The global cannabis testing market size is estimated to reach USD 3633 million by 2030, growing at a CAGR of 11.92%, from USD 1289 million in 2021.
Cannabis testing is the process of analyzing a single sample of cannabis to determine THC, CBD, and terpene levels, as well as contaminants and impurities like residual solvents, mold, disease, pests, and pesticide residue. Each state and municipality has the authority to establish its own standards and regulations for what must be tested and printed on cannabis labels. Individual growers may also choose to adhere to more stringent standards, even having their samples tested for CBC and CBG levels.
Only certified chemists and lab technicians are permitted to conduct this testing. Cannabis cultivation and sales were previously prohibited around the world for several years. Many countries are now recognizing the medicinal benefits of cannabis and lifting their bans. The growing demand for cannabis legalization for medical purposes in several countries, as well as the increasing adoption of LIMS in cannabis testing laboratories, are driving the cannabis testing market forward. Furthermore, many leading pharmaceutical companies are expected to boost market growth by looking for new technologies to collaborate with testing laboratories to market and distribute medical cannabis products.
The high startup costs for cannabis testing laboratories, on the other hand, are expected to limit the market's growth. These laboratories must invest significantly in high-priced, advanced analytical equipment to purchase and maintain it. Emerging economies in developing regions such as LATAM and Asia-Pacific, on the other hand, are expected to provide new opportunities for market participants in the future.
Legalizing cannabis for medical purposes will open up new growth opportunities for testing laboratories, resulting in a significant expansion of the cannabis testing industry over the forecast period. Medical cannabis has shown to be effective in a variety of medical applications, including reducing chemotherapy-induced nausea, stimulating appetite in AIDS patients, controlling muscular spasms in multiple sclerosis patients, and lowering intraocular pressure in glaucoma patients.
Various governments, including Australia (2016), Canada (2015), South Korea (2018), North Korea, Spain, Portugal (2001), the United Kingdom (2006), Germany (2017), Italy, the Netherlands, Israel, and Brazil, have all legalized medical cannabis in recent years due to its health benefits.
Furthermore, medical cannabis is being legalized in a number of countries/states around the world, as the demand for cannabis analytical testing to ensure its safety before human consumption has increased in recent years. Furthermore, due to increased legalization and adoption of cannabis testing, the number of cannabis testing labs is expected to grow at a significant CAGR in the coming years.
Laboratory Information Management System (LIMS) is a well-established tool for controlling, managing, organizing, documenting, analyzing, and reporting information in QC laboratories and is thus a natural complement for ISO 17025 compliance. The Laboratory Information Management Systems (LIMS) assists laboratories in managing all aspects of cannabis testing, including potency, microbial contaminants, heavy metals, aflatoxin, residual solvents, and pesticides, as well as self-service secure web reporting.
LIMS can also support quality control testing, laboratory workflows, reviews, approvals, audits, standard operating procedures, customer relationship management, limit checking, stability studies, and complete product traceability from grower to dispensary. So, LIMS can make cannabis testing labs more efficient and cut down on mistakes by automating workflows, making SOPs mandatory, and putting in place strong process controls, which is driving the market forward.
Laboratories must invest a significant amount of money in acquiring and maintaining high-priced, advanced analytical equipment. Standardization and upgrades of equipment, software requirements, accreditations, certifications (such as ISO certification protocols), and the need for skilled professionals all add to the operating costs. The impact of these factors is amplified by the fact that many banks refuse to provide funding or other forms of assistance to these laboratories due to ambiguity in the cannabis testing industry, and laboratory owners/operators do not have access to lines of credit.
Furthermore, several municipalities are putting together a schedule for taxing cannabis testing labs. As a result, for small/startup cannabis testing laboratories, running profitable operations after significant investments is a major challenge. Analytical instruments with advanced features and functionalities, such as chromatography, spectroscopy, and PCR systems, are also more expensive, which in turn makes the costs incurred in the setup rise. With all these factors, the costs associated with cannabis testing labs rise, which proves to be a major setback for the market.
The cannabis testing market share is expected to grow rapidly in emerging economies such as Latin America and some APAC countries. In comparison to other regions, this is primarily due to strong government support for medical marijuana legalization in these countries. This is attracting a number of investors, prominent players, and government bodies to invest in developing cannabis testing laboratory standards or improving their operations and activity.
For example, MediPharm Labs Corp (Canada and the United States) signed a supply agreement with XLR8 BRAZIL, a Rio de Janeiro-based value-added distributor serving Brazil, Latin America's largest medical cannabis market, to supply premium, GMP-certified formulated cannabis oil. The cannabis testing industry will have lucrative growth opportunities in the coming years due to a lack of providers and suppliers in such emerging markets.
