Marijuana’s Next Billion-Dollar Market: Lab Testing

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MARIJUANA’S NEXT BILLION-DOLLAR MARKET: LAB TESTING

Fifty billion here, $10 billion there—estimates of the size and the growth of demand for cannabis, cannabis research and other marijuana-related ancillary products and services differ only in guessing at just how huge weed is going to be, everywhere, for everybody. (Amazing; this is just what investors want to hear!)

Now comes sweet music for the ears of anyone involved with a marijuana-testing lab: cannabis testing is poised to become a $1.4 billion market by itself, according to a new estimate.

Cannabis lab testing for potency, purity and detailed information such as terpene counts was worth $866 million in 2016. With rising demand for medical marijuana throughout the world, and legalized recreational cannabis available throughout more and more of North America, testing labs will be worth $1.4 billion by 2021—a year-over-year growth rate of more than 10 percent. Which is to say: pretty huge.

The estimate includes the cost of equipment and computer software used to test cannabis—expensive liquid and gas-chromatography machines—as well as the cost of hiring skilled and trained humans to run them and interpret the results. This is one area where growth may be inhibited; according to research analysts, there is a “dearth of skilled professionals” working in marijuana lab testing.

This is all according to an estimate from Markets and Markets, an India-based “global research firm” founded in 2001 that is also a veritable report factory. This estimate on the cannabis testing market is but one of 60,000 market reports the organization claims to publish in a calendar year. (Reading the full report will cost you several thousand dollars; this is all per the perfunctory introduction.)

It’s safe to say that there will be increasing demand for accurate and reliable marijuana testing and the subsequent clean cannabis, following a string of contamination scandals.

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