Canadian Beer Industry Pushes for Higher Pot Taxes to Stifle Competition
Canadians pay much more for alcohol than Americans, and the country's beer industry is now concerned that the impending recreational cannabis market will continue to cut into its profits.
Published on May 17, 2018

When it comes to smoking weed, the grass is a little greener in Canada. Not only is the Great White North working to completely legalize cannabis this summer, the overall cost of pot is significantly cheaper north of the border. According to a recent analysis by Wikileaf, Canadians pay about 30% less for weed than their American neighbors, with an eighth of legal bud going for about $40 in the States, and $27.90 in Canada.

Medical cannabis has been legal in Canada since 2001, and the country's medical canna-businesses do not face the same restrictions that their American counterparts do. "Part of the reason cannabis is so much cheaper in Canada than the United States is there is a much longer history of legalization in Canada, and thus a larger supply of legal marijuana growers and sellers," Christian Parroco wrote for Wikileaf. "While cannabis companies in the United States can't even have bank accounts, in Canada there are publicly traded cannabis companies on the stock market. In anticipation of nationwide legalization this year, the supply of marijuana continues to grow."

Not everyone is psyched about the prospect of cheap, legally available weed, though. Canadians currently pay much more for beer than Americans due to higher alcohol taxes, and the country's beer industry is now concerned that the impending recreational cannabis market will become a serious source of competition. This week, trade groups representing Canada's beer industry began urging politicians to hike up marijuana taxes in order to keep their products competitive.

Luke Harford, president of Beer Canada, a leading trade group for the country's beer industry, spoke to the Canadian Standing Committee on Finance to address his group's concerns about legal weed. "The potential for legal marijuana to cannibalize beer is much more significant compared to the U.S. because of our higher beer taxes and high prices," Harford said, according to Marijuana Business Daily.

"Domestic brewers are concerned that legal recreational marijuana is going to have a negative impact on beer sales, which on a per-capita basis have already declined by 10% in the last 10 years," he continued. "The implication is clear. Low cannabis taxes will increase cannabis sales, while high beer taxes will decrease beer sales."

Alcohol industry leaders throughout North America, concerned that drinkers may switch to recreational pot instead, are now hustling to take a piece of the recreational cannabis industry for themselves. Late last year, Constellation Brands, U.S. distributor of Corona, Modelo, and Svedka vodka, purchased 10% of Canopy Growth Corp., Canada's largest publicly-traded medical cannabis company. And this week, Ben Kovler, heir to the Jim Beam enterprise, announced that he is planning to list his cannabis company, Green Thumb Industries, on the Canadian stock market.

Chris Moore
Chris Moore is a New York-based writer who has written for Mass Appeal while also mixing records and producing electronic music.
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