Cannabis Testing Market

Cannabis Testing Market Size, Share & Trends

The global cannabis testing market in terms of revenue was estimated to be worth $1.8 billion in 2024 and is poised to reach $4.0 billion by 2029, growing at a CAGR of 17.2% from 2024 to 2029. The comprehensive research encompasses an exhaustive examination of industry trends, meticulous pricing analysis, patent scrutiny, insights derived from conferences and webinars, identification of key stakeholders, and a nuanced understanding of market purchasing dynamics.

The growth of this market due to increasing use of cannabis in medicinal applications and the increasing legalization of recreational and medical cannabis, and launch of technologically advanced instruments. However, investment risks due to regularization and lack of standardization are some of the factors likely to hamper the market growth.

Cannabis Testing Market Trends

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Global Cannabis testing Market Dynamics

Driver: Increasing legalization of medical and recreational cannabis

The progressive legalization of medical and recreational cannabis across various jurisdictions, both at the state and international levels, presents significant growth opportunities for the cannabis testing market. As more regions legalize cannabis use, the demand for testing services to ensure compliance with regulatory standards and consumer safety requirements increases. With an increasing number of states in the US legalizing medical and recreational cannabis, there is a surge in demand for testing services to verify product potency, purity, and safety. Additionally, a few countries have legalized medical cannabis, creating new markets for testing laboratories to provide regulatory-compliant testing solutions.

Restraint: Lack of standardization

The lack of standardization presents a significant challenge for the cannabis testing market. Inconsistent testing methodologies, varying quality standards, and regulatory fragmentation hinder the reliability, comparability, and credibility of testing results. Different testing laboratories may employ varying analytical techniques, such as HPLC, GC, or mass spectrometry, for cannabinoid potency testing. Variances in instrument calibration, sample extraction methods, and data processing algorithms can result in divergent potency measurements for the same cannabis sample. Additionally, conflicting federal and state cannabis regulations present obstacles to research in multiple ways. To address this challenge, the National Cannabis Laboratory Council (NCLC) identified the necessity of moving from state variable testing programs to a standardized testing framework. This harmonized scheme aimed to establish a consistent baseline for quality testing of cannabis products, facilitating interstate commerce as the industry shifts to risk-based testing protocols developed by cultivators and manufacturers. The NCLC's proposal advocated for a unified testing approach, leveraging data from participating laboratories and adhering to scientifically recognized standards.

Opportunity: Untapped markets in emerging economies

Emerging economies present untapped markets with substantial growth potential for the cannabis testing industry. As these countries undergo regulatory reforms and societal shifts regarding cannabis legalization and medical acceptance, new opportunities for testing services emerge. In Latin America, countries like Colombia and Uruguay are liberalizing cannabis laws, creating a burgeoning market for medical cannabis. As these nations develop their cannabis industries, there is a growing demand for testing facilities to ensure product quality, safety, and compliance with international standards. Similarly, in Asia, countries such as Thailand and South Korea are exploring medical cannabis legalization, driven by evolving attitudes toward its therapeutic potential. This shift opens up opportunities for testing laboratories to support the development and regulation of the nascent cannabis industry in the region.

Challenge: High setup costs

One significant challenge facing businesses in the cannabis testing market is the high setup costs associated with establishing and operating testing laboratories. Establishing a cannabis testing laboratory requires substantial upfront investment in infrastructure, equipment, personnel, and accreditation processes. Costs can run into millions of dollars, depending on the scale and scope of the laboratory. According to Agilent Technologies, operators of cannabis testing laboratories should be aware that setting up a cannabis testing laboratory requires around USD 2 million. A startup seeking to enter the cannabis testing market may need to invest in state-of-the-art analytical instrumentation (e.g., chromatography systems, mass spectrometers), laboratory facilities, safety equipment, quality assurance protocols, and personnel training. The capital expenditure for a fully equipped laboratory can be substantial, requiring careful financial planning and resource allocation.

Ecosystem Analysis Cannabis Testing Market

The product cannabis testing segment commanded of the cannabis testing industry share in 2023.

Based on product & software, the cannabis testing market is segmented into products (analytical instruments {spectroscopy instruments [atomic spectroscopy instruments & mass spectrometry instruments], chromatography instruments [gas chromatography, liquid chromatography, & other chromatography instruments] & other analytical instruments} and consumables {standards and CRMS, sample preparation products, chromatography columns, and other consumables) and software. The products segment accounted for the largest estimated share of the cannabis testing market in 2023. The high share of this segment is mainly attributed to the increasing legalization of cannabis contributing to a demand for cannabis testing which drives the demand for analytical testing instruments and consumables. Additionally, technological advancements instruments is further likely to drive segmental growth. For example, Orange Photonics, Inc. developed LightLab 3, a portable, purpose-built HPLC (high-performance liquid chromatogram) that lets non-technical users analyze the potency of samples.

