 Months Ended
Contingencies	Dec. 31, 2022
Contingencies [Abstract]
Contingencies	Note 18. Contingencies On October 9, 2020, a purported stockholder of Turning Point Brands, Inc., Paul-Emile Berteau, filed a complaint in the Delaware Court of Chancery relating to the merger of SDI with a TPB subsidiary pursuant to the Agreement and Plan of Merger and Reorganization, dated as of April 7, 2020, by and among TPB, SDI and Merger Sub. The complaint purports to assert two derivative counts for breach of fiduciary duty on TPB’s behalf and against the TPB Board of Directors and certain SDI affiliates. The third count purports to assert a direct claim against TPB and its Board of Directors based on allegations that TPB’s Amended and Restated Bylaws are inconsistent with TPB’s certificate of incorporation. On October 26, 2020, the TPB Board of Directors adopted Amendment No. 1 to TPB’s Amended and Restated Bylaws, which amended the challenged section of the bylaws. On June 30, 2021, the court granted in part and denied in part the defendants’ motions to dismiss. Among other things, the court dismissed TPB director H.C. Charles Diao as a defendant in the action and dismissed the third count of the plaintiff’s complaint as moot. The remaining defendants attended a mediation in late November 2022 where a tentative settlement was reached. The impact to the Company is not expected to be material. Other major tobacco companies are defendants in product liability claims. In a number of these cases, the amounts of punitive and compensatory damages sought are significant and, if such a claim were brought against the Company, could have a material adverse effect on our business and results of operations. The Company is subject to several lawsuits alleging personal injuries resulting from malfunctioning vaporizer devices and may be subject to claims in the future relating to our other NewGen products. The Company is still evaluating these claims and the potential defenses to them. For example, the Company did not design or manufacture the products at issue; rather, the Company was merely the distributor. Nonetheless, there can be no assurance that the Company will prevail in these cases, and they could have a material adverse effect on the financial position, results of operations or cash flows of the Company. We have several subsidiaries engaged in making, distributing, and selling vapor products. As a result of the overall publicity and controversy surrounding the vapor industry generally, many companies have received informational subpoenas from various regulatory bodies and in some jurisdictions regulatory lawsuits have been filed regarding marketing practices and possible underage sales. We expect that our subsidiaries will be subject to some such cases and investigative requests. To the extent that litigation becomes necessary, we believe that the subsidiaries have strong factual and legal defenses against claims that they unfairly marketed vapor products. We have two franchisor subsidiaries. Like many franchise businesses, in the ordinary course of their business, these subsidiaries are from time-to-time responding parties to arbitration demands brought by franchisees. We have reached an agreement to arbitrate a claim brought by a former franchisee. This matter relates to the termination of the franchise agreement by the franchisor for failure to pay franchising fees and our subsequent demand that the franchisee cease using our marks and de-image locations formerly housing the franchises. The franchisee is claiming tortious interference and conversion. We believe the franchisor’s ultimate termination of the franchise agreement for multiple uncured material defaults by the franchisee was proper. We believe we have good and valid substantive defenses against the claims and intend on vigorously defending our interests in this matter.

Earnings Per Share

12 Months Ended

Dec. 31, 2022

Earnings Per Share [Abstract]

Earnings Per Share

Note 19. Earnings Per Share

The following is a reconciliation of the numerators and denominators of the basic and diluted EPS computations of net income:

	December 31, 2022						December 31, 2021						December 31, 2020
					Per						Per						Per
	Income		Shares		Share		Income		Shares		Share		Income		Shares		Share
Basic EPS:
Numerator
Net income attributable to Turning Point Brands, Inc.	$	11,641					$	52,059					$	38,192

Denominator
Weighted average				17,899,794	$	0.65				18,917,570	$	2.75				19,398,474	$	1.97

Diluted EPS:
Numerator
Net income attributable to Turning Point Brands, Inc.	$	11,641					$	52,059					$	38,192
Interest expense related to Convertible Senior Notes, net of tax		-						4,317						4,188
Diluted consolidated net income	$	11,641					$	56,376					$	42,380

Denominator
Basic weighted average				17,899,794						18,917,570						19,398,474
Convertible Senior Notes (1)				-						3,208,172						3,202,808
Stock options				155,221						256,252						336,159
				18,055,015	$	0.64				22,381,994	$	2.52				22,937,441	$	1.85

(1)	The effect of 3,208,172 shares issuable upon conversion of the Convertible Senior Notes were excluded from the diluted net income per share calculation because the effect would have been antidilutive.

