Alcohol Sales Slide as Cannabis Brings in $2.5B for Canada

OTTAWA – Federal and provincial governments in Canada collected $2.5 billion from recreational Cannabis in the fiscal year 2025, marking an 11.5% increase from the prior year. This growth in Cannabis-related earnings contrasts with a 4.2% decline in alcohol revenues, which totaled $13.1 billion – the steepest annual drop since 2004.

Retail sales tell a similar story. Cannabis outlets recorded $5.5 billion in sales, up 6.1% or $300 million from the previous fiscal year, even as prices fell by 1.1%. On a per-person basis for those of legal age, this equates to about $167 spent on Cannabis, with regional variations ranging from $384 in Yukon to $105 in Quebec. Alcohol retail sales, meanwhile, slipped 1.6% to $25.8 billion, despite a 1.6% price hike, as volume fell 3% to 2,898 million liters – the fourth straight year of declines.

Beer remains the dominant alcohol category at $9.1 billion in sales, but its volume dropped 3.8%, continuing a nine-year slide. Canadians of drinking age bought the equivalent of eight standard drinks per week on average, down from 8.7 the year before. Analysts point to shifting consumer preferences, health awareness, and economic pressures as factors, though direct causation between Cannabis growth and alcohol’s fall requires further study.

While Cannabis market expansion has slowed from double-digit gains in earlier years, the data suggests sustained demand amid regulatory maturity. For the industry, this underscores opportunities in a sector still adjusting to legalization, but it also highlights broader consumption trends that merit close monitoring by policymakers and businesses.

Image courtesy of 365recreational.com