CANNABIS TESTING MARKET ANALYSIS

Cannabis Testing Market Size and Trends

Global cannabis testing market is estimated to be valued at USD 2.45 Bn in 2024 and is expected to reach USD 7.23 Bn by 2031, exhibiting a compound annual growth rate (CAGR) of 16.7% from 2024 to 2031. Cannabis testing is done to check potency, mold, yeast, pesticides, residual solvents and heavy metals in cannabis products.

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Global cannabis testing market is expected to witness significant growth over the forecast period due to factors such as legalization of medical and recreational marijuana in various countries, increasing product availability in dispensaries and cross-border trade. However, lack of regulations surrounding recreational cannabis use can hamper the market growth.

Rising Acceptance of Medical Cannabis

The rising acceptance of medical cannabis across various countries is a major factor driving the growth of the global cannabis testing market. As more jurisdictions legalize medical marijuana and pass stricter regulations governing its production and sale, the need for comprehensive safety and quality testing of cannabis products has increased dramatically.Many governments and medical organizations now acknowledge the potential therapeutic benefits of certain cannabinoids like CBD and THC for patients suffering from chronic conditions such as cancer, epilepsy, chronic pain, arthritis and mental health issues. As a result, more people are turning to cannabis-based medicines to improve their quality of life. This growing patient base is exerting pressure on lawmakers to establish regulated systems for cultivating, manufacturing and dispensing safe medical cannabis. Countries like Germany, Italy, Thailand, South Korea and Mexico that had historically banned marijuana are now pursuing a medical cannabis program. For instance, according to the German Federal Institute for Drugs and Medical Devices report in 2021, about 70,000 people were prescribed medical cannabis in Germany that year, up from around 1,000 patients in 2017.The heightened requirement of testing cannabis for various chemical constituents, contaminants, pesticides and microbiological safety prior to use is spurring the need for advanced analytical equipment, consumables and software solutions in the industry. Cannabis testing labs are investing in sophisticated instruments like chromatography–mass spectrometry (GC-MS and LC-MS), fourier transform infrared spectroscopy (FTIR) and potency testing equipment to identify target analytes. Cannabis testing companies also need consumable items like testing kits, cartridges, columns and standards/reagents on a regular basis to conduct various tests as mandated by regulations. 

Market Concentration and Competitive Landscape

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Technological advancements in testing equipment

Technological advancements in the equipment can drive the global cannabis testing market growth. New testing equipment allows for more accurate and efficient product quality screening. High-throughput devices can now simultaneously test multiple cannabis samples for contaminants, potency, and cannabinoid profiles much faster than before. This is important since the legal cannabis industry has compliance and safety standards to ensure product purity for consumers. As legalization expands to more states and countries, the need for testing will also increase to validate cannabis quality at scale. Sophisticated testing tools provide deeper compound analysis beyond just THC and CBD levels. Spectrometry and chromatography instruments can detect minute trace elements and isolate uncommon cannabinoids that may have future medical applications. Identification of low-level terpenes and other compounds provides operators valuable consumer insight into the most desirable product profiles. The advancement of testing technologies will continue diversifying the cannabis testing marketplace with customized goods tailored to demand. According to Health Canada, by 2023, improving technology can lead to 40% reduction in average testing costs, making compliance more affordable for producers. Lower costs will particularly benefit small growers and early-stage markets. As barriers to commercial entry decrease with innovations, total testing activity and the addressing market can expand rapidly. According to the data from United Nations Office on Drugs and Crime, medical cannabis adoption will rise globally due to growing validate of its therapeutic benefits being identified through sophisticated lab screening. With continued technology evolution and expanding international acceptance, the long-term potential for the cannabis testing industry appears very promising.

Key Takeaways from Analyst:

The legalization of cannabis for medical and recreational use in several countries can drive the cannabis testing market growth. As number of countries and states legalizing marijuana increases, there will be rise in need for safety and quality testing of cannabis products. Many regulatory bodies now mandate stringent safety and potency testing of cannabis and cannabis-derived products prior to sale,  and this can drive the cannabis testing market growth.

 The lack of funding and resources can hamper the growth of smaller testing labs globally. Establishing testing facilities requires huge capital investments, which may restrain the entry of new players. The absence of set standards across different regions and countries leads to inconsistencies, affecting the delivery of quality services.

 North America, especially the U.S., currently dominates the cannabis testing market, owing to rising number of states legalizing medical and recreational marijuana. However, countries in Europe and Latin America can offer high growth opportunities due to changing regulatory landscape. The cannabis testing market in Asia Pacific is still in the nascent stage but is likely to emerge as the fastest growing market over the next few years, especially in countries like Australia, China, and South Korea where the medical use of cannabis is increasing.