Segment Information

12 Months Ended

Dec. 31, 2022

Segment Information [Abstract]

Segment Information

Note 20. Segment Information

In accordance with ASC 280, Segment Reporting, the Company has three reportable segments, (1) Zig-Zag Products; (2) Stoker’s Products; and (3) NewGen Products. The Zig-Zag Products segment markets and distributes (a) rolling papers, tubes, and related products; and (b) finished cigars and MYO cigar wraps and (c) CLIPPER reusable lighters. The Stoker’s Products segment (a) manufactures and markets moist snuff and (b) contracts for and markets loose-leaf chewing tobacco products. The NewGen segment (a) markets and distributes liquid vapor products and certain other products without tobacco and/or nicotine; (b) distributes a wide assortment of products to non-traditional retail outlets via Vapor Beast; and (c) markets and distributes a wide assortment of products to individual consumers via the VaporFi B2C online platform. Products in the Zig-Zag Products and Stoker’s Products segments are distributed primarily through wholesale distributors in the U.S. and Canada while products in the NewGen segment are distributed primarily through e-commerce to non-traditional retail outlets and direct to consumers in the U.S. The Other segment includes the costs and assets of the Company not assigned to one of the three reportable segments such as intercompany transfers, deferred taxes, deferred financing fees, and investments in subsidiaries. The Company had no customer that accounted for more than 10% of net sales in 2022, 2021, or 2020.

The accounting policies of these segments are the same as those of the Company. Corporate costs are not directly charged to the three reportable segments in the ordinary course of operations. The Company evaluates the performance of its segments and allocates resources to them based on operating income.

The tables below present financial information about reportable segments:

	For the year ended December 31,
	2022			2021			2020

Net sales
Zig-Zag products	$	190,403		$	176,491		$	132,812
Stoker’s products		130,826			124,280			115,866
NewGen products		93,784			144,700			156,433
Total	$	415,013		$	445,471		$	405,111

Gross profit
Zig-Zag products	$	106,576		$	102,739		$	78,278
Stoker’s products		71,254			68,084			61,764
NewGen products		27,708			47,011			49,948
Total	$	205,538		$	217,834		$	189,990

Operating income (loss)
Zig-Zag products	$	73,342		$	77,109		$	61,932
Stoker’s products		53,331			52,073			45,042
NewGen products		1,506			2,263			5,801
Corporate unallocated ⁽¹⁾⁽²⁾		(52,665	)		(41,124	)		(48,348	)
Total	$	75,514		$	90,321		$	64,427

Interest expense, net		19,524			20,500			13,487
Investment loss (income)		13,303			6,673			(198	)
Goodwill and intangible impariment loss		27,566			-			-
Gain on extinguishment of debt		(885	)		(2,154	)		-
Net periodic benefit (income) cost, excluding service cost		-			-			989

Income before income taxes	$	16,006		$	65,302		$	50,149

Capital expenditures
Zig-Zag products	$	4,641		$	141		$	-
Stoker’s products		3,044			5,960			5,815
NewGen products		-			55			320
Total	$	7,685		$	6,156		$	6,135

Depreciation and amortization
Zig-Zag products	$	412		$	388		$	182
Stoker’s products		2,972			2,565			2,215
NewGen products		1,915			2,059			2,621
Total	$	5,299		$	5,012		$	5,018

(1)	Includes corporate costs that are not allocated to any of the three reportable segments.

(2)	Includes costs related to PMTA of $4.6 million, $2.6 million and $14.4 million in 2022, 2021 and 2020, respectively.

	December 31,		December 31,
	2022		2021
Assets
Zig-Zag products	$	225,893	$	227,554
Stoker’s products		151,241		142,334
NewGen products		39,624		72,746
Corporate unallocated ⁽¹⁾		155,348		158,926
Total	$	572,106	$	601,560

(1)	Includes assets not assigned to the three reportable segments. All goodwill has been allocated to the reportable segments.

Revenue Disaggregation—Sales Channel

Revenues of the Zig-Zag Products and Stoker’s Products segments are primarily comprised of sales made to wholesalers while NewGen sales are made business to business and business to consumer, both online and through our corporate retail stores. NewGen net sales are broken out by sales channel below.

