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Could the beer market take a hit from legalized marijuana?

Michael Shulman
Liberal Leader Justin Trudeau offers up a beer to a patron as he pours pints at a pub Friday, September 4, 2015, in Toronto. (THE CANADIAN PRESS/Paul Chiasson)

Canada’s love affair with beer is well chronicled. A 2016 report found that for more than half of Canadians, it is the alcoholic beverage of choice, while only 27 per cent and 22 per cent said they prefer spirits or wine respectively.

Canadians also drink on average 60.3 litres of beer per a capita a year.

But could the county’s brewers take a hit after the federal government rolls out its legislation on legalized marijuana this summer?

Possibly, according to findings from south of the border.

A new study by the market research organization Cannabiz Consumer Group says that legal marijuana will swallow up 7.1 per cent of revenues from the U.S. beer industry.

“Unfortunately, there is no doubt that leakage will occur,” Rich Maturo, chief innovation officer at CCG, said in a press release.

“Those companies that are gathering insights on cannabis and have the foresight to see it as presenting an opportunity in addition to a risk will fare much better than those who strictly take a defensive position.”

The research, which polled more than 40,000 Americans last year, found that 27 per cent of beer drinkers have already substituted marijuana for beer, or would do so in the future if it was legal.

The recreational and medicinal use of the drug is allowed in eight states and there were 24.6 million legal consumers in 2016.

Meanwhile, the Canadian beer industry generated revenues of nearly $5 billion in 2012, and its sales totalled 2.3 billion litres the follow year, according to Statistics Canada.

But this number could be dwarfed by the recreational marijuana industry, which a 2016 report by Deloitte estimated could be worth as much as $22.6 billion.

And there’s further evidence to back up the CCG’s forecast. A report by investment research group Cowen and Company that came out last year linked marijuana consumption to a decline in beer sales in Oregon, Colorado and Washington, the latter of which two rolled out legalization in 2012 and the former followed suit in 2014.

The research also indicated that higher-income consumers and men have been drinking less alcohol over the last five years, while their use of weed increased.

A 2016 study also found similar findings among youth.

According to the report by Project Know, a website dedicated to helping people with alcohol and drug addiction, high school age students in the U.S. were more likely to have used marijuana than participated in binge drinking in the past 30 days.