Market Challenges: Lack of funding and investments for testing labs

The lack of funding and investments for cannabis testing labs can hamper the growth of global cannabis testing market. With limited financial resources, testing labs find it challenging to procure advanced analytical instruments and hire highly skilled scientists and technicians who can conduct meticulous quality testing. This affects their testing capacity and turnaround time for delivering test results. With a faster growth in the number of cannabis cultivators and product manufacturers compared to the increase in testing lab infrastructure, the existing labs are overburdened with the quantity of samples to be tested. This has led to longer wait periods for businesses to obtain necessary certificates of analysis before commercializing their products. The deficiency of funds also restricts testing labs from extensively researching and validating new testing methodologies. Currently, there are no internationally harmonized testing and quality standards for cannabis. Each country and region have established their own guidelines. However, with limited R&D spending power, labs are unable to swiftly adapt their testing protocols as per the evolving regulatory frameworks. This hinders cross-border trade opportunities for the industry players. Furthermore, insufficiency of investments deprives the testing facilities from upgrading their IT infrastructure to integrate with the digital systems of other ancillary businesses like cultivators, manufacturers and dispensaries.

Market Opportunities: Emergence of new testing methods

The emergence of new testing methods can offer growth opportunity for global cannabis testing market. Advanced analytical techniques are being developed and refined that allow for more comprehensive product quality screening than ever before. High-performance liquid chromatography (HPLC) and gas chromatography-mass spectrometry (GC-MS) have become standard practices for assessing cannabis samples for potency and contaminants. New methods like isotope ratio mass spectrometry (IRMS) enable origin determination by revealing the unique chemical fingerprint of a sample's place of cultivation. This type of traceability certification is proving increasingly important to legal market regulators and consumers alike. Beyond identifying location, isotopic tests may also help differentiate conventional from organic cultivation methods. Such credentialing capabilities empower consumer choice and build confidence in product safety. As the legal cannabis industry expands globally, testing standards are tightening in lockstep. The World Health Organization published guidelines recommending stringent pre-market quality control for both medical and recreational-use cannabis products. Adherence to protocols will require sophisticated testing solutions. Startups are answering the call by introducing novel screening devices. For example, handheld analyzers using hyperspectral imaging can scan multiple samples per minute for microbial and residual solvent contaminants without the need for offsite labs. Compact devices expand testing access in emerging markets where centralized lab infrastructure has not yet developed. These also enable real-time quality checks farther down the supply chain.

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By Service Type- Testing For Safety and Efficacy

In terms of service type, potency testing segment is estimated to contribute the highest market share of 25% in 2024, owing to strict regulations. As the legal cannabis market expand worldwide, ensuring product safety and consistency becomes crucial. Potency testing determines the amount or concentration of THC, CBD, and other cannabinoids in a sample. Precise potency measurements are essential for compliance with legal limits and for manufacturers to develop accurate dosage formulations. Testing also protects consumers by screening out contaminated products as any impurities could negatively impact the user experience or pose health risks. Since the industry lacks established standards, potency testing provides data for clinical research on appropriate amounts. As regulations tighten, there will be huge demand for analyzing cannabinoid profiles through this testing.

By Product Type - Rising Complexity of Product Formulations

In terms of product type, analytical instruments segment is estimated to contribute the highest market share of 45% in 2024, due to rising complexity of product formulations. Cannabis products are diversifying beyond dried flower into innovative delivery methods like edibles, topicals, and concentrates. Developing these value-added items requires measuring multiple components across various matrices. Analytical instruments like chromatography systems and spectroscopy equipment are able to detect cannabinoids along with accompanying additives, ingredients and residuals. These offer the selectivity and precision needed to test novel product formulations as businesses expand into new categories. This analytical capability allow for consistent manufacturing of advanced goods. As cannabinoid research continues and formulating techniques progress, testing technologies must scale in tandem to ensure these varied next-generation offerings meet quality requirements.

By End User- Regulatory Requirements for Manufacturers

In terms of end user, cannabis drug manufacturers segment is estimated to contribute the highest market share of 51% in 2024, owing to stringent regulatory requirements. As legal cannabis programs adopt medical and recreational frameworks, certified testing is mandated throughout the supply chain. Manufacturers face rigorous guidelines by health agencies when developing and producing cannabis-based medicines, edibles, extracts and other consumer goods. Failing product tests can lead to costly waste disposal, damage to brand reputation, and in severe cases regulatory non-compliance penalties. To avoid such outcomes and protect their market access, manufacturers partner extensively with testing laboratories to perform batch analyses, audits, and certifications. Comprehensive testing verifies good production practices while validating the safety and contents of labels. It smoothens new product approvals and regulates interstate commerce activities. With regulations expected to tighten further, outsourcing testing needs to specialized labs will remain fundamental for manufacturers to conduct business seamlessly.

