Difference between revisions of "Template:Past, Present, and Future of Cannabis Laboratory Testing and Regulation in the United States/Future of cannabis regulation, testing, and market trends/Lab testing"

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===5.2 Lab testing===
===5.2 Lab testing===
Future-looking estimates on cannabis lab testing are more difficult to find. The primary numbers being floated around originate from a June 2015 market report published by GreenWave Advisors titled ''Marijuana lab testing: An in depth analysis of investing in one of the industry’s most attractive plays''. GreenWave suggested that if the U.S. were to quickly legalize cannabis at the federal level, lab testing revenues alone would be $553 million by 2020, $866 million including related activities such as data analysis and consulting.<ref name="DPAUnique16">{{cite web |url=http://digipath.com/wp-content/uploads/2016/11/DigiPath-Investor-Presentation-11.3.pdf |format=PDF |title=DigiPath, Inc.: A Unique Investment Vehicle in Laboratory Testing |publisher=DigiPath, Inc |pages=28 |date=November 2016 |accessdate=03 March 2017}}</ref><ref name="SBSignal15">{{cite web |url=https://signalbay.com/company-news/signal-bay-makes-strategic-acquisition-in-the-850m-cannabis-testing-market/ |title=Signal Bay Makes Strategic Acquisition in the $850M Cannabis Testing Market |publisher=Signal Bay, Inc |date=24 September 2015 |accessdate=03 March 2017}}</ref><ref name="GWMari15">{{cite web |url=https://www.greenwaveadvisors.com/research/marijuana-lab-testing-an-in-depth-analysis-of-investing-in-one-of-the-industrys-most-attractive-plays/ |title=Marijuana lab testing: An in depth analysis of investing in one of the industry’s most attractive plays |publisher=GreeenWave Advisors, LLC |date=June 2015 |accessdate=03 March 2017}}</ref> Another forward-looking statement by Research and Markets in March 2017 suggested the cannabis testing market across the globe could be valued at $1.4 billion by 2021, affected positively by legalization of medical cannabis, laboratory growth, and information technology adoption, negatively by analytical instruments' high costs and a "dearth of skilled professionals."<ref name="RMCannabis17">{{cite web |url=https://www.prnewswire.com/news-releases/cannabis-testing-market-to-reach-14-billion-by-2021---driven-by-growing-number-of-cannabis-testing-laboratories---research-and-markets-300432416.html |title=Cannabis Testing Market to Reach $1.4 Billion by 2021 - Driven by Growing Number of Cannabis Testing Laboratories - Research and Markets |publisher=Research and Markets |work=PR Newswire |date=31 March 2017 |accessdate=16 November 2018}}</ref> A more conservative number was offered by Coherent Market Insights in July 2018, suggesting a global market at $1.5 billion by 2026<ref name="CMICannabis18">{{cite web |url=https://www.coherentmarketinsights.com/press-release/cannabis-testing-market-estimated-to-be-worth-us-15-billion-by-2026-64 |title=Cannabis Testing Market Estimated to be Worth US$ 1.5 Billion by 2026 |publisher=Coherent Market Insights |date=09 July 2018 |accessdate=16 November 2018}}</ref>, with Global Market Insights suggesting in July 2019 a number closer to $2.0 billion.<ref name="GMICanna19">{{cite web |url=https://www.gminsights.com/industry-analysis/cannabis-testing-market |title=Cannabis Testing Market Size By Technology (Chromatography {Liquid Chromatography, Gas Chromatography}, Spectroscopy {Mass Spectrometry, Atomic Spectroscopy}), By Test Type (Potency Testing, Pesticide Screening, Residual Solvent Screening, Heavy Metal Testing, Terpene Testing, Mycotoxin Testing), By Service Provider (Laboratories, Manufacturers, Research Institutes), Industry Analysis Report, Regional Outlook, Application Potential, Competitive Market Share & Forecast, 2019 – 2025 |publisher=Global Market Insights |date=July 2019 |accessdate=25 February 2020}}</ref>
