Cannabis Testing Services Market Size, Share & Trends Analysis Report By Service (Potency Testing, Terpene Profiling, Heavy Metal Testing, Pesticide Screening, Microscopy Testing), By End-use, By Region, And Segment Forecasts, 2024 - 2030

Cannabis Testing Services Market Trends

The global cannabis testing services market size was estimated at USD 1.80 billion in 2023 and is projected to grow at a CAGR of 17.21% from 2024 to 2030. Factors such as increasing legalization of cannabis for recreational and medical purposes, rising use of cannabis in medicinal applications, the launch of technologically advanced instruments for cannabis testing, and growing focus on ensuring product quality and safety boost the market growth. For instance, in April 2024, Germany legalized cannabis for recreational purposes. Under this law, adults in Germany possess 25 grams of marijuana for recreational purposes.

Moreover, several states and countries are establishing standardized testing and certification programs, which are anticipated to propel the market growth. These programs are designed to assure quality & regulate product safety and are thus expected to further boost market growth. For instance, in January 2024, Minnesota State Community and Technical College (M State) collaborated with Green Flower, a cannabis education and training center, and provided three new certificate programs to students for careers in the cannabis industry. In addition, in April 2023, ACT Laboratories and SC Labs collaborated and launched Trust in Testing Certification, a new set of national standards for cannabis testing.

Furthermore, the growing legalization of cannabis across the globe for medical and recreational purposes fuels the market growth. By opening new markets and increasing consumer access, this trend directly impacts the growth trajectory positively. For instance, according to the National Conference of State Legislatures of April 2023, 38 U.S. states, the District of Columbia, and three territories have legalized cannabis for medical purposes. In addition, according to the same source, as of April 2023, 24 states, the District of Columbia, and two territories have legalized cannabis for recreational use.

Various countries across Asia and Europe are set to legalize medical cannabis for the growing patient population. This number is anticipated to rise significantly over the forecast period. Due to this increasing patient population, setting up effective testing services becomes essential. For instance, the following table represents the number of medical cannabis patients in the U.S.

Many countries operate under stringent policies governing the use of medical cannabis and the specifics of its cannabinoid composition. These nations mandate various types of test results to ensure the quality of the cannabis drugs. With the cannabis industry experiencing growth, there's been a noticeable increase in the need for third-party labs. However, various countries are starting to relax their regulations on medical cannabis. For instance, in December 2023, Japan's parliament passed a bill to legalize cannabis-based medicines, marking a significant change in the country's strict drug regulations. Such factors boost market growth.

In addition, the growing adoption of Laboratory Information Management Systems (LIMS) in cannabis testing fuels market growth. The LIMS assists laboratories in managing all aspects of cannabis testing, such as microbial contaminants, potency, aflatoxin, heavy metals, pesticides, and residual solvents. Furthermore, LIMS supports laboratory workflows, quality control testing, approvals, reviews, standard operating procedures, audits, limit checking, customer relationship management, complete product traceability, and stability studies from the grower to the dispensary. LIMS makes cannabis testing laboratories more efficient by automating workflows. Thus, such factors are expected to boost market growth over the forecast period.

Market Concentration & Characteristics

The cannabis testing services market is characterized by a high degree of innovation owing to the rising demand for cannabis medicine, growing cannabis legalization, increasing R&D activities on the use of cannabis and its medicinal properties, and growing awareness among people regarding the medicinal benefits of cannabis. For instance, in February 2024, in Canada, researchers at the University of British Columbia conducted a new clinical trial to investigate the use of cannabidiol in the treatment of bipolar depression.

The market is characterized by a medium level of merger and acquisition (M&A) activity. These mergers and acquisitions facilitate access to complementary technologies, improve operational efficiency, and capture a larger market share. For instance, in August 2023, Smithers, a testing, consulting, and compliance services provider, acquired Midway Lab LLC operations in Ohio. This represents Smithers' entry into the Ohio cannabis testing market.

Regulations play a crucial role in shaping the cannabis testing services market, ensuring the safety, efficacy, and quality of cannabis-based medicine available to patients. However, each country has its unique testing laws. Furthermore, the testing needs, and equipment required by each laboratory may differ. For instance, from January 2024, California state-licensed laboratories must use standardized cannabinoid operating procedures and test methods set by the Department of Cannabis Control (DCC) for testing dried flowers and non-infused pre-rolls.

Several market players are expanding their business by entering new geographical regions to strengthen their market position and expand their service portfolio. For instance, in April 2023, SC Labs, a U.S.-based cannabis and hemp testing company, expanded its cannabis testing services in Arizona by acquiring C4 Laboratories, based in Scottsdale.

