Fraser Hartley Shares Insights on Impact of Recreational Marijuana on Canadian Alcohol Market

Recently, the Senate passed the Cannabis Act (Bill C-45) which means that Canadians will be able to purchase and use cannabis for recreational purposes as of October 17th.

What effect will this development have on the alcohol and tobacco markets? Business Chief reached out to EKB Partner Fraser Hartley for his insights on the subject. Their article was also re-published by the European Centre for Monitoring Alcohol Marketing (EUCAM).

“Industry participants are of the view that legalisation will accelerate recreational adoption even further, with some predicting the recreational cannabis market will be comparable in size to markets for other recreational products such as wine and spirits by 2021,” Fraser observed. “It is likely that growth in the cannabis sector will come at some expense to the market for alcohol as millennials, in particular, have shown that they view marijuana as a substitute for alcohol in many circumstances.”

Business Chief pointed to a report from the Canadian Imperial Bank of Commerce (CIBC), which predicts that the legal recreational cannabis market could be as worth as much as $6.5bn by 2020. That would put the market for cannabis ahead of the current domestic market for alcoholic spirits, $5.1 billion in 2017. Although this is still substantially less than the $9.2 billion Canadians spent on beer this past year.

“Given the potential opportunity, it is no surprise that a flurry of activity has occurred as production, processing and distribution prepare to move from small-scale underground operations to commercial scale businesses,” Fraser noted.

EKB will be following these developments closely including the implications for business owners and employers. If you have questions about how legalized marijuana might impact your business, get in touch with the business lawyers at EKB.

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