A January 2021 report by Global Market Insights (GMI) found the U.S. cannabis testing market to be valued at about $2 billion in 2020, with a compound annual growth rate (CAGR) of 10.4 percent through 2027.<ref name="GMIUS21">{{cite web |url=https://www.gminsights.com/industry-analysis/us-cannabis-testing-market |title=U.S. Cannabis Testing Market |publisher=Global Market Insights, Inc |date=January 2021 |accessdate=09 August 2022}}</ref> At a global level, GMI's October 2021 report found the total market value to be somewhere around $3 billion in 2020, with a CAGR of 21.1 percent through 2027, affected positively by medical application growth, growth in research institution investment, and cultivator and laboratory growth, negatively by a lack of uniform regulations and testing standards.<ref name="GMICann21">{{cite web |url=https://www.gminsights.com/industry-analysis/cannabis-testing-market |title=Cannabis Testing Market |publisher=Global Market Insights, Inc |date=October 2021 |accessdate=09 August 2022}}</ref> A more conservative number was offered by Coherent Market Insights in July 2022, indicating a global market valued at $1.66 billion in 2022, potentially growing to $4.5 billion by 2030.<ref name="CMICannabis22">{{cite web |url=https://www.coherentmarketinsights.com/market-insight/cannabis-testing-services-market-2976 |title=Cannabis Testing Services Market Analysis |publisher=Coherent Market Insights |date=July 2022 |accessdate=09 August 2022}}</ref>


As for advances in cannabis lab testing, Kuzdzal ''et al.'' of Shimadzu envision a future where improvements in standardization, quality control, and research will shift what is tested and how it's tested<ref name="KuzdzalACloser16">{{cite web |url=http://event.lvl3.on24.com/event/13/38/14/4/rt/1/documents/resourceList1484589923854/emerging_cannabis_industry_whitepaper.pdf |archiveurl=http://web.archive.org/web/20170210234439/http://event.lvl3.on24.com/event/13/38/14/4/rt/1/documents/resourceList1484589923854/emerging_cannabis_industry_whitepaper.pdf |format=PDF |title=A Closer Look at Cannabis Testing |author=Kuzdzal, S.; Clifford, R.; Winkler, P.; Bankert, W. |publisher=Shimadzu Corporation |date=December 2016 |archivedate=19 January 2017 |accessdate=19 January 2017}}</ref>:
As for advances in cannabis lab testing, Kuzdzal ''et al.'' of Shimadzu envision a future where improvements in standardization, quality control, and research will shift what is tested and how it's tested<ref name="KuzdzalACloser16">{{cite web |url=https://www.ssi.shimadzu.com/sites/ssi.shimadzu.com/files/Industry/Literature/Shimadzu_Whitepaper_Emerging_Cannabis_Industry.pdf |archiveurl=https://web.archive.org/web/20181207195155/https://www.ssi.shimadzu.com/sites/ssi.shimadzu.com/files/Industry/Literature/Shimadzu_Whitepaper_Emerging_Cannabis_Industry.pdf |format=PDF |title=A Closer Look at Cannabis Testing |author=Kuzdzal, S.; Clifford, R.; Winkler, P.; Bankert, W. |publisher=Shimadzu Corporation |date=December 2017 |archivedate=07 December 2018 |accessdate=09 August 2022}}</ref>:


<blockquote>The cannabis industry and cannabis testing are in their infancies. As the need for better [[Laboratory quality control|quality control]] continues and standardization is introduced, it is likely that lower limits for the various cannabis contaminants will be established and regulations will be introduced. [[Mass spectrometry]] will likely play a greater role in quantitation as detection levels are lowered and confirmatory tests are required. The health benefits of terpenes present in cannabis will also provide a fertile area of scientific research. [[CBD]], [[CBG]] and other compounds appear to have a synergistic relationship with each other as well as with various THC forms and terpenes. This field needs much more investigation to determine mechanisms of action, bioavailability and health benefits.</blockquote>
