Wednesday, December 11, 2019
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Canadians Smoking More Weed, Drinking Less Beer After Legalization

You likely aren’t surprised to hear that following adult-use legalization of marijuana in Canada, more of the country’s citizens are using cannabis than ever before. But an eye-opening survey from Cowen and Co. outlines how that increase in consumption has translated into losses for both the alcohol and legal cannabis industry.

According to Barron’s, the analysis from Cowen’s was sparked by big-time marijuana producers like Aurora Cannabis achieving disappointing sales despite a perceived increase of Canadians using weed. Cowen surveyed 1,800 Canadians and found 40% of those living in the Ontario and Alberta provinces reported using marijuana in the past month. In previous government surveys, fewer than 15% of Canadians had admitted to consuming cannabis in the past month.

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In addition, previous government surveys showed 60% of Canadians admitting smoking marijuana in their lifetime. Comparatively, Cowen’s poll had 75% of people saying they’ve tried cannabis at some time in their lives.

These numbers showcase the current predicaments of cannabis production and distribution in the country. “Canada’s illegal pot market must be bigger than expected,” Cowen concluded, and actually give the analysis firm optimism about the long-term future of the cannabis market in the country.

Consumers told Cowen their favorite methods of using cannabis included edibles and vapes, two products currently unavailable for Canadians to purchase. In addition, numerous reports have detailed barren shelves and lapses in distribution to consumers. Both these qualities explain why most Canadians would find it easier to continue buying from the black market than going legal. The increase in numbers, Cowen reports, could also stem from Canadians feeling more comfortable admitting their marijuana usage thanks to legalization.

“The growth is not entirely surprising,” Cowen analyst Vivien Azer wrote.

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Meanwhile Canadian beer sales fell by 6.8% in March 2019, the highest drop in more than two years in the country. Overall, Azer and her colleagues found that as marijuana usage rose, beer drinking fell.

“As we have asserted in the past, we believe that beer faces the biggest headwind from the transition to legal cannabis access,” wrote Cowen’s analysts. “We think this is troubling sign for beer,” they added, in reference to the drop in beer sales.

Mostly, Cowen remains bullish on the opportunities available for Aurora, as well as competitors like Canopy Growth, Tilray, and Cronos Group, especially once edible and vape sales begin this fall.

From total marijuana legalization in Canada, to North America becoming more chilled out about its own state laws, buying your favorite green flower has never been easier and growing your own is almost as simple. 

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