Jack Daniels Says Marijuana Legalization Is Risk

Marijuana legalization may put pressure on alcohol companies, and they know it.

The maker of Jack Daniels, Brown-Forman (NYSE: BF-A) (NYSE: BF-B) released its annual report Thursday, which included a laundry list of risks. Among them, recreational marijuana: “Consumer preferences and purchases may shift due to a host of factors, many of which are difficult to predict, including… the potential legalization of marijuana use on a more widespread basis within the United States.”

Recreational marijuana use is currently permitted in Colorado and Washington, and 20 states permit medical use.

The most widely acclaimed cannabis stock specialist, Alan Brochstein, believes that alcohol firms have reason to worry. Brochstein commented to Benzinga, “Big Alcohol is watching marijuana legalization closely, and its very likely that these companies are highly concerned. Cannabis legalization is likely to lead to a substitution effect.”

However, some think marijuana legalization will have tremendous synergies with alcohol companies.

Related: Cannabis Investors Preparing For Industry Data From WeedStock

Mike Zapolin, CEO of Zappy Inc commented, “This is similar to record companies when the internet came out. If they had embraced it and marketed around synergies, they would be loving the outcome.” Synergies between alcohol and marijuana could boost both industries to new heights, according to Zapolin.

Industry changes of this nature are what investors are lining up to hear about at the WeedStock conference in Denver later this month. Brochstein and CEOs of the most recognized marijuana firms will discuss topics investors need to hear before placing funds into cannabis companies.

At last check, no other publicly traded entities had a disclosure of this nature. Nonetheless, that is not to say others are at risk. Along with other beverage firms, Pharmaceutical companies are being widely discussed as potential victims of increased marijuana use.

Benzinga has contacted Brown-Forman for comment and is awaiting reply.

Spots for WeedStock are very limited-- investors in the cannabis industry should register as soon as possible. Benzinga readers can get $200 off a three-day pass with coupon code "BENZINGAWEEDSTOCK".