Is Cannabis Replacing Beer? Canadian Study Links Weed Legalization To Drop In Alcohol Sales

A new study published in Drug and Alcohol Dependence suggests that legalizing cannabis is "associated with a decline in beer sales" and consumption. 

The study, conducted by a team from the University of Manitoba, Memorial University and the University of Toronto, examined beer sales data in Canada before and after the legalization of recreational marijuana in 2018.

Researchers observed an immediate drop of 96 hectoliters per 100,000 people, followed by a further monthly decline of four hectoliters per 100,000 people. This translates to an average monthly decrease of 136 hectoliters per 100,000 people post-legalization. A hectoliter is a metric unit of capacity equal to one hundred liters.

Data from the 2022-23 fiscal year shows that Canada generated more excise tax revenue from cannabis ($660 million) than from wine ($205 million) and beer ($450 million) combined. This economic shift highlights the potential impact of cannabis legalization on the alcohol industry.

The study’s authors interpret these findings as evidence of a “substitution effect,” where individuals are opting for cannabis over beer as their intoxicant of choice. This theory is further supported by the observation that the decline was specific to canned and kegged beer, which are often associated with at-home consumption.

The study aligns with recent trends in the U.S. where several states with legal cannabis have reported cannabis surpassing alcohol sales. Then there's the 2022 Gallup poll that found Americans viewed cannabis to be far less harmful than alcohol, potentially contributing to the shift in consumption patterns.

Tilray: Getting In On Both Beer And Weed

Last August, Canada-based Tilray Brands TLRY acquired eight beer and beverage brands from Anheuser-Busch BUD, making it the 5th largest craft beer business in the U.S.

Man With A Plan

Tilray chairman and CEO Irwin D. Simon told Benzinga in 2021 that he was set to capitalize on cannabis legalization in the U.S. and intended to create beer infused with cannabis.

"Upon legalization (in the U.S.) one day, we will infuse these drinks with THC, with CBD, but we'll have the distribution and we'll have the brands when and if legalization does happen," Simon said this past August.

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