The global cannabis testing market share is segmented by test type and by end-user.
Under test type segmentation is further classified into Heavy Metal Testing, Microbial Analysis, and Potency Testing, out of which the Potency testing has a major market value.
Soils and fertilizers can have many different kinds of metals in them. As cannabis plants grow, they tend to pull these metals out of the soil and take them in. Heavy metals are a group of metals that are thought to be dangerous. Lead, cadmium, arsenic, and mercury are some of the most common heavy metals. Most labs are required to test and confirm that samples do not have more of these four dangerous metals than is allowed.
Microbiological analysis is the study of how to find, identify, or count microorganisms using biological, biochemical, or chemical methods. Analysis of microorganisms in cannabis has become standard and is now required in most legal markets.
The only things that seem to stay the same are how quickly rules change and how few people agree on how to do things. Also, depending on the type of product and who will be using it, microbial testing is a must. But it is a real worry that testing requirements are just put on all types of matrices, no matter what they will be used for or who will buy them.
Cannabinoid profiles, which are also called "potency," are an important part of testing cannabis. Cannabinoids are made naturally by cannabis plants, and they determine the overall effect and strength of the cultivar, also called the strain. There are different kinds of cannabinoids that work in different ways as medicines.
Traditional high-performance liquid chromatography (HPLC), which has become the gold standard for analyzing cannabinoid profiles, is the best way to test for potency. A rise in the number of new products for testing potency is also expected to help the market grow. The market is also being driven by the fact that more people are using CBD to treat diseases, which is why the said segment is dominating the market with a CAGR of 13.6% over the forecasted period.
The global cannabis testing market, when segmented on the basis of end-users, it is divided into Cannabis Cultivators and Cannabis Drug Manufacturers, where the Cannabis Drug Manufacturers owe the major market share.
Because cannabis is becoming legal in more and more places around the world and more scientific studies are being done on its medical and other benefits, it is becoming clear to everyone that hemp and cannabis testing is an important part of the market. In addition to these benefits, testing is becoming so popular that the American Society for Testing and Materials (ASTM) International is making safety and quality standards for the industry.
Growers can also learn more about how their strains grow by testing. This helps them pick the best time to harvest before too much tetrahydrocannabinol tips the scales (THC). By testing their plants for THC or CBD levels, growers can get a better idea of how much their crop is worth and change their business plans accordingly, which will help the market grow even more.
Big pharma companies like GW Pharmaceuticals Ltd., Sanofi, Solvay Pharmaceuticals, and Pfizer are running more cannabis-based clinical trials. This is one of the main things driving the segment's growth.
As of June 2018, for example, GW Pharmaceuticals Ltd. had registered 40 clinical trials, Sanofi had registered 38, Solvay Pharmaceuticals had registered 7, and Pfizer had registered four clinical trials that used cannabis. So, the growth of the market is helped by the fact that more cannabis drugs are being made around the world, which is why it is estimated to grow at a CAGR of 12.7% over the forecasted period.
The global cannabis testing market is primarily segmented into four regions, namely, North America, Europe, Asia-Pacific, and Latin America & Middle-East & Africa; out of these, the North American region dominates the global market.
The United States, Canada, and Mexico are all part of the North American cannabis testing market. North America was and will continue to bring in the most money for the cannabis testing market around the world. In North America, the U.S. has the biggest share. This is because there are more companies that make drugs from cannabis and more people who grow cannabis. The U.S. cannabis testing market share is also expected to grow over the next few years because more testing labs are opening and more research is being done on it, which is why it is said to grow at a CAGR of 11.3% over the forecast period.
After North America, Europe is the second biggest market for testing cannabis. Germany, the United Kingdom, France, and the rest of Europe bring in most of the money for this area. The market in the region is growing because of things like more cannabis-based clinical trials by big pharma companies in Europe, more money from the government, more attention on cannabis use, and more research to improve the quality of cannabis. Thus, the region is expected to earn a whopping USD 669 million by 2030 at a CAGR of 12.3%.
Asia-Pacific is the most lucrative region for cannabis testing after Latin America, the Middle East, and Africa. This is due to the rise in the adoption of LIMS, the legalization of cannabis for medical and recreational use, and the rise in domestic production, all of which contribute to the growth of the market.
As medical cannabis use becomes more accepted, this region is where market players can make the most money. Cannabis extract is used to treat a wide range of neurological and mental illnesses, and this is becoming more and more important as these illnesses become more common. So, more people using cannabis is likely to help the market grow even more.
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