Cannabis Testing Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Market Overview

The cannabis testing market was valued at USD 950.9 million in 2020, and it is expected to reach USD 1,801.51 million by 2026, registering a CAGR of 11.29% during the forecast period, 2021-2026.

The impact of COVID-19 on this industry is still being studied. On one hand, due to the shutdown of non-essential labs and testing facilities across the world in response to COVID-19 induced lockdowns, sales of cannabis testing equipment and services were a bit low. However, there has been positive news too. In April 2020, two Israel-based companies, Eybna and CannaSoul, collaborated to work on a patented cannabis terpene formulation for treating COVID-19. The companies are examining the efficacy of the cannabis terpene formulation NT-VRL, which is being used to treat a diverse range of inflammatory conditions, including the cytokine storm syndrome caused by COVID-19. Collaborations and increased research in this segment are likely to create demand for cannabis testing services to isolate novel compounds.

The major factor attributing to the growth of the market is the increasing approval for the use of medical cannabis. The legal usage of cannabis for medical purposes is steadily growing but varies across countries based on the possession, distribution, cultivation, and medical indications for its consumption. In addition, there is an increasing volume of research supporting the use of marijuana for medical purposes, while some studies demonstrated it to be a potential means of fighting the opioid epidemic. Government bodies of several countries across North America, Europe, and South America have legalized the use of medicinal marijuana completely or for limited usage in certain forms on a strict basis. Globally, there are about 40 countries that allow the legal use of marijuana that is distributed through prescription or limited use in ayurvedic medicines. The use of hemp-based products has seen favorable legislation since the passage of the United States Farm Bill in 2018. The bill allowed the broad-based cultivation of hemp while restricting it to pilot programs for studying market interest in hemp-derived products. The bill explicitly allowed the transfer of hemp-derived products across state lines for commercial or other purposes. Additionally, it puts no restrictions on the sale, transport, or possession of hemp-derived products, so long as those items are produced in a manner consistent with the law. In February 2021, lawmakers in the United States stated that they were planning new legislation that would end the federal prohibition on marijuana, which has been legalized to some degree by many states. These initiatives are likely to impact the demand for cannabis testing equipment in a positive manner. As cannabis-based products find increased legislation and come under the ambit of law, the demand for testing equipment is expected to increase during the study period.

Cannabis extracts are also used to treat many neurological and mental disorders. As the incidence of these disorders increases, along with the increase in use and production of cannabis, the cannabis testing market is also expected to grow during the forecast period. According to the World Health Organization, as of 2019, approximately 450 million people suffer from such conditions, placing mental disorders among the leading causes of ill-health and disability globally. Depression is the most common mental disorder. Globally, more than 264 million people of all ages suffer from depression. More women are affected by depression than men. Furthermore, growing awareness and adoption of software services in labs testing cannabis are other factors boosting the market. However, the high cost involved in cannabis testing instruments is a major drawback of the market growth.

Scope of the Report

As per the scope of the report, cannabis is proven to be effective in various medical applications, such as reducing nausea caused due to chemotherapy, stimulating appetite in AIDS patients, controlling muscular spasms in multiple sclerosis patients, etc. Cannabis testing refers to the analytical examination of cannabis to ensure its safety before human consumption. The cannabis testing market is segmented by product and software/service (analytical instruments, spectroscopy instruments, consumables, and cannabis testing software and services), type (potency testing, terpene profiling, residual solvent screening, heavy metal testing, mycotoxin testing, and other types), end user (laboratories, cannabis drug manufacturers and dispensaries, and other end users), and geography (North America, Europe, Asia-Pacific, Middle-East and Africa, and South America). The report offers the value (in USD million) for the above segments.

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Key Market Trends

The Analytical Instruments Segment is Dominating the Market

The COVID-19 impact on analytical instruments has been positive. In general, due to the COVID-19 pandemic, there has been an increase in demand for analytical instruments as the production of equipment has increased significantly. Additionally, since cannabis extracts are being used for medical research, there has been sustained demand for these equipment even during the pandemic. Finally, many regions in the United States tagged cannabis dispensaries with the title of 'essential business'. Thus, these developments are expected to positively affect the market development.

Cannabis extracts need to be tested for heavy metals, potency, pesticides, terpene profile, residual solvents, moisture, microbial and fungal growth, and mycotoxins/aflatoxin. Testing makes sure that the products are safe, while concurrently generating revenues and a return on investment. Instruments like HPLC, gas chromatography, and liquid chromatography are used extensively. A study was conducted by researchers at the Suez Canal University in Egypt between 2015 and 2018, and the results were published in January 2019. The researchers studied some of the most widely used cannabis analytical techniques. These techniques ranged from liquid chromatography (LC) to gas chromatography (GC) and others.

Chromatography techniques are used extensively for contaminant reduction. They can be cost-effective while efficiently removing contaminants like fungicides, pesticides, herbicides, synergists, and heavy metals from cannabis and hemp extracts. Chromatography can also be used for reducing THC content in cannabis extracts. They are used to separate cannabinoids like CBD, THC, CBN, CBG, etc., from cannabis extracts. Many companies like Sorbent Technologies Inc. offer exclusive chromatography-based testing and extraction products. The company manufactures dedicated chromatographic products like Adsorbents, TLC Plates, Flash Cartridges, Flash Chromatographic Systems, FPLC Columns, HPLC Columns, GC Columns, Gel Filtration, SPE Cartridges, and Syringe Filters. Many other companies like Aurum Labs, WATERS, and CannaSafe Inc., among others, offer diversified products too. The presence of major companies is expected to boost the market growth as it leads to greater product availability.

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