<blockquote>The cannabis industry and cannabis testing are in their infancies. As the need for better [[Laboratory quality control|quality control]] continues and standardization is introduced, it is likely that lower limits for the various cannabis contaminants will be established and regulations will be introduced. [[Mass spectrometry]] will likely play a greater role in quantitation as detection levels are lowered and confirmatory tests are required. The health benefits of terpenes present in cannabis will also provide a fertile area of scientific research. [[CBD]], [[CBG]] and other compounds appear to have a synergistic relationship with each other as well as with various THC forms and terpenes. This field needs much more investigation to determine mechanisms of action, bioavailability and health benefits.</blockquote>


Lab testing of cannabis should continue to provide more exact and useful results as methods and standards continue to evolve. Disparity of results between two labs for the same sample are continuing to narrow as states increasingly add testing requirements to their cannabis legislature.<ref name="NelsonHas16">{{cite web |url=http://www.cannabisbusinesstimes.com/article/has-lab-testing-turned-a-corner/ |title=Has Lab Testing Turned A Corner? |author=Nelson, S. |work=Cannabis Business Times |publisher=GIE Media, Inc |date=03 August 2016 |accessdate=03 March 2017}}</ref> Those testing requirements are increasingly based off a growing body of recommendations, guidance, and standards developed by the likes of the Americans for Safe Access Foundation (ASAF), American Herbal Pharmacopoeia (AHP), American Herbal Products Association (AHPA), Association of Official Agricultural Chemists (AOAC), American Oil Chemists' Society (AOCS), and the Association of Public Health Laboratories.<ref name="InfocastNew16">{{cite web |url=http://infocastinc.com/industries/new-certification-program-brings-quality-assurance-to-the-medical-marijuana-industry/ |title=New Certification Program Brings Quality Assurance to the Medical Marijuana Industry |publisher=Information Forecast, Inc |date=2016 |accessdate=02 February 2017}}</ref><ref name="AHPARecomm16">{{cite web |url=http://www.ahpa.org/Portals/0/pdfs/AHPA_Recommendations_for_Regulators_Cannabis_Operations.pdf |format=PDF |title=Recommendations for Regulators – Cannabis Operations |author=Cannabis Committee, AHPA |publisher=American Herbal Products Association |date=02 February 2016}}</ref><ref name="AHPCanna14">{{cite book |url=http://www.herbal-ahp.org/order_online.htm |title=''Cannabis Inflorescence'': ''Cannabis'' spp. |publisher=American Herbal Pharmacopoeia |editor=Upton, R.; Craker, L.; ElSohly, M. et al. |year=2014 |isbn=1929425333}}</ref><ref name="AHPCanna14">{{cite book |url=http://www.herbal-ahp.org/order_online.htm |title=''Cannabis Inflorescence'': ''Cannabis'' spp. |publisher=American Herbal Pharmacopoeia |editor=Upton, R.; Craker, L.; ElSohly, M. et al. |year=2014 |isbn=1929425333}}</ref><ref name="MarcuJahan16">{{cite web |url=https://www.projectcbd.org/article/jahan-marcu-cannabis-lab-testing-safety-protocols |title=Jahan Marcu: Cannabis Lab Testing & Safety Protocols |work=Project CBD |author=Project CBD; Marcu, J. |publisher=Project CBD |date=16 March 2016 |accessdate=03 February 2017}}</ref><ref name="EricksonCleaning17">{{cite web |url=https://cen.acs.org/articles/95/i45/Cleaning-cannabis.html |title=Cleaning up cannabis |author=Erickson, B.E. |work=Chemical & Engineering News |publisher=American Chemical Society |date=13 November 2017 |accessdate=15 November 2018}}</ref><ref name="CassidayTheHighs16">{{cite web |url=https://www.aocs.org/stay-informed/read-inform/featured-articles/the-highs-and-lows-of-cannabis-testing-october-2016 |title=The Highs and Lows of Cannabis Testing |author=Cassiday, L. |work=INFORM |publisher=American Oil Chemists' Society |date=October 2016 |accessdate=03 February 2017}}</ref><ref name="APHLGuide16">{{cite web |url=https://www.aphl.org/aboutAPHL/publications/Documents/EH-Guide-State-Med-Cannabis-052016.pdf |format=PDF |title=Guidance for State Medical Cannabis Testing Programs |author=Association of Public Health Laboratories |pages=35 |date=May 2016 |accessdate=01 February 2017}}</ref> Already, the groundwork for standard methods is being created by the AOAC and ASTM International, which continue to work on standardizing the determination and quantitation of cannabinoid concentrations, residual solvents, and pesticide amounts.<ref name="AOACNew19">{{cite web |url=https://www.aoac.org/news/aoac-cannabinoid-standard-in-usda-guidelines/ |title=New guidelines require laboratories to meet AOAC Standard Method Performance Requirements for Quantitation of Cannabinoids in Hemp |author=Association of Official Agricultural Chemists |work=AOAC News |date=12 November 2019 |accessdate=25 February 2020}}</ref><ref name="ASTMSubD37.03">{{cite web |url=https://www.astm.org/COMMIT/SUBCOMMIT/D3703.htm |title=Subcommittee D37.03 on Laboratory |publisher=ASTM International |accessdate=25 February 2020}}</ref> Proficiency tests such as the Emerald Test<ref name="EmeraldTest">{{cite web |url=https://pt.emeraldscientific.com/|title=The Emerald Test |publisher=Emerald Scientific, LLC |accessdate=25 February 2020}}</ref>, which allows multiple labs to test an anonymous sample and compare results, should also continue to drive improved performance from cannabis testing labs.<ref name="NelsonHas16" />
Lab testing of cannabis should continue to provide more exact and useful results as methods and standards continue to evolve. Disparity of results between two labs for the same sample are continuing to narrow as states increasingly add testing requirements to their cannabis legislature.<ref name="NelsonHas16">{{cite web |url=https://www.cannabisbusinesstimes.com/article/has-lab-testing-turned-a-corner/ |title=Has Lab Testing Turned A Corner? |author=Nelson, S. |work=Cannabis Business Times |publisher=GIE Media, Inc |date=03 August 2016 |accessdate=09 August 2022}}</ref> Those testing requirements are increasingly based off a growing body of recommendations, guidance, and standards developed by the likes of the Americans for Safe Access Foundation (ASAF), American Herbal Pharmacopoeia (AHP), American Herbal Products Association (AHPA), Association of Official Agricultural Chemists (AOAC), American Oil Chemists' Society (AOCS), and the Association of Public Health Laboratories.<ref name="InfocastNew16">{{cite web |url=https://infocastinc.com/market-insights/new-certification-program-brings-quality-assurance-to-the-medical-marijuana-industry/ |title=New Certification Program Brings Quality Assurance to the Medical Marijuana Industry |publisher=Information Forecast, Inc |date=2016 |accessdate=09 August 2022}}</ref><ref name="AHPARecomm16">{{cite web |url=https://www.ahpa.org/Portals/0/pdfs/AHPA_Recommendations_for_Regulators_Cannabis_Operations.pdf |format=PDF |title=Recommendations for Regulators – Cannabis Operations |author=Cannabis Committee, AHPA |publisher=American Herbal Products Association |date=02 February 2016 |accessdate=09 August}}</ref><ref name="AHPCanna14">{{cite book |url=https://herbal-ahp.org/online-ordering-cannabis-inflorescence-qc-monograph/ |title=''Cannabis Inflorescence'': ''Cannabis'' spp. |publisher=American Herbal Pharmacopoeia |editor=Upton, R.; Craker, L.; ElSohly, M. et al. |year=2014 |isbn=1929425333}}</ref><ref name="MarcuJahan16">{{cite web |url=https://www.projectcbd.org/industry/cannabis-lab-testing-safety-protocols |title=Cannabis