Marijuana Legalization Is Putting ‘Pressure’ On Alcohol Industry, CEO Of Jack Daniel’s Parent Company Says Amid Profit Losses

The growing use of marijuana as an alternative to alcohol is putting
“pressure” on the spirits industry, contributing to a decline in profits in
recent years, the president of a major alcohol company with ancillary
brands such as Jack Daniel’s and Woodford Reserve says.

During an earnings call on Thursday, Brown-Forman Corporation CEO Lawson
Whiting was asked how to account for a 5 percent decline in net sales
across its portfolio of alcohol companies. Beyond lower levels of
discretionary spending among the public, he said, it largely comes down to
the “same big three.” That is: generational trends, novel weight loss drugs
and cannabis.

“We’ve been saying that for a year and a half now. And I know on the
sell-side that the world seems to be a little bit split on the extent of
the pressure that it’s putting on our category,” he said. But he seemed to
acknowledge that there is at least some degree of pressure that the
marijuana market is putting on alcohol manufacturers.

“We’d be naive if we didn’t say that there isn’t some pressure coming from
those, but I still would argue that it is the consumer and their wallet
just doesn’t have as much money in it,” he said.

Whiting also commented on international trends and said that “Europe has
largely been seeing trends that are really the same as The United States,
yet they don’t have the cannabis issue,” as few countries in the continent
have enacted legalization in the way that’s been seen across the U.S.

In a disclaimer section of a press release on Thursday, Brown-Forman also
noted that “changes in consumer preferences, consumption, or purchase
patterns” are among the “risks and uncertainties” for the alcohol company.
And it specified that such market disruptions include “further legalization
of marijuana,” among other factors.

“While our results did not meet our long-term growth aspirations, we made
important progress in an exceptionally challenging macroeconomic
environment. Looking ahead to fiscal 2026, we expect continued headwinds,”
Whiting said. “Still, we are confident that with agility, innovation, and a
clear focus on execution, we are well positioned to navigate uncertainty
and unlock new opportunities for sustainable long-term growth.”

Last year, financial analysts with Bloomberg Intelligence (BI) separately
said they expect the expansion of the marijuana legalization movement will
continue to post a “significant threat” to the alcohol industry, citing
survey data that suggests more people are using cannabis as a substitute
for alcoholic beverages such a beer and wine.

In 2023, a multinational investment bank similarly said in a report that cannabis
has become a “formidable competitor” to alcohol, projecting that nearly 20
million more people will regularly consume cannabis over the next five
years as booze loses a couple million drinkers. It also says marijuana
sales are estimated to reach $37 billion in 2027 in the U.S. as more state
markets come online.


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Another study out of Canada, where marijuana is federally legal, found that legalization
was “associated with a decline in beer sales,” suggesting a substitution
effect.

The analyses comport with other recent survey data that more broadly looked
at American views on marijuana versus alcohol. For example, a Gallup survey
from last year found that respondents view cannabis as less harmful than
alcohol, tobacco and nicotine vapes—and more adults now smoke cannabis than
smoke cigarettes.

Meanwhile, a federally funded study into the effects of cannabis on alcohol
use that was released earlier last month found that people who used
marijuana immediately before drinking subsequently consumed fewer alcoholic
beverages and reported lower cravings for alcohol.

The study followed another survey analysis published in March that showed three
in four young adults reported substituting cannabis for alcohol at least
once per week—a “fast-emerging” trend that reflects the “rapid expansion”
of the hemp product marketplace.

The findings were largely consist with a growing body of studies indicating
that cannabis—whether federally legal hemp or still-prohibited marijuana—is
being utilized as a substitute for many Americans amid the reform movement.

An earlier survey from YouGov, for example, found that a majority of
Americans believe regular alcohol consumption is more harmful than regular
marijuana use. Even so, more adults said they personally prefer drinking
alcohol to consuming cannabis despite the health risks.

A separate poll released in January determined that more than half of
marijuana consumers say they drink less alcohol, or none at all, after
using cannabis.

Yet another survey—which was supported by the National Institute on Drug
Abuse (NIDA) and released in December—found that young adults are nearly
three times more likely to use marijuana than alcohol on a daily or
near-daily basis.

That poll provided more granular, age-specific findings than a similar
report published last year, finding that more Americans overall smoke
marijuana on a daily basis than drink alcohol every day—and that alcohol
drinkers are more likely to say they would benefit from limiting their use
than cannabis consumers are.

A separate study published in the journal Addiction last year similarly
found that there are more U.S. adults who use marijuana daily than who
drink alcohol every day.

In December, BI also published the results of a survey indicating that substitution
of cannabis for alcohol is “soaring” as the state-level legalization
movement expands and relative perceptions of harm shift. A significant
portion of Americans also said in that poll that they substitute marijuana
for cigarettes and painkillers.

Yet another study on the impact of marijuana consumption on people’s use of
other drugs that was released in December suggested that, for many, cannabis
may act as a less-dangerous substitute, allowing people to reduce their
intake of substances such as alcohol, methamphetamine and opioids like
morphine.

A study out of Canada, where marijuana is federally legal, found that legalization
was “associated with a decline in beer sales,” suggesting a substitution
effect.

The analyses comport with other recent survey data that more broadly looked
at American views on marijuana versus alcohol. For example, a Gallup survey
found that respondents view cannabis as less harmful than alcohol, tobacco
and nicotine vapes—and more adults now smoke cannabis than smoke cigarettes.

A separate survey released by the American Psychiatric Association (APA)
and Morning Consult last June also found that Americans consider marijuana
to be significantly less dangerous than cigarettes, alcohol and opioids—and
they say cannabis is less addictive than each of those substances, as well
as technology.

70 Percent Of Americans Support Allowing Marijuana Use At Casinos And
Resorts, New Poll Shows

The post Marijuana Legalization Is Putting ‘Pressure’ On Alcohol Industry,
CEO Of Jack Daniel’s Parent Company Says Amid Profit Losses appeared first
on Marijuana Moment.