Cannabis sales boost government earnings as alcohol revenue dips

Investing.com -- The federal and provincial governments in Canada saw a rise in their earnings from cannabis, even as their income from alcohol sales took a dip, according to a report by Statistics Canada. In the fiscal year ending March 31, 2024, the governments earned $15.7 billion, marking a 1.1% increase from the previous year. This sum includes revenue from the sale and control of alcohol, which amounted to $13.5 billion, a 0.5% decrease from the previous year, and recreational cannabis, which brought in $2.2 billion, a 12.6% increase.

Alcohol sales saw a historic drop in volume, with the total sales amounting to $26.2 billion, a 0.1% decrease from the fiscal year 2022/2023. This decline happened despite a 2.5% increase in alcohol prices from March 2023 to March 2024. The volume of alcohol sold also decreased, with a 3.8% drop to 2,988 million liters, the largest volume decline since Statistics Canada began tracking alcohol sales in 1949.

Domestic products accounted for more than half of alcohol sales in 2023/2024, with 59.0% of sales being domestic, a slight increase from 58.7% in the previous fiscal year. Beer and ciders and coolers were the products with the highest proportion of domestic sales.

Sales of beer, the top-selling beverage category, decreased by 4.5% in volume to 1,950 million liters, marking the eighth consecutive annual decline. The total value of beer sales also decreased, dropping 1.3% to $9.2 billion. Despite this, beer maintained its position as the top-selling beverage, accounting for 35.1% of total sales, a significant decrease from two decades ago when it accounted for almost half of all alcoholic beverage sales.

Wine sales also saw a decline, with a 4.8% decrease in volume and a 0.3% decrease in dollar value. Spirits sales dropped 0.5% to $6.9 billion, with whisky, vodka, and liqueurs being the top-selling spirits.

Sales of ciders and coolers, however, rose 6.9% to $2.3 billion, marking the only category of alcoholic beverages with increased sales in 2023/2024.

Sales of recreational cannabis increased 11.6%, reaching $5.2 billion. This growth occurred despite a 2.8% decrease in the price of recreational cannabis from March 2023 to March 2024. Inhaled extracts were the fastest-growing cannabis category, accounting for over two-thirds of the $0.5 billion overall increase in cannabis sales.

While dried cannabis remained the most popular type of cannabis in 2023/2024, it has been steadily losing market share to inhaled extracts. Over the three-year period from 2021/2022 to 2023/2024, the market share of dried cannabis decreased from 71.0% to 61.4%, while inhaled extracts increased from 18.1% to 29.3%.

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