Vice Stocks Enter ’26 With a Harsh Hangover

It’s easy to see how investors in vice stocks could develop a severe case of the spins from 2025. 

Some rose, some fell, and seldom at the same time. Nicotine pouch-maker Zyn’s parent company, Philip Morris International, soared nearly 34%, and Budweiser-maker AB InBev ended the year up about 29%. Drink-maker Molson Coors, however, tumbled 18%.

A Dizzying Year

From cannabis to tobacco and betting to liquor, vices faced major roadblocks last year as consumers saved their beer money for essentials and regulators tried to adapt to rapidly changing markets. 

Let’s break it down sector by sector, starting with the one that had the most recent shakeup:

• Cannabis: President Trump signed an executive order last month knocking marijuana’s federal status down from Schedule 1, which covers highly addictive drugs with no accepted medical usage (such as heroin), to Schedule 3, which includes drugs like ketamine and Tylenol. The rescheduling was the biggest regulatory moment for cannabis since 1970, but companies are still waiting on federal legislation. And while they wait, investors are feeling wary of the sector as it faces challenges accessing financial services (dispensaries are cash and debit only) and capital. 
• Nicotine: The shift to smokeless is in full swing, with 41% of Philip Morris’s revenue coming from smoke-free products like Zyn. The company in September convinced a federal judge to quash a class-action lawsuit that alleged Philip Morris overcharged customers for Zyn, the only FDA-approved nicotine pouch, because its $16 billion purchase of Zyn-maker Swedish Match hurt competition in the sector. 
• Alcohol: Sales of beer, wine and spirits continue to fall flat with some exceptions. Molson Coors lost $2.9 billion in the fall quarter and expects sales to fall about 4% this year. It, along with Heineken, laid off hundreds of employees this year. AB InBev, meanwhile, reported its slowest profit growth since 2021 in October. Alcohol sellers continue to grapple with a sober-curious trend that analysts don’t think is going away. 

Happy Hour: Still, the mood isn’t all gloom and doom. Vice stocks are “almost the opposite of the AI trade,” Bloomberg Intelligence analyst Kenneth Shea said. “They’re recession-proof.” So while some sectors face unique challenges, they’re not going anywhere.