Lab Testing & Safety Protocols |work=Project CBD |author=Project CBD; Marcu, J. |publisher=Project CBD |date=16 March 2016 |accessdate=09 August 2022}}</ref><ref name="EricksonCleaning17">{{cite web |url=https://cen.acs.org/articles/95/i45/Cleaning-cannabis.html |title=Cleaning up cannabis |author=Erickson, B.E. |work=Chemical & Engineering News |publisher=American Chemical Society |date=13 November 2017 |accessdate=09 August}}</ref><ref name="CassidayTheHighs16">{{cite web |url=https://www.aocs.org/stay-informed/inform-magazine/featured-articles/the-highs-and-lows-of-cannabis-testing-october-2016 |title=The Highs and Lows of Cannabis Testing |author=Cassiday, L. |work=INFORM |publisher=American Oil Chemists' Society |date=October 2016 |accessdate=09 August 2022}}</ref><ref name="APHLGuide16">{{cite web |url=https://www.aphl.org/aboutAPHL/publications/Documents/EH-Guide-State-Med-Cannabis-052016.pdf |format=PDF |title=Guidance for State Medical Cannabis Testing Programs |author=Association of Public Health Laboratories |pages=35 |date=May 2016 |accessdate=09 August 2022}}</ref> Already, the groundwork for standard methods is being created by the AOAC and ASTM International, which continue to work on standardizing the determination and quantitation of cannabinoid concentrations, residual solvents, and pesticide amounts.<ref name="AOACNew19">{{cite web |url=https://www.aoac.org/news/aoac-cannabinoid-standard-in-usda-guidelines/ |title=New guidelines require laboratories to meet AOAC Standard Method Performance Requirements for Quantitation of Cannabinoids in Hemp |author=Association of Official Agricultural Chemists |work=AOAC News |date=12 November 2019 |accessdate=09 August 2022}}</ref><ref name="ASTMD37">{{cite web |url=https://www.astm.org/get-involved/technical-committees/committee-d37 |title=Committee D37 on Cannabis |publisher=ASTM International |accessdate=08 July 2022}}</ref> Proficiency tests such as the Emerald Test<ref name="EmeraldTest">{{cite web |url=https://pt.emeraldscientific.com/|title=The Emerald Test |publisher=Emerald Scientific, LLC |accessdate=09 August 2022}}</ref>, which allows multiple labs to test an anonymous sample and compare results, should also continue to drive improved performance from cannabis testing labs.<ref name="NelsonHas16" />
 
Finally, the role automation can play in cannabis testing labs is increasingly being discussed.<ref name="CannAuto20">{{cite web |url=https://biosero.com/wp-content/uploads/2021/07/SLAS-Biosero-Tutorial-2020_Chris-Scholl.pdf |format=PDF |title=Automating a Cannabis Testing Laboratory |author=Scholl, C. |publisher=Cannalysis |date=2020 |accessdate=09 August 2022}}</ref><ref name="GoldmanAuto21">{{cite web |url=https://go.analyticalcannabis.com/cannabis-automation |title=Automation in the Cannabis & Hemp Testing Laboratories of Tomorrow |author=Goldman, S. |work=Analytical Cannabis |date=27 January 2021 |accessdate=09 August 2022}}</ref><ref name="AstillAuto22">{{cite web |url=https://terpenesandtesting.com/automating-testing-accelerated-results-how-best-practices-in-cannabis-analysis-innovation-are-enhancing-safety-and-quality/ |title=Automating Testing Accelerated Results: How Best Practices in Cannabis Analysis Innovation are Enhancing Safety and Quality |author=Astill, T. |work=Terpenes and Testing Magazine |date=04 April 2022 |accessdate=09 August 2022}}</ref><ref name="RossHow22">{{cite web |url=https://www.analyticalcannabis.com/articles/how-cannabis-labs-can-benefit-from-data-and-process-automation-313857 |title=How Cannabis Labs Can Benefit From Data and Process Automation |author=Ross, K. |work=Analytical Cannabis |date=04 May 2022 |accessdate=09 August 2022}}</ref> This includes the implementation of environmental data loggers, direct-capture balances, sample preparation automation, and inventory tracking