All right. It's 11:0:1 Eastern Time. This meeting will come to order. Morning. I'm Don Becker, Assistant General Counsel and Assistant Secretary of the Board of Turning Point Brands Scheme.
It is my pleasure to welcome you to this virtual annual meeting of stockholders. Before we begin the business portion of this meeting, there are several individuals I'd like to acknowledge. First, I'd like to introduce the current of our Board of Directors who are with us on the call today. David E. Glasek, Chairman of our Board, Chair of our Compensation Committee and a partner of Standard General LP Lawrence S.
Wexler, a Director, our CEO and President and a highly experienced tobacco executive Gregory H. A. Baxter, a Director in Prominent Financial Executive. Ashley Davis Frushone, Director, Chair of our Nominating and Corporate Governance Committee and founding partner of West Front Strategies LLC, a government relations firm. H.
C. Charles Dow, the Director, Chair of our Audit Committee and the Senior Vice President of Finance and Corporate Development of DXC Technology Company Assi Grazioli Benir, a Director and Founding Partner of Muse Capital Stephen Usher, a Director and Head of Distribution at Lafayette Square and Arnold Zimmerman, a Director and prominent marketing executive. In addition to Larry Wexler, 2 key members of the company's senior management team Also present on the call, Graham Aperti, Senior Vice President and Chief Operating Officer and Louis Riefermina, Senior Vice President and Chief Financial Officer. Also present today are Matt Coughlin and Phil King of RSM US LLP, our independent auditors. They will be available to answer stockholder questions after the meeting.
At today's meeting, we will cover the matters described in the proxy statement mailed on March 25, 2021 to stockholders of record as of the close of business on March 5, 2021. We will then have a business presentation. At the conclusion of our business presentation, we will take questions from our stockholders and guests. I have a list of stockholders entitled to notice of this meeting and proper notice has been given to such stockholders. I also have a certified list of the stockholders of record as of close of business on March 5, 2021, The record date.
This list has been available for inspection by stockholders during the past 10 days and remains available for inspection during the meeting. Further, the affidavit certifying the proper notice of the meeting was given to each of these stockholders will be filed with the minutes of this meeting. The company has appointed Kristin Freer and Miriam Harris to serve as inspectors of election of the meeting. As inspectors, they have been duly sworn and have taken and signed an oath to faithfully execute their duties as prescribed by Delaware law and the company's organizational documents with strict impartiality and to the best of their abilities. The O's will be filed with the minutes of this meeting.
Further, as the inspectors of election, they have presented their preliminary report to the Chairman indicating the presence of a quorum. The meeting is properly constituted for the transaction of business. The matters to be acted upon at the meeting will be considered in the order set out in the proxy If there are stockholders attending this virtual meeting who have not voted already by proxy or who wish to change their previous proxy vote, Please send me your vote right now to annualmeeting2021tpbi.com. Please include your name, your 16 digit voting ID code and the number of shares of stock being voted by you in the email. The report of the inspectors with respect to all of the votes The time is now 11:0.4 a.
M, and I will pause for a moment to allow for email voting on all proposals to commence. Voting will remain open until the end discussion of all proposals. The first order of business is the election of directors. The following individuals nominated by the Board of Directors are the only persons properly nominated to serve as members of the Board of Directors in accordance with the company's bylaws: Lawrence S. Wexler, Gregory H.
A. Baxter, Ashley Davis Fruschone, H. C. Charles Dow, David Glasek, I will pause for any comments via email. Is there any discussion?
There being no comment on the proposal, discussion is closed. The next item of business to be active on is the approval of the 2021 Equity incentive plan. On March 22, 2021, the Board approved and adopted the plan, subject to the approval of the stockholders. The matter for the vote is resolved that the company's stockholders hereby approve the adoption by the company's Board of Directors of the 2021 Equity Plan. Is there any discussion?