Service Insights

The potency testing segment dominated the market in 2023 and accounted for the largest revenue share of 22.8%. The rising usage of effective potency testing techniques such as High-Performance Liquid Chromatography (HPLC) and Gas Chromatography (GC) for testing samples is expected to drive the market growth. The growing demand for analyzing the potency of various cannabinoids, such as Tetrahydrocannabinol (THC) and Cannabidiol (CBD), in cultivated cannabis is expected to further propel the segment growth.

Furthermore, the introduction of new cannabis testing services propels the market growth. For instance, in February 2021, the NSTDA Characterization and Testing Center (NCTC) introduced the Cannabis Analytical Testing Laboratory. They signed an agreement with Play La Ploen Herbal Center Community Enterprise, based in Buriram province, to conduct cannabis tests for the organization to certify that their offerings adhere to global standards.

The potency testing segment is expected to register the fastest CAGR over the forecast period. Potency testing is essential to determine the exact percent of cannabinoid content. Moreover, it allows accurate labelling of product contents. Cannabis producers are facing increased regulatory pressure for conducting potency testing for cannabis. Stringent regulatory requirements for the labeling and potency of products containing cannabis are positively impacting the market growth.

End-use Insights

The cannabis cultivators/growers segment dominated the market in 2023 with a revenue share of 61.6%. Cannabis is gaining traction, as many developed countries are legalizing the cultivation of cannabis after recognizing the levels of CBD present in it, which is leading to an increased demand for cannabis for various applications in several sectors, including pharmaceuticals, nutraceuticals, cosmetics, and food & beverage. Furthermore, cannabis growers are expanding their facilities to cater to growing demand, and the introduction of new cannabis cultivation facilities drives the market growth. For instance, in March 2024, Minnesota's first cannabis cultivating facility on sovereign land is under construction, just behind Grand Casino Mille Lacs in Onamia. The facility, which spans 50,000 square feet, is expected to yield around 1,600 pounds of cannabis monthly while offering job opportunities for Band of Ojibwe members.

The cannabis drug manufacturers segment in the cannabis testing services market is anticipated to register a fastest growth rate over the forecast period. Cannabis is used in the manufacturing of various medications for anxiety, pain, spasticity, and antiemetics. It relieves symptoms associated with cancer, Alzheimer’s disease, HIV, AIDS, Crohn’s disease, glaucoma, and epilepsy. Moreover, there is an increasing trend in providing personalized cannabis therapies for each patient, boosting the market growth. Thus, wide applications of medical cannabis have led to an increase in its adoption, which leads rise in the manufacturing of cannabis-based medicine that further fuels the segment growth.

Regional Insights

North America dominated the cannabis testing services market in 2023 and accounted for the largest revenue share of 60.7% The key factors supporting the market's growth in this region are a rise in the number of cannabis testing laboratories due to strict government guidelines for cannabis cultivators and the presence of a large number of cannabis cultivators.

U.S. Cannabis Testing Services Market Trends

The cannabis testing services market in the U.S. held the largest market share in 2023. The states in the U.S. have stringent cannabis testing requirements for potency and contaminants. The local authorities have listed the list of residual solvents, pesticides, and other contaminants to be tested in cannabis samples. Cannabis testing labs in the U.S. are offering innovative services such as mobile cannabis testing and rapid potency testing, among others, to gain a competitive advantage in the market. Some companies operating in the U.S. cannabis testing market are Green Leaf Lab, CannaSafe, and PharmLabs LLC.

Canada cannabis testing services market is anticipated to register the fastest growth rate during the forecast period. Canada is one of the leading producers of cannabis, owing to the legalization of cannabis for medical and recreational use and the development of many cannabis-based products such as oils & creams. In addition, the presence of major cannabis-producing or cultivating companies, such as Canopy Growth Corporation, Aurora Cannabis, & Aphria, and investments made by private companies and the government to support cannabis cultivation companies are some of the factors driving the market.

Europe Cannabis Testing Services Market Trends

The cannabis testing services market in Europe is anticipated to register a significant growth rate during the forecast period, owing to an increase in consumption, rising awareness & positive attitude toward cannabis and its products, and strategic investments by major companies in Europe; the market is expected to grow at a substantial rate during the forecast period.

The cannabis testing services market in Germany is dominated in 2023 in the European region. High demand for medical cannabis products, the recent legalization of cannabis for recreational purposes, and rising investments fuel the market growth in the country. For instance, in June 2024, Organigram Holdings invested USD 14.9 million in Sanity Group, a Berlin-based cannabis operator, to broaden its presence within the German market.