tools. Of course, software tools like the [[laboratory information management system]] (LIMS) also play a role in smoothing out workflows and reducing errors. However, automation solutions may move from something that is casually worth investing in to something that is critical to maintaining competitive strength<ref name="RossTheProm22">{{cite web |url=https://www.analyticalcannabis.com/articles/the-promising-future-of-cannabis-testing-laboratories-313955 |title=The Promising Future of Cannabis Testing Laboratories |author=Ross, K. |work=Analytical Cannabis |date=13 June 2022 |accessdate=09 August 2022}}</ref>, particularly if the U.S. government makes cannabis legal at the federal level. As more competitors enter the market, having automation to ensure quality and performance could be vital to labs who may have been around early on without automation.<ref name="RossHow22" /><ref name="RossTheProm22" /><ref name="BilyjTheCosts21">{{cite web |url=https://www.cannabisbusinesstimes.com/article/the-costs-and-benefits-of-automation-cannabis-cultivation/ |title=The Costs and Benefits of Automation in Cannabis Cultivation |author=Bilyj, B. |work=Cannabis Business Times |date=23 November 2021 |accessdate=09 August 2022}}</ref>


====5.2.1 Consolidation====
====5.2.1 Consolidation====
Another potential trend to keep an eye on with these testing laboratories: consolidation. Currently there's not a lot of data on the extent consolidation has affected the number of cannabis testing labs or how they operate; the industry is arguably still in its infancy. Regardless, mentions in press and practical examples demonstrate that consolidation is a real concern for the industry, if not now in the future. Suggestion of such came from Steep Hill Halent's CEO David Lampach in late 2013, anticipating "huge consolidation in general and fewer companies as a result."<ref name="LampachQA13">{{cite web |url=https://mjbizdaily.com/qa-with-steep-hill-lab-ceo-david-lampach-cannabis-testing-market-could-hit-40m-in-2-years/ |title=Q&A With CEO of Steep Hill Halent: US Cannabis Testing Market Could Hit $40M by 2016 |work=Marijuana Business Daily |author=Lampach, D. |publisher=Anne Holland Ventures, Inc |date=20 November 2013 |accessdate=25 January 2017}}</ref> The previously mentioned GreenWave Advisors as well as CannaSafe Analytics and Kramer Holcomb Sheik have also lent their voices to this idea in recent years.<ref name="TMIDigiPath15">{{cite web |url=http://marijuanaindex.com/digipath-digp-well-positioned-to-take-advantage-of-850m-cannabis-testing-market/ |title=DigiPath (DIGP) Well Positioned To Take Advantage of $850M Cannabis Testing Market |work=The Marijuana Index |author=CannabisFN |publisher=MJIC, Inc |date=16 July 2015 |accessdate=07 March 2017}}</ref><ref name="SchroyerIndustry16">{{cite web |url=https://mjbizmagazine.com/industry-snapshot-testing-labs/ |title=Industry Snapshot: Testing Labs |author=Schroyer, J. |work=Marijuana Business Magazine |publisher=Anne Holland Ventures, Inc |date=January 2016 |accessdate=07 March 2017}}</ref><ref name="KHSFiveKey18">{{cite web |url=https://www.khslaw.com/insights/cannabis-testing-lab-laws-in-california/ |title=5 Key Things to Know About the Cannabis Testing Laboratory Business in California |work=Insights |publisher=Kramer Holcomb Sheik LLP |date=July 2018 |accessdate=16 November 2018}}</ref>  
