Market Trends of Cannabis Lighting Industry
This section covers the major market trends shaping the Cannabis Lighting Market according to our research experts:
LED Light is Expected to Occupy Significant Share
- As per World Health Organization, indoor cultivation of cannabis under steady environmental conditions can generate three or four crops per year. Thus, to decrease the overall production cost, the cultivators are shifting towards LED lighting. It is due to its ability to reduce energy use during cultivation significantly.
- According to the World Health Organization, indoor cannabis production under regulated environmental conditions may produce three or four crops each year. As a result, cultivators are switching to LED lighting to lower total production costs associated with energy use. Its potential to minimize energy use significantly during cultivation is the reason behind this.
- According to a report published by the Resource Innovation Institute, LED lights to have the potential to save 40% on electricity relative to HID and other traditional lighting choices available for cannabis.
- Another benefit of LED bulbs is that these bulbs are required less maintenance. As LEDs are more efficient than HID, less wattage equals less heat into space, potentially lowering HVAC loads and operating expenditures for the cannabis cultivators.
- Furthermore, as more and more rural areas prepare to phase out traditional bulbs, LEDs continue to rise to the top of the market. For instance, according to the International Energy Agency (IEA), LEDs' penetration rate in the global lighting market increased between 2016 and 2019. It is expected to reach 76 percent by 2025, further driving the market growth.
- Seeing the benefits associated with LED bulbs and increasing shifts towards LED, cannabis lighting vendors are coming up with new products, which are further augmenting the market growth.
- For instance, in June 2021, Godox added three new LEDs and a power pack to its lighting lineup. Namely, the TL30 RGB LED Tube Light, the mono-light style SL100D Daylight LED Video Light, and SL100Bi Bi-Color LED Video Light. The TL30 RGB LED Tube Light is a small bi-color LED with a 180-degree beam spread that can produce up to 36,000 colors.
- Therefore, such benefits associated with LED lighting are expected to augment the market growth.
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North America to Dominate the Market
- In North America, there has been a considerable rise in the usage of cannabis for medical purposes. Research and product development have grown since the legalization of cannabis in countries like the United States and Canada. The FDA has recognized the benefits of cannabis and has made significant contributions to the industry's growth.
- Furthermore, with the increasing medicinal market in the region, North America is expected to be the largest consumer of cannabis, which will drive the cannabis lighting market in the area. According to Health Canada, there were 292,399 registered medicinal marijuana clients in Canada in March 2021. The provinces of Alberta and Ontario accounted for 55,928 and 157,620 clients, accounting for more than 71% of the total. In addition, New York and Illinois have legalized cannabis as an alternative to harmful opioids to assist in treating chronic pain since March 2019.
- In addition, in January 2022, Constellation made a USD 4 billion investment in Canadian cannabis producer Canopy Growth (CGC) at the height of the country's marijuana legalization; the continuous investment in cannabis will further drive the market growth.
- Furthermore, numerous Canadian beverage firms announced plans to offer cannabis beverages in the region, with each beverage containing no more than 10mg of THC per Health Canada standards. As a result of such an initiative, cannabis growth in the region may increase, producing new opportunities in the beverage sector and thereby driving the market.
- Also, the increasing legalization of cannabis in both Canada and the United States is another factor driving the cannabis need, which would increase the cultivation of cannabis which result will drive the cannabis lighting market in the region. Moreover, according to Health Canada, in January 2021, a total of 16,636,345 packaged units of cannabis were sold in Canada for medical and non-medical purposes. Cannabis extracts account for 17% of total sales in 2021, with 2,874,370 packaged units sold.
- The rising need for vertical farms and greenhouses due to the legalization of cannabis production is driving the demand for LED-based cannabis lights. Several considerations must be addressed when growing cannabis in a sunless medium. For example, the heat emitted by HPS lamps may harm the produce. As a result, LEDs, which operate at significantly lower temperatures, maybe a viable solution to the excessive heat generated. Companies that cultivate cannabis using vertical farming have seen considerable productivity gains.
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