By Lucas De Vries

January 13, 2020
Reading Time: 2 minutes

Beer
Canada, Canada’s beer industry association, reports that overall beer sales
declined by 3% in 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 Vivien Azer, an analyst at Cowen.

Canadian beers have been the most affected, with a 3.9% decline from November 2017 to November 2019. But imported beer volumes increased by 1.4% over the same period. Vivien Azer notes that cannabis consumers seem to prefer traditional beer “because they are looking for a better ‘effect per dollar’.

The analyst
also estimates that beer sales could decline further in 2020, now that edibles
and concentrates are legal, although not widely available in the country at
present.

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

legal cannabis impact

Nevertheless,
these figures are in line with several studies comparing the legalization of
cannabis with a reduction in alcohol consumption. A 2017 study found 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 recorded. Many U.S. states report continued strong alcohol sales. “There has been a lot of misinformation,” said Chris Swonger of the Distilled Spirits Council to Business World last year. “We saw no impact in any of the states we looked at,” including Washington, Oregon, and Colorado.

To avoid
giving up too many places to legal cannabis, a few alcohol companies have
chosen to invest directly in the cannabis industry. Constellation Brands, the
distributor of Corona in the USA, for example, has invested $4 billion in
Canopy Growth.

Others are
launching products directly, such as Molson Coors with its line of CBD
sparkling non-alcoholic drinks.

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