The services end users segment is poised to exhibit substantial growth of the cannabis testing industry at a significant CAGR throughout the forecast period.

Based on end users, the cannabis testing market is classified into segmented into product & software end users (research institutes and cannabis testing laboratories {large-scale laboratories, medium-scale laboratories, and small-scale laboratories}) and service end users (cannabis cultivators/growers and cannabis drug manufacturers & dispensaries). In 2023, the service end users segment accounted for the highest share of the global cannabis testing market. The large share of this segment is due to the increasing technological advancements in cannabis testing equipments which boost the cannabis testing market by enhancing testing accuracy, speed, and efficiency.

Europe is estimated to exhibit highest CAGR during the forecast period of cannabis testing industry 2024-2029.

There are five main regional segmentations for the cannabis testing market—North America, Europe, the Asia Pacific, Latin America, and the Middle East & Africa. In 2023, In 2023, North America held dominant share in cannabis testing market. Presence of key market players, increasing use of cannabis for medicinal use are some of the factors uplifting the market growth in the region. Europe is anticipated to grow at significant CAGR during the forecast period of 2024-2029. Increased legalization for use of cannabis coupled with rise in number of cannabis testing labs in the region is likely to drive the growth of the cannabis testing market in the region.

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Source: Expert Interviews, Secondary Research, Whitepapers, Journals, Magazines, and MarketsandMarkets Analysis

Key players in the Market include Agilent Technologies, Inc. (US), Shimadzu Corporation (Japan), Thermo Fisher Scientific Inc. (US), Danaher Corporation (US), Waters Corporation (US), Restek Corporation (US), SGS SA (Switzerland), Merck KGaA (Germany), PerkinElmer, Inc. (US), Hamilton Company (US), Sigma Analytical Services (Canada), SC Labs (US), PharmLabs LLC (US), MCS, Inc.  (US),  ProVerde Laboratories (US) and Eurofins Scientific (Luxembourg)

Scope of the Cannabis Testing Industry

This report categorizes the cannabis testing market to forecast revenue and analyze trends in each of the following submarkets:

By Product & Software

• Products
• Analytical Instruments
  • Chromatography Instruments
    • Liquid Chromatography
    • Gas Chromatography
    • Other Chromatography Instruments
  • Spectroscopy Instruments
    • Mass Spectrometry Instruments
    • Atomic Spectroscopy Instruments
  • Other Analytical Instruments
• Consumables
  • Chromatography Columns
  • Standards And Crms
  • Sample Preparation Products
  • Other Consumables
• Cannabis Testing Software

By Service

• Potency Testing
• Terpene Profiling
• Residual Solvent Analysis
• Microbial Analysis
• Pesticide Screening
• Heavy Metal Testing
• Other Services

By End User

• Product & Software
  • Cannabis Testing Laboratories
    • Small-Scale Laboratories
    • Medium-Scale Laboratories
    • Large-Scale Laboratories
  • Research Institutes
• Services
  • Cannabis Drug Manufacturers & Dispensaries
  • Cannabis Cultivators/Growers

By Region

• North America
  • US
  • Canada
• Europe
  • Germany
  • France
  • UK
  • Italy
  • Rest of Europe
• Asia Pacific
  • Japan
  • China
  • India
  • Australia
  • Rest of Asia Pacific
• Latin America
  • Brazil
  • Mexico
  • Rest of Latin America
• Middle East & Africa

Recent Developments of Cannabis Testing Industry:

• In September 2023, Shimadzu Corporation launched the Brevis GC-2050 gas chromatograph used in various applications including cannabis testing.
• In April 2023, SC Labs, one of the leading cannabis testing company, acquired C4 Laboratories, one of the first Arizona cannabis labs, thus allowing it to be licensed and accredited in five states: California, Colorado, Michigan, Oregon, and Arizona.
• In June 2022, Shimadzu Corporation launched the AA-7800 series atomic absorption spectrophotometers. The AA-7800 series is used for quality control in the raw material, food, and for inspecting water quality and hazardous substances in soil thus presenting an advantage in heavy metal testing of cannabis.

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