There being no comment on the proposal, discussion is closed. The next item of business to be acted upon is ratification of the appointment of RSM US LLP as independent auditors for the fiscal year ending December 31, 2021. The matter for the vote is resolved that the company's stockholders hereby ratify the appointment of the audit committee of the company's Board of Directors of RSM US LLP as the company's independent auditors for the fiscal year ending December 31, 2021. Is there any discussion? There being no comment on the proposal, discussion is closed.
Phil King and Matt Coughlin of RSM US LLP are present and available to answer any appropriate questions after the There being no questions, the inspectors of election have presented their report to me, which is as follows. First, all of the 8 nominees have been elected as directors. 2nd, The proposal to approve the adoption of the 2021 equity plan has been adopted. 3rd, the proposal to ratify the appointment of RSM LLP as independent auditors for the company has been adopted. The report is available for inspection by stockholders and will be filed with the minutes of this meeting.
At the request of our Board at this time, there being no further business, I'm adjourning the meeting at 11:0:7 a. M. And ask Larry Wexler, Chief Executive Officer to present about the company's business. Thank you all for attending.
Thank you, Don. Good morning, everyone, and welcome to the Turning Point Brands Annual Meeting. Since this is the 5 year anniversary of the company going public, I would like to take a few minutes to review how the company has progressed over this period and then talk about why we are so excited about the future. After I finish, I'll turn the stage over to Louis Refomena, our new CFO to take you through an update on the business today. The company has made substantial progress since our IPO and we're very proud of how the business has developed.
Most obvious reflection of our progress is the stock price, Having gone public at $10 per share, it's currently trading in the high 40s. This reflects the growth of the business. At our IPO, sales were $206,000,000 and over the last 12 months are running at a rate of over $400,000,000 Our EBITDA was $52,000,000 and over the last 12 months, we've reported close to $100,000,000,000 This is an average growth rate of roughly 14% per year. This is a result of outperforming our competitors in virtually all our segments. Stoker's has grown from a 2.7 share in MST The 5.5 share at year end 2020.
The share of Stoker's MST in stores in which it has distribution It's almost doubled from 2016 to over 9 share in 2020. In Schuh, our total share is now over 30% Stoker's has gone from 17 share in 2016 to close to 25 share today. In total, Our Stokus segment has grown roughly has grown revenue roughly 11% per year through 2020 to $216,000,000 Zig Zag has had similar progress. For the full year 2016, our share of papers was 31%. And for the Q4 of 2020, We're running at 36% and sales in the U.
S. Are running 30% higher than they were in 2016, with growth accelerating in each of the past 2 years. Perhaps more importantly, in 2016, we had not yet entered the growing cone market. In the latest 13 week period, We're the number one company in cones in MSI measured by MSI with a share of 41%. Better yet, There's enormous remaining opportunity for this product.
While our share in wraps is lower today than it was in 2016, the category is larger And our revenues were up 43% or close to 9% per year. We have also entered new markets. Our vape business is now a third of our revenues compared to roughly 8% in 2016. We are now invested in cannabis With our investments in DOSIS and Morley and our international business has expanded through our partners in South America, Europe and our investment in rec marketing in Canada. International revenue should be running at close to $20,000,000 rate by the end of the year.
We could not be more excited about our future. As Louie's presentation will highlight, we are maintaining our momentum in Stoker's MST and with same store sales growing at close to double digit rates And with only 62% distribution, we have a long runway for growth. The Stoker's brand also continues to outperform the chew category. The new product and channel initiatives we have implemented for the Zig Zag brand have accelerated its growth. The entire team is very excited about the progress we have made.
In the measured channels, our papers are now number 1 brand, and we sell at a premium to our competitors. We have become the leading cones marketer in just 2 years, and this segment is growing with great potential outside the measured market. In wraps, we have new products being introduced over the next few quarters That will allow us to compete in the 20% of the market where we presently do not have entries. All these businesses are highly leveraged cannabis And we see a lot of opportunity for growth in these segments. We have begun to build out our assets in the cannabis space We're building a broader portfolio of brands to supplement Zig Zag.
