Cannabis Testing Market Is Estimated To Witness High Growth Owing To Legalization Of Cannabis

ashwinicmi

posted on 10 months ago — updated on 2 seconds ago

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The Cannabis Testing Market is estimated to be valued at US$ 1.72 Bn in 2023 and is expected to exhibit a CAGR of 22% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.

Cannabis Testing Market Is Estimated To Witness High Growth Owing To Legalization Of Cannabis

Market Overview:
Cannabis testing involves analyzing the composition and quality of cannabis and cannabis derived products. It is done to determine the content and potency of cannabinoids such as THC and CBD among others. Cannabis testing helps to ensure consumer safety and product quality by identifying harmful contaminants, pesticides and residual solvents in cannabis. It also determines terpenes and flavonoids profile to authenticate strains.

Market Key Trends:
Rising legalization of cannabis for both medical and recreational use across various regions is a major factor driving the growth of the global cannabis testing market. Increasing demand for analytical testing facilities and standardization of testing for cross-border trade is also propelling the market growth. Moreover, growing application of cannabis testing for ensuring public safety through fingerprinting and strain identification of cannabis plants and derivatives is expected to spur the cannabis testing market growth over the forecast period.

Porter’s Analysis

Threat of new entrants: The threat of new entrants is moderate as the market is regulated and testing requires specialized laboratory equipment and expertise. However, new technologies can lower entry barriers.

Bargaining power of buyers: Buyers have moderate bargaining power as there are many established testing labs in the market providing quality services at competitive prices. They can negotiate on price and service quality.

Bargaining power of suppliers: Cannabis testing labs have strong bargaining power over suppliers of lab equipment and materials as suppliers have few alternatives.

Threat of new substitutes: Threat from substitutes is low as testing is mandated by regulations leaving little scope for alternate testing methods.

Competitive rivalry: Intense as the market comprises many testing labs trying to gain market share through quality, pricing and new testing capabilities.

SWOT Analysis
Strength: Established labs have expertise, scale and reputation. Portfolio of analytical testing methods caters to diverse industry needs.

Weakness: Testing is subjected to regulatory changes imposing additional compliance costs. Retaining skilled technicians is challenging.

Opportunity: Growing cannabis market and legalization in more regions will boost testing demand. New product categories require tailored testing protocols.

Threats: Inconsistent regulations across regions and legal uncertainty impacts operations. Commoditization can squeeze profit margins.

Key Takeaways

The Global Cannabis Testing Market Demand is expected to witness high growth, exhibiting CAGR of 22% over the forecast period, due to increasing legalization of cannabis in various regions. The market size of cannabis testing is projected to reach US$ 3.09 Billion by 2030 from US$ 1.72 Billion in 2023.

Regional analysis - North America dominates the cannabis testing market currently due to commercial legalization in countries like the U.S. and Canada. The Asia Pacific region is expected to be the fastest growing market due to rising medical cannabis acceptance and programs in countries like Australia, Thailand and South Korea.

Key players operating in the Cannabis Testing Market are Abko Labs, ACT Laboratories, BelCosta Labs, CDX Analytics, Digipath, LGC, Medicinal Genomics, SGS, Steep Hill and Tentamus. These established players are focusing on new testing capabilities, regulatory compliance and global expansion to strengthen their market position.