New Canadian Study Links a Decline in the Country’s Beer Sales to Cannabis Legalization

Researchers found a 'substitution effect' in which consumers are actively replacing alcohol with legalized marijuana.

A new social and cultural concept is beginning to crop up around the United States and other nations known as "Sober Curious." According to the Food Institute, Sober Curious is a social wellness movement involving individuals self-selecting from alcohol consumption without abstaining from drinking altogether.

The movement calls on people to take time to explore their relationship with alcohol and to experience the physiological and psychological benefits of shifting focus away from consuming alcoholic beverages. Instead of the rigid and strict "cold turkey" approach of total abstinence encouraged by various addiction recovery communities, the sober curious philosophy allows for a more gradual method for assessing one's personal connection to alcohol and social drinking.

Recently updated guidelines and advisories by the National Cancer Institute (NCI) have also contributed to a shift in perspective regarding alcohol intake. According to the NCI, even as little as one drink per day can lead to an increased risk of various cancers, rejecting outdated claims from the past that moderate drinking may promote overall health.

One significant factor in the rise in popularity of this non-alcoholic (N/A) movement is the simultaneous emergence of cannabis and hemp-derived products throughout the United States, Canada, and other Western nations.

Now, according to a new study by Canadian researchers, there is concrete evidence linking cannabis reform legislation and a decline in alcohol consumption. The study, published in the Drug and Alcohol Dependence Journal, found that, since Canada legalized adult-use cannabis in 2018, beer sales have dropped on a continual and consistent basis.

The researchers from the University of Manitoba, Memorial University of Newfoundland, and the University of Toronto stated, "Canada-wide beer sales fell by 96 hectoliters per 100,000 population immediately after non-medical cannabis legalization and by 4 hectoliters per 100,000 population each month thereafter for an average monthly reduction of 136 hectoliters per 100,000 population post-legalization."

"Canada-wide beer sales fell by 96 hectoliters per 100,000 population immediately after non-medical cannabis legalization and by 4 hectoliters per 100,000 population each month thereafter for an average monthly reduction of 136 hectoliters per 100,000 population post-legalization."

- Research Study from the Universities of Manitoba, Toronto and Newfoundland

They went on further to say that the data shows a "substitution effect" may be the reason for the decline, as consumers are increasingly choosing cannabis over beer as their preferred intoxicant.

"While increased use of cannabis is not necessarily harmless and further research is needed to understand the health effects of the switch from alcohol to cannabis, the reduction in beer sales associated with the non-medical cannabis legalization suggests that individuals are likely not using alcohol and cannabis concurrently," the study concluded.

"While increased use of cannabis is not necessarily harmless and further research is needed to understand the health effects of the switch from alcohol to cannabis, the reduction in beer sales associated with the non-medical cannabis legalization suggests that individuals are likely not using alcohol and cannabis concurrently."

- Research Study from the Universities of Manitoba, Toronto and Newfoundland

While the findings are significant, researchers quickly acknowledged that the identified trends did not apply to spirits (liquor) sales. Additionally, the study, broken down by beer type, indicated that "(cannabis) legalization was associated with declines in sales of canned and kegged beer, but there was no reduction in sales of bottled beer."

Along with the results of this study, Canadian officials also recently released taxation data revealing that the country collected more excise tax revenue from marijuana ($660 million) than wine ($205 million) and beer ($450 million) combined in the 2022-23 fiscal year, as first reported by MJ Biz Daily. 

The trend of cannabis sales exceeding those of alcohol is also being reported at the state level in several large jurisdictions across the United States. For example, marijuana sales in the state of Michigan far outpaced the purchases of wine, beer, and liquor combined during the most recent fiscal, according to a report by the legislature's nonpartisan House Fiscal Agency.

Likewise, legal cannabis sales during the last fiscal year in Illinois ($451.9 million) surpassed all alcohol sales by roughly $135.6 million. And in the states of Colorado, Arizona, and Washington in 2022, consumers spent more on marijuana purchases than alcohol and cigarettes combined. 

Research into the potential impact of legalized cannabis on the alcohol industry is still relatively sparse. However, there is more and more evidence showing that Americans and Canadians, particularly those under the age of 35, if given the choice of cannabis or alcohol, are shifting more and more to marijuana.

According to a report by multinational investment bank TD Cowen late last year, legal cannabis is driving consumers away from alcohol, becoming a "formidable competitor." The report projects that, over the next five years, nearly 20 million more people will regularly consume marijuana, while the alcohol industry sheds a couple million drinkers in that same period. The study also estimates cannabis sales will eclipse $37 billion in 2027 in the U.S. as more states legalize cannabis for recreational use.

Adding even more bad news for the alcohol sector is the emerging market for hemp-derived low-dose THC beverage offerings spreading across the U.S. With monthly sales topping over $1 million, the state of Minnesota, in particular, is reaping unprecedented financial benefits from the "substitution effect."

As the 20th century becomes smaller and smaller in the rearview mirror of history, the old-fashioned and backward thinking, which flourished in that period, is quickly and thankfully being replaced. Consumers are shedding the literal poison of alcohol and embracing the physical, mental, and emotional benefits of plant medicines like cannabis. As the coming years and decades pass, the ravages of alcohol will be appropriately seen for what they were and are – destructive, devastating, and, above all else, replaceable.