Another potential trend to keep an eye on with these testing laboratories: consolidation. Currently there's not a lot of data on the extent consolidation has affected the number of cannabis testing labs or how they operate; the industry is arguably still in its infancy. Regardless, mentions in press and practical examples demonstrate that consolidation is a real concern for the industry, if not now in the future. Suggestion of such came from Steep Hill Halent's CEO David Lampach in late 2013, anticipating "huge consolidation in general and fewer companies as a result."<ref name="LampachQA13">{{cite web |url=https://mjbizdaily.com/qa-with-steep-hill-lab-ceo-david-lampach-cannabis-testing-market-could-hit-40m-in-2-years/ |title=Q&A With CEO of Steep Hill Halent: US Cannabis Testing Market Could Hit $40M by 2016 |work=Marijuana Business Daily |author=Lampach, D. |publisher=Anne Holland Ventures, Inc |date=20 November 2013 |accessdate=09 August 2022}}</ref> GreenWave Advisors, CannaSafe Analytics, and Kramer Holcomb Sheik have also lent their voices to this idea.<ref name="TMIDigiPath15">{{cite web |url=http://marijuanaindex.com/digipath-digp-well-positioned-to-take-advantage-of-850m-cannabis-testing-market/ |archiveurl=http://marijuanaindex.com/digipath-digp-well-positioned-to-take-advantage-of-850m-cannabis-testing-market/ |title=DigiPath (DIGP) Well Positioned To Take Advantage of $850M Cannabis Testing Market |work=The Marijuana Index |author=CannabisFN |publisher=MJIC, Inc |date=16 July 2015 |archivedate=06 August 2020 |accessdate=09 August 2022}}</ref><ref name="SchroyerIndustry16">{{cite web |url=https://mjbizmagazine.com/industry-snapshot-testing-labs/ |title=Industry Snapshot: Testing Labs |author=Schroyer, J. |work=Marijuana Business Magazine |publisher=Anne Holland Ventures, Inc |date=January 2016 |accessdate=09 August 2022}}</ref><ref name="KHSFiveKey18">{{cite web |url=https://www.khslaw.com/insights/cannabis-testing-lab-laws-in-california/ |archiveurl=https://web.archive.org/web/20200215103305/https://www.khslaw.com/insights/cannabis-testing-lab-laws-in-california/ |title=5 Key Things to Know About the Cannabis Testing Laboratory Business in California |work=Insights |publisher=Kramer Holcomb Sheik LLP |date=July 2018 |archivedate=15 February 2020 |accessdate=09 August 2022}}</ref>  


In the fall of 2019, some discussion of California's laboratory testing market suggested consolidation could still occur. However, given that a majority of the state's labs are likely not anywhere close to full capacity, it's important to note that it could be an indicator of California's market not reaching fully saturated potential. Additionally, the likelihood of new labs opening up will be low due to the lack of saturation.<ref name="SchroyerLife19">{{cite web |url=https://mjbizdaily.com/life-has-stabilized-for-california-testing-labs-since-2018-but-hurdles-remain/ |title=Life has stabilized for California marijuana testing labs since 2018, but hurdles remain |author=Schroyer, J. |work=Marijuana Business Daily |date=07 October 2019 |accessdate=25 February 2020}}</ref> This doesn't necessarily preclude lab consolidation, but it may be possible that labs with buying power could still consider purchasing other labs in order to gain a bigger piece of the pie. In some cases—where it's actually legal—licensed producers are acquiring laboratories. In Canada, for example, several producers have acquired licensed cannabis testing and research laboratories to bring them in-house, citing greater flexibility and more security for proprietary testing and research.<ref name=BennetConsol19">{{cite web |url=https://biv.com/article/2019/04/consolidation-trend-shows-cannabis-growers-are-buying-labs |title=Consolidation trend shows cannabis growers are buying labs |author=Bennett, N. |work=BIV |date=30 April 2019 |accessdate=25 February 2020}}</ref> Even in the U.S., consolidation among not just labs but also growers and distributors is not uncommon<ref name="PletzMerger19">{{cite web |url=https://www.chicagobusiness.com/news/merger-madness-reshapes-marijuana-business |title=Merger madness reshapes marijuana business |author=Pletz, J. |work=Chicago Business |date=03 May 2019 |accessdate=25 February 2020}}</ref> and may continue as the industry further continues to evolve.
