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.
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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 Read More
