CANNABIS TECHNOLOGY MARKET SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2024 - 2031)

Cannabis Technology Market Size and Trends

Global cannabis technology market is estimated to be valued at USD 4.10 Bn in 2024 and is expected to reach USD 20.01 Bn by 2031, exhibiting a compound annual growth rate (CAGR) of 25.5% from 2024 to 2031.

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The market is witnessing huge growth due to growing awareness regarding the health benefits of cannabis and relaxing regulations related to marijuana in numerous countries. Advent of innovative technological solutions for cannabis cultivation and processing can also drive the market growth. Automated cultivation and processing system are gaining popularity among cultivators and manufacturers with an aim to improve production efficiency. Advancements in AI and IoT can also drive the market growth. For example, AI and IoT based sensors are being used to carry out environment and soil monitoring for optimum cultivation.

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Insights By Technology Type- Advanced Farming Techniques Boosts Cultivation Technology’s Leadership

By technology type, cultivation technology segment dominates the market, with an estimated share of 28.1% in 2024, due to innovations that improve yields and quality. Precision hardware, software solutions, AI, and IoT allow for automated monitoring and real-time adjustments of growing conditions for plants, such as temperature and humidity.  Automated fertigation and advanced LED lighting enhance efficiency, benefiting both small-scale and industrial growers by optimizing plant health, maximizing harvests, and boosting returns on investment.

Insights By Distribution Channel - E-Commerce Empowers Online Cannabis Distribution

By distribution channel, online segment dominates the cannabis technology industry with an estimated market share of 52.12% in 2024, due to e-commerce growth and convenience for medical and recreational users. Despite regulatory challenges, licensed retailers use online platforms to offer lab-tested products, educational content, and direct-to-consumer delivery models, ensuring compliance and reducing costs. The COVID-19 pandemic accelerated this shift, making online shopping the preferred choice for convenience, accessibility, and 24/7 availability, shaping the cannabis technology Industry.

Insights By Component - Hardware Drives Technology Adoption in Control and Automation

By component, hardware segment dominates the cannabis technology Industry with an estimated market share of 53.12% in 2024, as it is crucial for cultivation, extraction, and processing. Precision tools like sensors, climate controls, and machinery ensure efficiency and automation in regulated environments. Cloud-based solutions support real-time monitoring, attracting large producers. Standardized platforms enable facility expansion, while ongoing innovation enhances production, quality, and energy efficiency, making hardware essential to the cannabis technology market growth.

Regional Insights

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Dominating Region- North America

North America dominates the cannabis technology industry with an estimated market share of 37.2% in 2024. The market growth is driven by supportive government policies. The legalization of medicinal and recreational cannabis in several U.S. states boosts demand for this technology. Leading companies are investing in technologies for cultivation, genetic testing, seed-to-sale tracking, and payment processing to capitalize on emerging business opportunities.

Fastest-Growing Region- Asia Pacific

Asia Pacific witness the fastest growth in cannabis technology industry due to legalization of medical marijuana and favorable like Australia's Narcotic Drugs Amendment Act. Increasing acceptance of cannabis for therapeutic use boosts sector expansion. North American companies are also expanding into Asia Pacific to tap into the growing cannabis technology market. Technology adoption has been rising among licensed producers to meet stringent compliance standards.

Cannabis Technology Industry Outlook for Key Countries

The U.S. Leading the Charge in Legalization

The U.S. cannabis technology industry thrives due to supportive policies such as partnerships and state-level legalization, thus driving significant investments in cultivation, processing, and compliance technology. For instance, on April 4, 2024, The Cannabist Company, a manufacturer and retailer of cannabis products in the U.S., announced its partnership with Flower by Edie Parker, to launch premium cannabis products in six new U.S. markets and new edibles in four additional states.

Canada Pioneering National Legalization

Canada’s cannabis technology sector can witness growth due to progressive regulations and support for innovation. With the Cannabis Act, on January 2024, Canada established a legal framework that encourages research, testing, and technology development in the cannabis sector. Health Canada’s regulatory updates, such as those facilitating research and testing, attract investments in tech-driven solutions for cultivation, processing, and retail. Canada's cannabis technology market leads the way globally, driving advancements in tracking, testing, and compliance systems.