We believe there'll be significant value in brands as market moves away from its current undersupplied situation. In vape, we believe that we have positioned ourselves for 2 transformational events in the industry, The PMTA and the PACT Act, which gives us healthy growth options going forward. The team has submitted to the FDA What may be the broadest portfolio of products in the industry, the value of these products will emerge as the FDA starts to ramp up enforcement of the companies that cannot meet their rigorous requirements. The PACT Act will transform logistics in the vaping space and will be very disruptive. Our team has responded very quickly and rebuilt our transportation infrastructure in just a few weeks.
Are being approached by a number of companies that are not confident they can continue to operate under this regime, which provides us with market share and partnership opportunities That will play out over the next few quarters. Our new ventures group has developed our white pouch entry free That has tested very well is in the process of being rolled out. This product is positioned at the higher end of the nicotine spectrum And that is where the consumers have been trending. We are optimistic that we will carve out our space in this growing category. And this group is just hitting their stride and there are more new products on the horizon.
We see progress across the entire company. A lot of the unsung departments are also making great strides. Our manufacturing organization has efficiency and capacity programs in place They're starting to get results. We have consolidated all our fulfillment operation in Louisville, a process that will pay dividends in the future. Our sales force is expanding, which should improve the reach and awareness of our products.
It's been a privilege To be the CEO of Turning Point Brands since its IPO, and I'm gratified by the progress we have made. I could not be more excited about the future As I believe the best is yet to come. We have an outstanding team that is focused on winning in the marketplace And works hard. I'm getting better every single day. You'll be seeing the benefits of this effort in the future.
And with that, I'd like to turn it over the podium over to Louie.
Sorry, it looks like screen sharing has been disabled. Do we have anyone down that can fix that for us?
Wayne, if you're listening, can you fix that for Louie, please?
If not, I'll send you the presentation, Don, and I think you are the host.
It should be enabled now, Louis.
Okay. One second. All right. Thank you, Larry. And thanks everyone for joining.
So I'll just give a quick overview of the company and touch on our recent results. Here's our standard disclaimer page. So over the last few years, we really repositioned the company and today we view ourselves As a branded consumer products company with an attractive growth profile. We've got 2 highly profitable and stable core brands that serve as our pillows and that's Zig Zag And Stoker's. Zig Zag is the number one rolling paper and cigar wraps brand and it is benefiting from the secular growth trends that season its end markets.
Stoker's is our other core brand. It is a number 2 brand and a number 1 value brand in tobacco chew. But more importantly, the driver of the growth here is our moist snuff Tobacco product, otherwise known as MST or DIP, where we are the leading value brand and the fastest growing brand in the category. NewGen is our 3rd segment, so we focus on the next generation of products here. It was built through a series of acquisitions in the vape distribution space.
The big driver here, which we will touch on later is the upside opportunity from the PMTA process, which we think is going to take A highly fragmented market and transform it into a consolidated market that will create significant barriers to entry. So in the back of our segments, we've maintained a lean asset light and low cost operating model. Our CapEx roughly around 1% of sales, so that allows us to generate a steady stream of free cash flows from businesses that have been proven to be recession resistant. And overall, as Larry mentioned, we've made some significant upgrades to the company since our IPO in 2016. We've streamlined our cost structure, we've repositioned the company for growth and that has led to our recent financial success and we're finally starting to demonstrate the Leverage that is inherent in our business.
So in 2020, we saw 12% sales growth, but we delivered 34% adjusted EBITDA growth. That strong performance has continued into the Q1 of the year where we saw 19% revenue growth and 57% EBITDA growth. Going forward, our outlook remains bright. We raised our guidance in our last earnings call and we're expecting another year of strong double digit EBITDA growth. We've got over $150,000,000 of cash in our balance sheet and we expect to generate well over $100,000,000 of EBITDA this year.
So moving on to the next slide. So this slide shows that brains are important to our business And that we generate the revenue that we generate within our each segment is really driven by these 2 core brands with Zig Zag And Stoker's and we use these brands to introduce a lot of either new brands or that we develop internally or acquire brands that we have in our portfolio. You see there, doses and Marley, which are recent acquisitions in or investments in the cannabis space. So we view the cannabis space as a large and growing end market. You should look for us to continue to increase our exposure In that market.
