Canada’s Cannabis Boom Grows as Alcohol Consumption Declines

Canadians are spending billions of dollars on legal cannabis. Sales are growing, and profits are contributing to the national budget. At the same time, Canadians are drinking less and less alcohol. Canada’s fiscal year ends in March, so the latest data from the Canadian government are now available. See what the cannabis market looks like a few years after legalization.

The numbers are impressive. Canadians spent a staggering 5.5 billion Canadian dollars (CAD) on cannabis. This is over 6 percent more than the year before.

Profits are rising, but competition is driving down prices in Canada

Although profits are at record levels, the market in Canada is starting to slow. Previously, it was growing much faster. In 2023, growth reached almost 16 percent. In 2024, it was 11 percent.

Why the slowdown? The market is already saturated. This means there are many companies and shops. Shops are competing for customers. Therefore, they have to lower prices. The average retail price of cannabis has fallen by more than 1 percent in a year.

Who spends the most on cannabis?

The average Canadian adult spent $167 on cannabis in a year. However, the situation varies across the country.

Residents of the Yukon region in the north spend the most, averaging $384 per person.

They spend the least in Quebec. There, the average is only $105. Why so little? Quebec authorities have banned the sale of certain products. You won’t easily find THC gummies or vape pen cartridges there .

Extracts are catching up with hemp. What are customers buying?

The data clearly shows that classic cannabis (flower) remains the top choice. Consumers in Canada spent $3.29 billion on it. Flower accounts for nearly 60 percent of all sales.

But consumer attention is shifting to other products. The popularity of inhalable extracts is growing rapidly in Canada. These include:

vaporizer cartridges (vape pens),
hashish,
wax,
rosin (i.e. natural hot-pressed resin).

Sales of such extracts increased by almost 13 percent. Customers spent $1.7 billion on them.

Hemp beverages (up 9 percent) and oral extracts such as oils (up 7 percent) are also being purchased more frequently.

Interestingly, sales of edibles declined. Customers purchased 2 percent fewer cannabis-infused cookies and gummies.

Legalization is a plus. Billions in the state budget

Canada benefits greatly from legal cannabis. The federal and provincial governments collected $2.5 billion in taxes in one year. That’s an 11.5 percent increase.

What does this look like in practice? For every dollar a customer spends at a cannabis store, the government takes 45 cents in taxes.

Cannabis beats alcohol

Legal cannabis sales in Canada are on the rise. Meanwhile, alcohol sales are plummeting.

Alcohol sales in Canada will fall by 4.2 percent in 2024 and 2025. This is the largest such decline in over 20 years! Canadians are drinking less. The average has dropped from 8.7 to 8 standard drinks per person per week.

The data shows a clear trend. Young people and adults are more likely to forgo alcohol, choosing safe and legal cannabis products instead . December 2025 brought another record for cannabis dispensaries, with customers spending over $503 million in just one month.

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(Featured image by Kindel Media via Pexels)

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