As a result of increasing marijuana use as an alternative alcohol, profits have been declining in the last few years. This is according to a president from a large alcohol company that has ancillary brand names such as Jack Daniel’s or Woodford Reserve.
Lawson Whiting, CEO of Brown-Forman Corporation was asked to explain a decline in sales by 5 percent across the portfolio. He said that the main reason for the decline in discretionary consumer spending was the same “big three”: generational trends, novel weight loss drugs and cannabis. It’s a combination of generational changes, new weight loss medications and cannabis.
We’ve said that for over a year now. He said that he knew that there was a split in the market on whether or not the marijuana industry is putting pressure on alcohol manufacturers. He seemed to admit that alcohol producers are under some pressure from the marijuana industry.
He said: “We would be naive to say there’s not some pressure from them, but I’d still argue that the consumers are at fault and that their wallets just don’t contain as much cash.”
Whiting commented also on the international trend and stated that, “Europe is seeing a lot of the same trends as the United States but they do not have the marijuana issue” as very few countries have legalized cannabis in the U.S.
Brown-Forman noted in a section on disclaimers of its press release from Thursday that the company faces “risks and uncertainty” due to “changes” in the preferences or patterns of consumption by consumers. It also stated that “further marijuana legalization” is one of the factors which could disrupt markets.
While our results didn’t meet our growth goals, we still made significant progress in a macroeconomic climate that was exceptionally difficult. Whiting noted that the company expects continued headwinds for fiscal 2026. We are still confident, however, that we can navigate the uncertainty with our agility, innovative thinking, and clear focus on execution.
Financial analysts at Bloomberg Intelligence said separately last year that they expected the legalization of marijuana to continue to pose a “significant” threat to the alcohol sector, citing data from surveys which suggest more people use cannabis to replace alcoholic drinks such as beer and wine.
According to a 2023 report by a multi-national investment bank, cannabis will be a formidable competitor for alcohol in the coming years. The bank projected that over 20 million additional people would consume cannabis regularly during that time, as booze is expected to lose a couple of million drinkers. The report also states that marijuana sales in the U.S. are expected to hit $37 billion by 2027 as new state markets open.
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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.
These analyses are in line with recent data from other surveys that looked more widely at American attitudes towards marijuana and 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.
In a study funded by the federal government and released in early November, it was found that marijuana users who consumed alcohol immediately before using cannabis drank less alcohol afterward. They also reported a lower desire 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. However, despite health concerns, many adults prefer to drink alcohol over cannabis.
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. This poll also revealed that a large portion of Americans substituted marijuana and pain relievers for cigarettes.
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.
These analyses are in line with recent data from other surveys that looked more widely at American attitudes towards marijuana and 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.
A new poll shows that 70 percent of Americans support allowing marijuana use in casinos and resorts.
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