So one of our strengths as a company that makes us unique is a powerful sales and distribution infrastructure. Our products reach over 210,000 retail outlets in North America. We have a very strong presence in independent convenience stores and leading chain accounts. We also have strong e commerce platforms for our brand and our vape distribution businesses. I'll get into more detail on our alternative channel strategy to reach head shops and dispensaries, But we are now able to reach consumers of our products where they want to shop.
So this slide just shows the brands that we have within each of our segments and the revenue we generate within them along with our strategic priorities, which I will get into later in the presentation. So you can see from this chart that we've got a very diversified portfolio of product lines that complement each other very well. Our 2 core brands in Zig Zag and Stoker's make up a vast majority of the profitability of the company and of our growth. So both are recession resistant businesses that generate stable free cash flow and we also have a ring fenced new gen segment that does not contribute much of our profitability today It provides a lot of optionality and potential upside from the PMTA process and the development of our new products within our Nu X business in NewGen. So we not only benefit from a diversified product categories, but also our diversified end markets.
We're in cannabis accessories, smokeless tobacco And entering into other alternative actives as well, such as non tobacco nicotine, CBD and nutraceutical products. We've been continuously expanding the size of our addressable markets that we compete in and we'll continue to do that going forward. So starting off, our first segment is Zig Zag Products. Well over half of our operating profits come from Zig Zag and it is now our fastest growing segment and it will continue to be positioned to benefit from the secular growth trends that you're seeing in cannabis consumption. So there's 2 main products in this segment that Primarily uses cannabis accessories.
Zig Zag is the number one rolling paper brand. Rolling paper is our most iconic product. That makes up about half of our revenues in this segment. So we have a perpetual license there in the U. S.
And Canada that we've had since 1992. That renews every 20 years with the next renewal date in November 2032. And the other half of the segment is the make your own cigar wrap brand. So think about that as an outer shell of the cigar, which are primarily used as cannabis accessories. So we own the mark for that cigar wraps business, which is the other half So when you look at the brands in the cannabis market today, Zig Zag really stands out as one of the most iconic Brands and the strongest brands in the space.
It's a history that dates back over 120 years and with recognition that is unparalleled in the market, Woven into pop culture, whether it's Andy Warhol sketches or Doctor. Dre's chronic cover album. But until recently, the business was underinvested relative to the large opportunities we had in front of it. And part of that was Because the company was distressed for a long period of time prior to our IPO. So we changed that in mid-twenty 19 by developing Growth initiatives that you see on the right here to address some of the glaring holes we had both from a channel and a product perspective and reposition The business for growth.
So that those included building out an e commerce platform from scratch. And we mentioned in our last call that e commerce was Over double digits of our U. S. Papers business now coming from a base of 0. We developed a strategy for what we call the alternative channel, which includes head shops Dispensaries, which are large parts of the market that we are seeing growth in, but where we were underrepresented in that was a channel that we weren't Calling on directly.
So we are also extending the brand and our offerings into large and growing product categories. Larry had mentioned paper cones earlier. So cones are a more convenient product for the consumer. And one cone effectively sells for 4 to 10 times the Price of an individual sheet of our regular rolling paper at retail. So it's a significant increase to our addressable market on a per uses basis as Cone penetration continues to rise.
So in addition to paper cones, we'll have even more products introduced in the market later this year, Which we think will add to our growth. So as a result of the initiatives that we have put in that you see there on the right, We took a business that didn't really see much growth from 2016 to 2019 to a business that saw 22% growth in 2020 with the majority of that coming from the internal initiatives that was mentioned. Our market share in U. S. Papers, which has been flat since the IPO, was up 250 basis points to 34% in the measured market And finish at its high points over 36%, as Larry mentioned.
So our volume growth in the measured market was Almost twice that the rest of the market during the year. E commerce, as I mentioned, was non existent in 2019, was double digit Our U. S. Papers business in the second half, cones went from 0% of our sales in 2018 to over 10% of our sales in the U. S.
