Canada: beer sales fall further since cannabis legalization

Beer Canada, the Canadian Beer Industry Association, reports that overall beer sales declined by 3% during the first full year of cannabis legalization.

«This is much worse than the trends observed between 2014 and 2018, when beer industry volumes fell by an average of 0.3%,» said declared Vivien Azer, an analyst at Cowen.

Canadian beer was the hardest hit, with a 3.9% decline from November 2017 to November 2019. However, imported beer volumes increased by 1.4% over the same period. Vivien Azer notes that cannabis users seem to prefer traditional beer «because they’re looking for a better «high per dollar.»»

The analyst also believes that beer sales could decline further in 2020, now that the eedible and concentrates are legal, even though they are not widely available in the country at this time.

The cannabis industry still lags far behind the alcohol industry. Cumulative cannabis sales reached 1.5 billion Canadian dollars (1 billion euros) in the first year of legalization, while beer accounts for more than 9 billion, and alcohol overall for 23 billion.

These figures are, however, consistent with several studies that have found a correlation between cannabis legalization and a decrease in alcohol consumption. A 2017 study revealed that alcohol sales have declined significantly in states that have legalized medical cannabis.

However, the impact of legal cannabis on the alcohol industry is not yet clear. Many U.S. states report that alcohol sales remain as strong as ever. «There has been a lot of misinformation,» said declared Last year, Chris Swonger from the Distilled Spirits Council to the Business World. «We saw no impact in the states we examined,» including Washington, Oregon, and Colorado.

To avoid losing too much market share to legal cannabis, some alcohol companies have chosen to invest directly in the cannabis industry. Constellation Brands, the distributor of Corona in the U.S., for example, has invested $4 billion in Canopy Growth.

Others launch products directly, such as Molson Coors with its own line of CBD beverages non-alcoholic sparkling drinks.