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Report Overview: Cannabis Testing Services MarketThe global cannabis testing services market size was valued at USD 1.1 billion in 2020 and looks set to grow at a compound annual growth rate (CAGR) of 14.3% from 2021 to 2027. The leading factor attributing to market growth is the growing need for cannabis testing services due to a rise in contamination cases. The cannabis plant in its cultivation phase gets exposed to various contaminants, which mainly include heavy metals from the soil, fungus, molds, and pesticides. These contaminants are unfit for human consumption and can harm consumers by causing severe fatalities and respiratory diseases. Many regulatory agencies have started establishing maximum quantity limits on residual solvents, insecticides, pesticides, heavy metals, microbes, and mycotoxins for testing plant samples. It further resulted in the establishment of many new laboratories, particularly in regions where cultivation is booming. Moreover, the growing legalization of medical cannabis across various countries is also a critical factor influencing the growth of the market for cannabis testing services. For instance, in 2018 Farm Bill was introduced for legalizing hemp cultivation in the U.S. Following the trend, many countries Europe and Asia are set to legalize medical cannabis for the increasing patient population. The number is expected to increase exponentially over the forecast period 2021-2027. Owing to this increase in number, the need to set up effective testing services has become a necessity for assuring the quality of cultivated cannabis. Most of the countries have stringent rules and regulations on medical cannabis usage and cannabinoid content. These countries require various types of test results for assuring quality. The boost in the cannabis market has spontaneously created a substantial demand for independent laboratories. However, each country has its unique testing laws. Furthermore, the testing needs and equipment required by each laboratory may differ. Moreover, the countries with stricter norms may require added equipment with more enhanced features and high precision. Thus, it proves to be a significant hurdle for the growing testing services market. Moreover, the high cost associated at the initial level is to inhibit market growth over the forecast period. The laboratory equipment needed for undergoing various contamination tests are expensive and can be a major obstacle for small and mid-sized laboratories trying to enter the market for cannabis testing services. Also, the market is very niche and is currently facing a dearth of trained laboratory professionals. As people are not well equipped and lack the necessary expertise with cannabis examination.
Service Type Insights: Cannabis Testing Services MarketBased on services type, potency testing services lead the market with a revenue share of 21.7% in 2019. Increasing usage of effective potency testing techniques such as Gas Chromatography (GC) and High-Performance Liquid Chromatography (HPLC) for testing samples and increasing demand for examining the potency of various cannabinoids particularly CBD (Cannabidiol) and Tetrahydrocannabinol (THC) in cultivated cannabis are the key factors driving the market. Moreover, this segment is anticipated to be the fastest-growing during the forecast period. Increasing quality checks for cannabinoids to ensure accurate labeling of products in medical and recreational markets and their increasing exports to countries, where the market is highly regulated are the key factors expected to drive the market for cannabis testing services. Furthermore, potency testing service keeps consumers well informed about the quality of the product, which is further supporting the growth of this segment in the cannabis testing services market over the forecast period.
End-User Insights: Cannabis Testing Services MarketBased on end-user, cannabis cultivators/growers lead the market with revenue share of 62.4% in 2019. Cultivators are signing up agreements with testing laboratories and research centers, as governments in many countries have imposed restrictions on the THC content present in cannabis products. Moreover, these growers need to sell different varieties of plants based on their CBD and THC content to manufacturers and wholesalers at different prices. These are the dominant factors supporting the growth of the segment. On the other hand, the cannabis drug manufacturers segment is estimated to be the fastest-growing over the forecast period. The growing acceptance of marijuana as a medicine and rise in the number of cannabis-based clinical trials by the big pharma giants such as Sanofi, Solvay Pharmaceuticals, and Pfizer are the key factors driving segment growth. For instance, as of June 2018, Sanofi registered 38 clinical trials, Solvay Pharmaceuticals registered 7, and Pfizer registered 4 cannabis-based clinical trials.
Regional Insights: Cannabis Testing Services MarketNorth America lead the market with a revenue share of 89.0% in 2019 and is anticipated to grow at a significant rate over the forecast period. An increase in the number of testing laboratories in the region owing to rigorous guidelines set by the government for marijuana cultivators and the presence of a large number of cultivators in the region are the key factors supporting the market growth in this region. On the other hand, Europe is anticipated to be the fastest-growing region over the forecast period. Key factors anticipated to drive the market for cannabis testing services are increasing the legalization of cannabis in major European countries and increasing usage of the plant in drug development and research. Furthermore, the market for cannabis products is strictly regulated in the region, as most of the countries have banned products containing more than 0.3% THC. Thus, it is anticipated to drive market growth over the forecast period.
Key Companies & Market Share Insights: Cannabis Testing Services MarketThese companies are focused on increasing their geographical presence and acquiring major certifications to add value to their services. For instance, in September 2016, Green Leaf Lab received ORELAP accreditation. Then, in March 2020, the company’s unit in Oregon became the first testing company to be accredited with ISO/IEC 17025:2017. Moreover, in December 2019, Eurofins Scientific entered into a partnership with Medicinal Genomics Corp. (MGC) - a U.S. based bioanalytical testing company - for introducing next-generation Single Nucleotide Polymorphism (SNP) chip. It will be useful for advanced cannabis genotyping, breeding, and pathogen testing. Such initiatives by the key participants are fueling market competition. Some of the prominent players in the cannabis testing services market include:
Key companies Profiled: Cannabis Testing Services Market Report
This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2016 to 2027. For the purpose of this study, GVR has segmented the global cannabis testing services market report on the basis of service type, end user, and region:
- Saskatchewan Research Council (SRC)
- SC Labs
- Steep Hill, Inc.
- SGS Canada Inc.
- CW ANALYTICAL
- GreenLeaf Lab
Service Type Outlook (Revenue, USD Million, 2016 - 2027)
- Potency Testing
- Terpene Profiling
- Heavy Metal Testing
- Pesticide Screening
- Microscopy Testing
- Residual Solvent Screening
End-User Outlook (Revenue, USD Million, 2016 - 2027)
- Cannabis Drug Manufacturers
- Cannabis Cultivators/Growers
- Others (Research Institutes & Labs)
Table of Contents Chapter 1 Methodology and Scope 1.1 Market Segmentation 1.2 Research Methodology 1.2.1 Information Procurement 1.3 Information or Data Analysis 1.4 Market Formulation & Validation 1.4.1 Region Market: CAGR Calculation 1.5 Region Based Segment Share Calculation 1.6 List Of Secondary Sources 1.7 List Of AbbreviationsChapter 2 Executive Summary 2.1 Market Snapshot, | read more...