Regional Insights

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North America dominates the global cannabis testing market with an estimated market share of 40.3% in 2024, primarily due to legalization of both medical and recreational marijuana in major markets like the U.S. and Canada. Countries in this region have made significant investments in building a strong testing infrastructure to ensure product safety and quality.

The U.S. is the largest country market in North America due to increasing commercial cultivation and use of cannabis in states that have legalized it. While federal laws still prohibit marijuana, growing number of states permitting medical and recreational use continues can drive the need for compliance testing. Strict regulations require testing for dozens of parameters including potency, pesticides and heavy metals. This has created a booming testing industry to handle the large volumes and provide data needed for compliance and labeling purposes.

Latin America  is witnessing the fastest growth in the cannabis testing market, led predominantly by Brazil and Mexico. While medical cannabis is still illegal in Brazil, the government has shown positive signs of reforming laws and may legalize it in the future. This has local testing companies proactively enhancing their service portfolio to capture potential opportunities. Mexican Supreme Court's recent ruling has allowed recreational use, putting the nation on track to become a major hub in the recreational industry across Central and South America. Existing hemp producers are diversifying into other cannabis segments like CBD, presenting huge requirement for analytical testing capabilities in the region.

Market Report Scope

Cannabis Testing Industry News

• In January 2024, Smithers relocated its Cannabis Testing Services division to a new, state-of-the-art laboratory in Darien, Illinois, U.S. This move, situated outside of Chicago, reflects Smithers' commitment to the cannabis industry by improving client proximity, optimizing sampling routes, and investing in advanced technology.
• In December 2022, SC Labs expanded into Southern California with a new 12,000+ square foot lab in Van Nuys, Los Angeles. The facility will provide both R&D and compliance testing for cannabis, including potency, pesticides, heavy metals, residual solvents, microbials, water activity, and more. This expansion aims to enhance testing capacity and resources for customers south of Santa Barbara.
• In August 2022, ACS Laboratory, a U.S.-based cannabis testing company, introduced its own national hemp compliance testing panel. This panel is designed to test hemp samples for a comprehensive range of substances, including 18 cannabinoids, 105 pesticides, 24 heavy metals, 55 potential residual solvents, 17 different microorganisms, and all required mycotoxins, with detection capabilities down to parts per billion. It also assesses moisture content, water activity, and terpenes.
• In July 2022, Green Scientific Labs launched new technology for cannabis testing. This innovation includes custom-designed software specifically developed for the cannabis industry.
• In March 2021, PerkinElmer introduced the industry's first Certified Reference Material (CRM) reagent and consumable kit, designed to streamline cannabis pesticide testing workflows. These products facilitate more efficient analysis of cannabis products using testing instruments.

*Definition: Global Cannabis Testing Market involves the testing of cannabis and cannabis-derived products for various quality parameters like potency, pesticides, residual solvents, bacteria and other contaminants. This market includes testing for both medical and recreational cannabis to ensure product safety and compliance with regulations. The testing helps produce high quality and consistent cannabis and cannabis products while protecting consumer health. Various testing methods are used like chromatography testing, potency testing and terpene profiling. The market is evolving with the legalization of medical and recreational cannabis in many countries.

Market Segmentation

•  Service Type Insights (Revenue, USD Bn, 2019 - 2031)
  • Potency Testing
  • Residual Solvent Testing
  • Mycotoxin Testing
  • Microbial Testing
  • Genetic Testing
  • Heavy Metal Testing
  • Pesticide Screening
  • Others
•  Product Type Insights (Revenue, USD Bn, 2019 - 2031)
  • Analytical Instruments
    • Chromatography
    • Spectroscopy
  • Consumables Testing Software & Services
  • Breathe Analyzer
•  End User Insights (Revenue, USD Bn, 2019 - 2031)
  • Cannabis Drug Manufacturers
  • Cannabis Cultivators/Growers
  • Research Institutes & Labs
  • Others
• 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
  • Anresco
  • SC Labs, Inc
  • CW Analytical Laboratories
  • Digipath, Inc
  • EVIO, Inc
  • Eurofins Scientific
  • Pure Analytics LLC
  • Green Scientific Labs
  • Steep Hills, Inc
  • PharmLabs
  • Agilent Technologies Inc.
  • Shimadzu Scientific Instruments
  • Restek Corporation
  • PerkinElmer Inc.
  • Danaher Corporation
  • Accelerated Technology Laboratories Inc.
  • Steep Hill Halent Laboratories Inc.
  • Digipath Inc.
  • Sartorius AG