Papers business in the Q4 and that ramped to 19% in the Q1 of this year. We expect that to continue to ramp going forward. Zig Zag has been our most profitable segment, but now it is our fastest growing segment And we're guiding to another year of double digit growth in this segment, strong double digit growth for the year. So when you think about Zig Zag, There's really two parts to this story. We've got an incredibly strong secular tailwind with the increased cannabis consumption.
That is being driven by legalization and more importantly, the change in public perception around cannabis. And more important, There is a second piece of the growth driver, which is the self help aspect here. We fundamentally changed the growth profile of the business through these growth initiatives. And we believe we are still in the early innings of realizing the benefits as we keep leveraging the power of the brand to keep extending our market opportunities. So unless unlike other names that has exposure to the cannabis space, our business generates A significant amount of free cash flow.
We've used our positioning sometimes it's better to be selling the picks and shovels when you're in a gold rush, which is Where we believe we are. So just on the cannabis legalization trends, according to the latest Gallup poll, 7% out of 7 out of 10 for Americans now For legalization nationwide from a recreational use, that's approximately double the rate of Acceptance 20 years ago. At the end of 2020, 15 states and DC have legalized recreational use of cannabis. That is now up to 18 states at the beginning of this year. And we expect that to be continuing to be tailwinds for us as more states turn to legalization.
And we expect further upside potential to our product offerings because of that. So this next slide kind of just shows the growth projected growth that you are seeing in the cannabinoid market. The legal U. S. Cannabis market is expected to double from $16,000,000,000 to $34,000,000,000 in 2025.
A lot of these estimates were before some of the newer states have legalized, especially New York, which is a large market that will Expand that growth going forward. We're also in this U. S. CBD market, which is expected to have a double digit growth over the next 5 years. We think that the investments that we made in expanding the Zig Zag brand Enormous potential to gain a significant share of this large and potential large potential addressable market and it is one of the most recognized brands in the space and one of Few truly national brands with the opportunity to succeed.
In addition, our recent strategic investments with Wild Hemp Pets, Dosis and our Marley CBD brand and Marley THC brand provide a lot of optionality to participate in these markets by alternative product categories and channel and categories. Formally, however, our business is not Posed directly to the cannabis flower and therefore we're not exposed to that regulatory risk is in your stock exchange Listed company. So this just shows the impact of legalization in the markets that we participate in. You could see on the paper side on the left, stronger growth in the adult rec states versus the non rec states. This is actually the data here is masked by the fact that there is a shift from the measured TAM channel to non measured channel When a state goes legal as purchasing shifts away from convenience stores into head shops and dispensaries, which are not in our measured channel.
And so that growth would be much stronger if you add that growth that's being seen in that market. The wraps market on the right is more representative of what happens In a legal state just because of the wraps of tobacco products, so the purchasing there tends to stay in convenience stores that can sell tobacco And you see double the growth over the last couple of years, more than double the growth over the last couple of years in states that are adult Legal versus those that are non legal. And as I mentioned before, we saw really strong growth with Zig Zag given the Initiatives that we put in place exiting 2019 2020, so businesses that have not grown much saw 22% year over year growth in 2020. That momentum has carried into the Q1 of this year where we saw over 40% growth in that segment. And moving on to Stoker.
So there's 2 parts of the business of Stoker's. 40% of the segment is the original tobacco chew business And 60% of the segment is our MST business. That mix was opposite when we went public and we've shifted towards that mix as MST has driven the growth the last few years, it's about which is really an annuity business for us. The real growth driver is MST where we've seen double digit growth over the last couple of years. We've seen a nice acceleration driven by our same store sales gains along with continued expansion of our distribution on the back of some large wins with some meaningful chain accounts over the last couple of years.
In terms of the industry in MST, 85% of the volumes in this market are from our large competitors. It's a very rational category. We're priced 40% below, But we think our product is a premium product, so that is driving adoption by the consumer. And there's also a secular trend towards the Value category here, which we are benefiting from. In addition, because of the rationality of our competitors in the industry, The industry tends to take 5% to 7% of pricing every year.
