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Новости/Аналитика

Cannabis captures part of beer market in Canada

12.12.2019

There is clearly a certain effect of legal sales of psychoactive hemp on the sale of low-alcohol drinks, given how sharp the decline in beer trading in Canada in 2019 was.

According to Canadian brewers, beer sales in Canada decreased by 3% in the first 11 months of 2019 compared to the same period in 2018. This figure clearly demonstrates that the legal psychoactive hemp used for recreational purposes has already “captured” part of the low-alcohol drinks market in Canada . The same data confirm the concerns of brewers in other countries , which indicate the negative impact of legal recreational hemp on sales of their products . In particular, the above trend in Canada reflects similar problems faced by AmericanBrewers working in the administrative units of the United States , where legal sales of recreational hemp are allowed . 

 

 Comparison of beer sales by month in Canada in 2018 and 2019.

According to the Beer Canada industry group , in November 2019, 19.57 million hectoliters (hl) of national as well as imported beer were sold in the country, compared with 20.18 million hl. implemented for the same period of 2018.

Both under the influence of the fear of cannibalization and the temptation of new sources of income , some alcohol companies took a number of steps in advance to establish a presence in the legal cannabis market .

The largest of these was Constellation Brands, a multi-billion dollar investment company in Canopy Growth in 2018.

Other cross-industry transactions include:

• Budweiser AB InBev partnership with Tilray ( Canada );

• Moosehead's partnership with Sproutly Canada ( Canada );

• Molson joint venture with Hexo ( Canada ).

In turn, according to representatives of cannabis companies in Canada , brewers see a competitive threat from firms specializing in the legal production and sale of psychoactive hemp. In their opinion, this is precisely the main reason why “alcohol giants participated in the purchase / investment in companies specializing in the legal production and sale of psychoactive hemp.

Commentary experts of the Association "Ukrainian industrial hemp"

The decline in beer sales by 3% in 2019 is much worse than the trends observed between 2014 and 2018, when sales of the above “foamy drink” decreased on average by 0.3% annually. In 2019, there was the largest decline in domestic beer consumption over the past six years, but this was only partially offset by a small increase in sales of imported low-alcohol drinks. There is clearly a certain effect of legal sales of psychoactive hemp on the sale of low-alcohol drinks, given how sharp the decline in beer trading in Canada in 2019 was. Anticipating this kind of situation , back in May 2018, a few months before the first legal sale of recreational hemp took place in Canada , the Beer Canada industry group asked the federal government to raise the previously proposed tax on the legal sale of psychoactive hemp to create the same conditions for the implementation of cannabisa and beer. 

Sales of legal recreational hemp in Canada started rather slowly in October 2018, however, the market became more active due to its saturation with a rather wide range of products positioned in different price categories , harmonization of stocks and an increase in the number of stores in key markets in all regions of the country. This led to the fact that from October 2018 to September 2019 in Canada , recreational hemp was legally sold in the amount of about $ 691 million (a little over 900 million Canadian dollars).

A number of obstacles stand in the way of beer companies trying to make money on drinks from legal psychoactive hemp, especially in matters related to regulatory barriers in the country . For example, beer producers cannot produce cannabis drinks if they do not build a separate enterprise for this or cooperate with someone who already has such production facilities . This current rule of law adds significant value to final investment projects and limits the synergy of hemp and beer companies. A significant number of companies specializing in legal work with psychoactive hemp and some brewers have yet to “launch” joint products on the market , despite the fact that such low - alcohol drinks are absolutely legal in Canada . In addition, the ban on branding and the current nomenclature of alcohol means that beer brands cannot use existing brands to gain their share in the hemp market .

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