Due to cannabis? Canada’s beer consumption declines

Canada | In the first full year of cannabis legalisation, the nation’s domestic beer production fell 3.9 percent over 2018, according to data from Beer Canada, a trade body. The drop in consumption was less pronounced, though, as beer imports grew 1.4 percent.

As reports the news site fooddive.com, the decline is worse than in previous years. Between 2014 and 2018, beer volumes fell by an average of 0.3 percent. Market observers wonder if beer volumes taking a hit is a consequence of Canada legalising recreational cannabis in late 2018.

Per fooddive.com, the legal Canadian cannabis market is still small, not least because of a lack of licensed dispensaries, which implies that the black market for cannabis continues to thrive.

Annual – legal – sales of cannabis are estimated at CAD 1.5 billion (USD 1.15 billion) compared to CAD 9.2 billion (USD 7 billion) for beer and CAD 23 billion (USD 17.6 billion) for alcohol, according to fooddive.com.

That’s still a lot of weed

Although the correlation between cannabis and beer consumption is merely a conjecture, market observers are convinced that the Canadian numbers should serve as a warning to other countries mulling the legalisation of recreational cannabis.

In Canada, worse may come. In December 2019, the country began allowing the sale of some cannabis-infused products – that is edibles, beverages, topicals and extracts. More items are expected to hit shelves in the upcoming months.

Most likely, the launch of these newly legal cannabis products will perpetuate the trend of declining beer volumes.

But this will be small consolation to brewers like AB-InBev and Molson Coors, who have set up joint ventures to produce cannabis-infused products. Since they will need to charge a high price for them, there is no guarantee that sales of cannabis edibles or drinkables will balance out their declining beer shipments.