	NewGen Segment
	For the year ended December 31,
	2022		2021		2020

Business to Business	$	76,462	$	107,235	$	107,976
Business to Consumer - Online		16,836		37,069		43,517
Business to Consumer - Corporate store		-		-		4,751
Other		486		396		189
Total	$	93,784	$	144,700	$	156,433

Net Sales: Domestic and Foreign

The following table shows a breakdown of consolidated net sales between domestic and foreign.

	For the year ended December 31,
	2022		2021		2020
Domestic	$	381,723	$	415,514	$	391,705
Foreign		33,290		29,957		13,406
Total	$	415,013	$	445,471	$	405,111

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 31
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8924-108599

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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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-Name Accounting Standards Codification
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Reference 13: http://www.xbrl.org/2003/role/disclosureRef
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Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-URI https://asc.fasb.org/topic&trid=2134510

+ Details

Selected Quarterly Financial Information (Unaudited)

12 Months Ended

Dec. 31, 2022

Selected Quarterly Financial Information (Unaudited) [Abstract]

Selected Quarterly Financial Information (Unaudited)

Note 21. Selected Quarterly Financial Information (Unaudited)

The following table presents the quarterly operating results:

	1st		2nd		3rd		4th
2022
Net sales	$	100,894	$	102,925	$	107,802	$	103,392
Gross profit		51,794		51,469		52,712		49,563
Net income attributable to Turning Point Brands, Inc.		10,998		5,424		11,536		(16,317	)
Basic net income attributable to Turning Point Brands, Inc. per share		0.60		0.30		0.65		(0.93	)
Diluted net income attributable to Turning Point Brands, Inc. per share	$	0.55	$	0.30	$	0.60	$	(0.93	)⁽¹⁾

2021
Net sales	$	107,641	$	122,643	$	109,904	$	105,283
Gross profit		53,261		59,973		54,269		50,331
Net income attributable to Turning Point Brands, Inc.		11,783		15,355		13,468		11,454
Basic net income attributable to Turning Point Brands, Inc. per share		0.62		0.81		0.71		0.61
Diluted net income attributable to Turning Point Brands, Inc. per share	$	0.57	$	0.73	$	0.65	$	0.57

(1)	The effect of 3,213,796 shares issuable upon conversion of the Convertible Senior Notes were excluded from the diluted net income per share calculation because the effect would have been antidilutive.

The amounts presented in the table above are computed independently for each quarter. As a result, their sum may not equal the total year amounts.

Dividends and Share Repurchase	12 Months Ended
Dividends and Share Repurchase	Dec. 31, 2022
Dividends and Share Repurchase [Abstract]
Dividends and Share Repurchase	Note 22. Dividends and Share Repurchase The Company currently pays a quarterly cash dividend. Dividends are considered restricted payments under the Senior Secured Notes Indenture and 2021 Revolving Credit Facility. The Company is generally permitted to make restricted payments provided that, at the time of payment, or as a result of payment, the Company is not in default on its debt covenants. Additional earning and market capitalization restrictions limit the aggregate amount of restricted, quarterly dividends during a fiscal year. On February 25, 2020, the Company’s Board of Directors approved a $50.0 million share repurchase program, which is intended for opportunistic execution based upon a variety of factors including market dynamics. The program is subject to the ongoing discretion of the Board. The total number of shares repurchased for the year ended December 31, 2022, was 1,021,052 shares for a total cost of $29.2 million and an average price per share of $28.62. On October 25, 2021, the Board increased the approved share repurchase program by $30.7 million and by another $24.6 million on February 24, 2022. $27.2 million remains available for share repurchases under the program at December 31, 2022.

Organizations and Basis of Presentation (Policies)	12 Months Ended
Organizations and Basis of Presentation (Policies)	Dec. 31, 2022
Organizations and Basis of Presentation [Abstract]
Basis of Presentation	Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the U.S. (“GAAP”). The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities, disclosure of contingent assets and liabilities as of the dates of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. The Company’s significant estimates include those affecting the valuation of goodwill and other intangible assets, deferred income tax valuation allowances, the valuation of investments and the valuation of inventory, including reserves.
Reclassifications	Certain prior year amounts have been reclassified to conform to the current year’s presentation. The changes did not have an impact on the Company’s consolidated financial position, results of operations, or cash flows in any of the periods presented.

Summary of Significant Accounting Policies (Policies)