Japan- Emerging Market with Regulatory Caution

Japan’s cannabis technology sector focuses on medical cannabis research within a highly regulated framework. Ongoing studies on cannabinoids’ therapeutic benefits drive advancements in extraction and testing technologies, particularly for medical applications. This cautious yet strategic approach is gradually opening the cannabis technology market to medical cannabis innovations.

China- Potential Growth Amidst Strict Regulations

China cannabis technology industry growth is primarily driven by its extensive hemp production for industrial applications. The country invests in advanced cultivation, processing, and fiber extraction technologies to produce textiles, bio-materials, and cosmetics. This focus on industrial hemp and its economic potential positions China as a leading player in the global cannabis technology landscape.

India- Expanding Interest in Medical Cannabis

India cannabis technology industry is emerging through increasing interest in hemp cultivation for industrial and medical purposes. With government approvals for hemp farming in some states like Uttarakhand, India is expanding research on cannabis for therapeutic uses, encouraging investment in cultivation and processing technologies. This regulatory support propels cannabis technology growth in India, particularly in agriculture and medicinal sectors.

Market Concentration and Competitive Landscape

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Top Strategies Followed by Global Cannabis Technology industry Players

• Established players in the global cannabis technology industry focus extensively on research and development to introduce innovative products. Companies like Canopy Growth and Aurora Cannabis invest over 10% of their annual revenues in R&D to develop higher quality, more effective cannabis products. These also form strategic partnerships with leading biotechnology and pharmaceutical companies. This allows them to leverage advanced research while strengthening their positions in pharmaceutical and medical applications of cannabis technology.
• Mid-sized companies in the cannabis technology market focus on delivering cost-effective solutions. These introduce affordable hardware and software products to target price-conscious consumers. For example, MediPharm Labs offer generic cannabis oils and extracts at competitive prices. These players also form collaborations with local manufacturers to improve production capabilities. This helps boost overall volumes and market shares.
• Small players in the cannabis technology market focus on niche segments, offering specialized products and services. They often target specific consumer needs, such as organic cultivation methods, custom extraction processes, or localized solutions.

Emerging Startups in the Global Cannabis Technology Market

• Many startups are pioneering innovative cannabis technologies. Anthropic develops AI-powered tools to enhance plant cultivation and oil production. Its neural networks analyze vast datasets to optimize growing environments and yields. Startups like Phylos Bioscience apply genomics to classify and track cannabis strains, ensuring product quality and consistency.
• Small, innovative companies focused on environmentally friendly practices are achieving success and contributing positively to the cannabis technology market. Kusch+Co launched compostable packaging and vape products made from renewable hemp cellulose, reducing waste and the environmental impact of the cannabis industry. Canopy Growth's CraftGrow program supports small farmers using eco-friendly regenerative farming methods.
• Startups address niche market needs through collaboration, supported by initiatives like the Canadian Cannabis Technology Incubator, which helps them commercialize innovations via funding and industry partnerships.

Cannabis Technology Industry News

• On August 7, 2024, Metrc, a provider of cannabis regulatory systems, launched Metrc Retail ID, a system that uses QR codes for item-level tracking, enhancing supply chain transparency and compliance in the cannabis technology industry. This innovation gives consumers real-time access to product details like origin, potency, and test results, addressing growing demands for transparency and boosting safety.
• In March 2023, Atlas Global Brands Inc., a cannabis company, signed an exclusive five-year licensing agreement with Snoop Dogg to launch its cannabis brands internationally. The partnership allows Atlas to produce, distribute, and promote Snoop’s cannabis products—including flowers, pre-rolls, concentrates, oils, edibles, and vaporizers—across Canada for recreational use and in Germany, Israel, and Australia for medical use.

Key Takeaways from Analyst

Global cannabis technology industry can witness growth over the next decade as more countries legalize medical and recreational marijuana use. North America currently dominates the market due to broad legalization in Canada and certain parts of the U.S. However, Europe and Latin America are expected to offer major growth opportunities as regulations liberalize in countries like Germany, Italy, Mexico and Colombia. Development of technologies that enhance cultivation techniques, help test potency and purity of products, and ensure compliance with regulations can drive the market growth. These range from automated hydroponic and aeroponic cultivation systems to seed-to-sale inventory tracking platforms. With tight profit margins, cannabis companies are turning to technologies that streamline production and cut costs. Although market growth is fueled by increasing legalization, the absence of consistent federal regulations in key markets like the U.S. and ambiguous tax policies remain significant challenges. However, this risk is mitigated by growing social acceptance and greater focus on the medical benefits of cannabis. Technology adoption may also be hampered by the reluctance of some legacy cannabis firms to embrace new ways of working.

