Turning Point Brands Inc

To the Stockholders and the Board of Directors of Turning Point Brands, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Turning Point Brands, Inc. and its subsidiaries (the Company) as of December 31, 2024 and 2023, the related consolidated statements of income, comprehensive income, changes in stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes to the consolidated financial statements (collectively, the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established inInternal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013. Our report dated March 6, 2025 expressed an opinion that the Company had not maintained effective internal control over financial reporting as of December 31, 2024, based on criteria established inInternal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing a separate opinion on the critical audit matters or on the accounts or disclosures to which they relate.

Controlling Financial Interest Assessment of Equity Investment

As described in Notes 3 and 24 to the financial statements, on January 2, 2025, the Company sold 100% of its equity interest in South Beach Brands LLC (“SBB”), the subsidiary that owns and operates the Company’s Creative Distribution Solutions (“CDS”) segment, to General Wireless Operations, Inc. (“GWO”) in exchange for 1,006.45 shares of GWO common stock and 680 shares of GWO Series B Preferred Stock, which together represent 49% of the issued and outstanding GWO common stock on a fully-diluted basis (“SBB Exchange Transaction”). The Company determined that, upon completion of the SBB Exchange Transaction, it will not have a controlling financial interest in GWO and, as a result, will deconsolidate SBB on January 2, 2025. Having met applicable criteria prior to December 31, 2024, the Company recorded the assets and liabilities of SBB as held for sale as of December 31, 2024 and 2023 and the results of operations and cash flows of SBB as discontinued operations for each of the three years in the period ended December 31, 2024.

As described in Note 2 to the financial statements, when the Company concludes it has a controlling financial interest in a legal entity, the Company consolidates the legal entity as a subsidiary. The evaluation of whether or not the Company has a controlling financial interest in a legal entity requires the application of complex accounting rules and the evaluation of a number of factors, including determining the consolidation model that applies, the Company’s decision-making ability through voting or other rights, and the Company’s exposure to variability to the legal entity, among other items.

We identified the Company’s accounting conclusion that it will not have a controlling financial interest in GWO as a critical audit matter because of the complexity involved in evaluating the exchange transaction structure and related agreements with management’s interpretation and application of the accounting rules. Auditing management’s accounting conclusion involved a high degree of auditor judgment and an increase in audit effort due to the impact management’s conclusion would have on the Company’s financial statement presentation.

Our audit procedures related to the Company’s assessment of whether or not it will have a controlling financial interest in GWO included the following, among others:

Fair Value of Creative Distribution Solutions Segment

As described in Note 3 to the financial statements, the Company has classified the assets and liabilities of the Creative Distribution Solutions (“CDS”) segment as held for sale as of December 31, 2024 and 2023, and recognized a valuation allowance of $8.8 million against the net assets of CDS as of December 31, 2024 to adjust the carrying value of the CDS segment to fair value less cost to sell. The Company estimated the fair value of the CDS segment using a weighted average of three valuation methodologies that consisted of a discounted cash flow method, a guideline public company method and a guideline transaction method.

We identified the estimate of the fair value of the Company’s CDS segment as a critical audit matter because of the significant estimates and assumptions used by management when estimating the fair value of the segment, including management’s forecasts of expected revenue growth rates, management’s selection of the discount rate and management’s estimate of the terminal value, which were all used in the discounted cash flow method. Auditing management’s estimates and assumptions involved a high degree of auditor judgment and increased audit effort, including the use of our valuation specialists, due to the impact these assumptions have on the estimated fair value of the CDS segment.

Our audit procedures related to the estimated fair value of the CDS segment included the following, among others:

/s/RSM US LLP

We have served as the Company’s auditor since 2006.

Charlotte, North Carolina

March 6, 2025

To the Stockholders and the Board of Directors of Turning Point Brands, Inc.

Opinion on the Internal Control Over Financial Reporting

We have audited Turning Point Brands, Inc.’s (the Company) internal control over financial reporting as of December 31, 2024, based on criteria established inInternal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013. In our opinion, because of the effect of the material weakness described below on the achievement of the objectives of the control criteria, the Company has not maintained effective internal control over financial reporting as of December 31, 2024, based on criteria established inInternal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets as of December 31, 2024 and 2023, the related consolidated statements of income, comprehensive income, changes in stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes to the consolidated financial statements of the Company and our report dated March 6, 2025 expressed an unqualified opinion.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. The following material weakness has been identified and included in management’s assessment:

There were deficiencies in the design and operation of information technology general controls (ITGCs) in the areas of user access and program change-management over certain information technology systems that support the Company’s financial reporting processes. The business process controls (automated and manual) that are dependent on the affected ITGCs were also deemed ineffective because they could have been adversely impacted.

This material weakness was considered in determining the nature, timing and extent of audit tests applied in our audit of the 2024 financial statements, and this report does not affect our report dated March 6, 2025 on those financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ RSM US LLP

Charlotte, North Carolina

March 6, 2025