The legalization of cannabis and the rise in marijuana use as a substitute for alcohol is putting noticeable pressure on the alcohol industry, according to the head of the company behind major liquor brands like Jack Daniel’s and Woodford Reserve.
Lawson Whiting, CEO of Brown-Forman Corporation, said during a Thursday earnings call that a 5% drop in net sales can be traced largely to three factors: changing generational preferences, the increasing use of weight-loss drugs, and growing cannabis consumption.
“We’ve been saying that for a year and a half now,” said Whiting, who noted there’s some disagreement in the industry over how much cannabis is hurting alcohol sales. “We’d be naive if we didn’t say that there isn’t some pressure coming from those.”
He said while inflation and tighter budgets continue to play a role, there’s no denying marijuana is drawing some consumers away from liquor. He pointed out that international markets like Europe are facing similar economic challenges but haven’t seen the same impact, as most European countries haven’t legalized marijuana.
A press release issued alongside the earnings report also listed the “further legalization of marijuana” as a risk factor, citing evolving consumer preferences and purchasing habits as key uncertainties for the company.
“While our results did not meet our long-term growth aspirations, we made important progress in an exceptionally challenging macroeconomic environment,” said Whiting. “Looking ahead to fiscal 2026, we expect continued headwinds.”