Market Report Scope

Market Dynamics

Market Driver- Increasing legalization of cannabis for medical and recreational use

Growing legalization of cannabis worldwide creates significant opportunities for technology companies, boosting demand for technology in cultivation, testing, and inventory tracking. As regulations expand, the market for cannabis technology can witness growth, offering long-term business prospects. For instance, in June 2022, according to United Nations Office on Drugs and Crime (UNODC) World Drug Report 2022 World Drug Report, cannabis legalization has led to increased usage and health issues in some regions. It also reported rising cocaine production, meth seizures, and environmental damage, urging stronger global efforts in drug prevention and regulation.

Market Challenge- Regulatory challenges and varying legal status across different regions

Global cannabis technology market faces regulatory challenges due to varying cannabis laws across regions. While some parts of Canada and U.S. states have legalized cannabis, many countries maintain strict laws against its cultivation and sale. This inconsistency complicates the development of uniform solutions, increasing compliance costs for technology companies. Legal uncertainty also deters investors from funding cannabis tech startups, fearing potential illegal activities. Without international regulatory harmonization, the market growth potential and global reach will be significantly limited.

Market Opportunity- Expansion of research and development in cannabis-related technologies

Expansion of research and development in cannabis technologies offers significant growth opportunities. As cannabis legalization spreads, funding for research increases, focusing on advanced tools utilizing cannabis compounds. Investments are increasing in AI, IoT, and robotics for automated cultivation and standardized formulations. Strong R&D efforts are exploring cannabis extracts for medical and wellness applications, including non-psychotropic cannabinoids for chronic diseases.

Key Stakeholders of Market

What growth in cannabis technology industry mean for different stakeholders?

Cannabis technology market has multiple players with varied designations and offers multiple opportunities based on their scope of operations.

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Market Segmentation

• By Technology Type Insights (Revenue, USD Bn, 2019 - 2031)
• • Cultivation Technology
  • Extraction Technology
  • Processing Technology
  • Distribution Technology
  • Retail Technology
• By Distribution Channel Insights (Revenue, USD Bn, 2019 - 2031)
• • Online
  • Offline
• By Component Insights (Revenue, USD Bn, 2019 - 2031)
• • Hardware
  • Software
• By End User Insights (Revenue, USD Bn, 2019 - 2031)
• • Medical
  • Recreational
  • Industrial
• Regional Insights (Revenue, USD Bn, 2019 - 2031)
• • North America
    • U.S.
    • Canada
  • Latin America
    • Brazil
    • Argentina
    • Mexico
    • Rest of Latin America
  • Europe
    • Germany
    • U.K.
    • Spain
    • France
    • Italy
    • Russia
    • Rest of Europe
  • Asia Pacific
    • China
    • India
    • Japan
    • Australia
    • South Korea
    • ASEAN
    • Rest of Asia Pacific
  • Middle East
    • GCC Countries
    • Israel
    • Rest of Middle East
  • Africa
    • South Africa
    • North Africa
    • Central Africa
• Key Players Insights
• • Ardent Life, Inc.
  • Demetrix, Inc.
  • Courier Plus Inc. (Dutchie)
  • Casters Holdings LLC (Fyllo)
  • Green Thumb Industries
  • Jane Technologies, Inc.
  • Aurora Cannabis Inc.
  • Canopy Growth Corporation
  • Tilray Brands, Inc.
  • Organigram Holdings, Inc.
  • Curaleaf Holdings, Inc.
  • MedMen Enterprises Inc.
  • Cronos Group Inc.
  • Harvest Health & Recreation Inc.
  • Trulieve Cannabis Corp.
  • Aphria Inc.
  • VIVO Cannabis Inc.
  • Hexo Corp.
  • Terra Tech Corp.
  • Cannabis Science Inc.