So going forward, we expect strong trends to continue. We're still in the only roughly 61% of the volume weighted distribution of the category and have less than 6% of the volume share of the market. So there's still plenty of runway here for us to grow, especially the value segment where we play continues to gain share in that category. You see the results that we've seen. We've had nice double digit growth over the last couple of years and you're seeing that growth in our gross profit as well.
And so our 3rd segment is NewGen. So NewGen is our platform for our new next generation proprietary products. We've built it through a series of acquisitions in the base Distribution side since our IPO. The expectation here is to drive profitability by increasing the mix of proprietary products within NuGen, so right now it stands at 20%. We think the big catalyst for that is the PMTA, Which is an FDA process to get approval to stay in the market.
The market is currently in the market with the market we play in, which is the open tank market, is currently Highly fragmented market and this will essentially consolidate that market and take it from hundreds of manufacturers to a handful. So the segment is currently made up of mostly these lower margin third party products that comprise 80% of the sales. As we increase that mix, We think we can move our gross margins from this business from 30% today and over time closer to the 50% gross margins that we are seeing in our core businesses. So within this segment, we also have a new X division where we have launched a number of new products. You can see them on the right of the slide into the market, including CBD, nutraceuticals and more recently, a white nicotine pouch under the brand name Free.
This segment Overall, it's currently the smallest contributor to our profitability. We expect it to generate less than 10% of our EBITDA in the short term. But in essence, we've set the business up to generate free cash flow and be self funded today, but positioned it to be able to participate in the upside from the PMTA process along with the growth that we can see with this new products in UX. So these are just a summary of our results from last year and how we ended the year. As we mentioned, we saw a nice sales growth of 12% with adjusted EBITDA Dagh, growing 34% for the full year.
Nice free cash flow generation increase year over year as well. And with that asset light operating model, we expect to continue to generate sizable free cash flow, which we will Expect to use to invest to continue to grow the business. We saw 90% $90,000,000 adjusted EBITDA growth $90,000,000 of adjusted EBITDA in 2020 with only $6,000,000 of CapEx. And so we're guiding this year to have $103,000,000 to $108,000,000 of adjusted EBITDA with CapEx Staying at similar levels, which should lead to strong free cash flow generation again. And you see here our leverage since we went IPO, we've taken it down from 6 times to 3.1 times at the end of 2020.
We finished Q1 with an LTM leverage ratio of 2.7 times. So very well positioned from a balance sheet perspective, which gives us a lot of This is just an update of the recent results. We had our earnings call Last week, where we increased our guidance for the year, we saw net sales growth of 19% year over year and adjusted EBITDA growth of 57 percent year over year. We guided to sales being up this year with double digit increases in our core business and a decline in new gen because of some of the comps that we have last year and some of the noise around short term noise around the PMTA that we think it's going to be a long term positive for us. And as I mentioned, adjusted EBITDA is expected to be $103,000,000 to $108,000,000 for the year, and that is up from the previous guidance of $99,000,000 to $105,000,000 And really what we're seeing is a lot of the internal growth initiatives that we've put in place driving a majority of this growth with the core businesses Outpacing the growth that they are seeing in their markets, with rolling papers and wraps, seeing the secular trends From increasing increased NAMS consumption and Stoker seeing the benefits of consumers down trading and value category continue to increase its share within The MST business.
And so that led to pretty strong operating leverage in Q1. We saw 60% incremental EBITDA margins on top of the 19% sales growth, which led to that 57% adjusted EBITDA growth. In addition, we also made an investment in Doc Light, which added the Marley brand to our TPV portfolio. We are pretty excited about that given The combination of Zig Zag and Marley gives us 2 of some of the strongest brands in markets to compete in. And even with that, we've got $180,000,000 of available liquidity, well capitalized as you saw in the balance sheet.
So We are well positioned to take advantage of the market opportunities that we see going forward. So with that, I just want to turn that to
Thank you, Louis. So at this time, we'll open up for questions. Don, I believe the question should be emailed to do you have the address?
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