UK cannabis testing services market is anticipated to register the fastest growth rate during the forecast period. Factors such as favorable government initiatives, rising awareness regarding therapeutic uses of cannabis, and a growing number of cannabis consumers are expected to grow the market during the forecast period. Some companies operating in the UK cannabis testing market are PhytoVista Laboratories (BRITISH CANNABIS GROUP), BRITISH CANNABIS, and ADACT Medical Ltd.

Asia Pacific Cannabis Testing Services Market Trends

The Asia Pacific cannabis testing services market is expected to grow fastest over the forecast period. Possible legalization of the production and cultivation of cannabis and increasing the patient population eligible for medical marijuana treatments are expected to propel the market growth in the Asia Pacific. The countries in this region are considered emerging markets for cannabis and its derivatives. There is potential for growth in the region due to favorable climatic conditions and increasing awareness about cannabis & its medical benefits. Thus, such factors boost market growth.

China dominated the cannabis testing services market in 2023 in the Asia Pacific region. China is the largest cultivator of hemp in Asia and produces nearly half of the world's hemp. However, the number of cultivators and producers is expected to increase, which is likely to create demand for hemp and CBD extracts such as oil, edibles, and tinctures, thereby propelling the growth of the cannabis and hemp testing services market in the country.

The cannabis testing services market in Australia is anticipated to register a significant growth rate during the forecast period. The presence of major producers such as Cann Group, AusCann Group, and BOD Australia in the country is driving the market over the forecast period. Since its legalization, the country has attracted many foreign companies and entrepreneurs who want to produce medical cannabis in the country. This has, in turn increased demand for cannabis testing facilities in the country.

Latin America Cannabis Testing Services Market Trends

Latin America and Caribbean is witnessing a considerable growth in the cannabis testing services market Some countries, such as Chile, Argentina, Colombia, Peru, Mexico, and Brazil, have legalized the use of CBD for medical purposes. Furthermore, other countries in the region allow the home cultivation of cannabis for personal use, with certain restrictions. Mexico, Uruguay, Colombia, Brazil, and Chile allowed home-growing for recreational or medical purposes, within certain limits. Such factors boost the demand for cannabis testing services in this region.

Uruguay cannabis testing services market is anticipated to register a significant growth. Uruguay legalized the sale of medical and recreational cannabis in 2012 and became the first country in the world to legalize it. The government of Uruguay launched a medical marijuana program in 2017, which made registration with the government mandatory for purchasing or growing cannabis. Such factors led to the need for cannabis testing services in the country, propelling the market growth.

Africa Cannabis Testing Services Market Trends

The Africa region is experiencing lucrative growth in the cannabis testing services market. Cannabis regulations are quite stringent in Africa. Countries such as Uganda, Zimbabwe, Lesotho, Malawi, South Africa, Morocco, Rwanda, Ghana, Zambia, and Eswatini have legalized cannabis cultivation for scientific research & medicinal purposes. Such legalization in those countries is expected to boost the market growth over the forecast period.

Key Cannabis Testing Services Company Insights

Key participants in the cannabis testing services market are focusing on devising innovative business growth strategies in the form of product portfolio expansions, partnerships & collaborations, mergers & acquisitions, and business footprint expansions.

Recent Developments

• In January 2024, the Ontario Cannabis Store introduced a temporary THC testing program. Under the program, the provincial cannabis wholesaler has been choosing cultivars with high THC content to arrive at its warehouse for secondary testing.

• In October 2023, Nova Analytic Labs (Nova) and Certified Testing & Data (CTND) collaborated and launched a new cannabis testing lab in New York.

Cannabis Testing Services Market Report Scope

Global Cannabis Testing Services Market Report Segmentation

This report forecasts revenue growth at global, regional, and country level and provides an analysis on industry trends in each of the sub segments from 2018 to 2030. For the purpose of this study, Grand View Research, Inc. has segmented the global cannabis testing services market report based on services, end-use, and region:

• Services Outlook (Revenue USD Million, 2018 - 2030)

  • Potency Testing

  • Terpene Profiling

  • Heavy Metal Testing

  • Pesticide Screening

  • Microscopy Testing

  • Residual Solvent Screening

  • Others

• End-use Outlook (Revenue USD Million, 2018 - 2030)

  • Cannabis Cultivators/Growers

  • Cannabis Drug Manufacturers

  • Others (Research Institutes & Labs)

• Regional Outlook Revenue USD Million, 2018 - 2030)

  • North America

    • U.S.

    • Canada

  • Europe

    • Germany

    • UK

    • Italy

    • Poland

    • Czech Republic

    • Switzerland

    • Croatia

    • Netherlands

    • Spain

  • Asia Pacific

    • China

    • Japan

    • India

    • Thailand

    • Australia

    • New Zealand

  • Latin America and Caribbean

    • Brazil

    • Mexico

    • Uruguay

    • Colombia

  • Africa