In the fall of 2019, some discussion of California's laboratory testing market suggested consolidation could still occur. However, at the time a majority of the state's labs were not anywhere close to full capacity, a potential indicator of California's market not reaching fully saturated potential. Additionally, the likelihood of new labs opening up will be low due to the lack of saturation.<ref name="SchroyerLife19">{{cite web |url=https://mjbizdaily.com/life-has-stabilized-for-california-testing-labs-since-2018-but-hurdles-remain/ |title=Life has stabilized for California marijuana testing labs since 2018, but hurdles remain |author=Schroyer, J. |work=Marijuana Business Daily |date=07 October 2019 |accessdate=09 August 2022}}</ref> This doesn't necessarily preclude lab consolidation, but it may be possible that labs with buying power could still consider purchasing other labs in order to gain a bigger piece of the pie. In some cases—where it's actually legal—licensed producers are acquiring laboratories. In Canada, for example, several producers have acquired licensed cannabis testing and research laboratories to bring them in-house, citing greater flexibility and more security for proprietary testing and research.<ref name=BennetConsol19">{{cite web |url=https://biv.com/article/2019/04/consolidation-trend-shows-cannabis-growers-are-buying-labs |title=Consolidation trend shows cannabis growers are buying labs |author=Bennett, N. |work=BIV |date=30 April 2019 |accessdate=09 August 2022}}</ref> Even in the U.S., consolidation among not just labs but also growers and distributors is not uncommon<ref name="PletzMerger19">{{cite web |url=https://www.chicagobusiness.com/news/merger-madness-reshapes-marijuana-business |title=Merger madness reshapes marijuana business |author=Pletz, J. |work=Chicago Business |date=03 May 2019 |accessdate=09 August 2022}}</ref> and may continue as the industry further continues to evolve.

Latest revision as of 16:49, 9 August 2022

5.2 Lab testing

A January 2021 report by Global Market Insights (GMI) found the U.S. cannabis testing market to be valued at about $2 billion in 2020, with a compound annual growth rate (CAGR) of 10.4 percent through 2027.[1] At a global level, GMI's October 2021 report found the total market value to be somewhere around $3 billion in 2020, with a CAGR of 21.1 percent through 2027, affected positively by medical application growth, growth in research institution investment, and cultivator and laboratory growth, negatively by a lack of uniform regulations and testing standards.[2] A more conservative number was offered by Coherent Market Insights in July 2022, indicating a global market valued at $1.66 billion in 2022, potentially growing to $4.5 billion by 2030.[3]

As for advances in cannabis lab testing, Kuzdzal et al. of Shimadzu envision a future where improvements in standardization, quality control, and research will shift what is tested and how it's tested[4]:

The cannabis industry and cannabis testing are in their infancies. As the need for better quality control continues and standardization is introduced, it is likely that lower limits for the various cannabis contaminants will be established and regulations will be introduced. Mass spectrometry will likely play a greater role in quantitation as detection levels are lowered and confirmatory tests are required. The health benefits of terpenes present in cannabis will also provide a fertile area of scientific research. CBD, CBG and other compounds appear to have a synergistic relationship with each other as well as with various THC forms and terpenes. This field needs much more investigation to determine mechanisms of action, bioavailability and health benefits.

Lab testing of cannabis should continue to provide more exact and useful results as methods and standards continue to evolve. Disparity of results between two labs for the same sample are continuing to narrow as states increasingly add testing requirements to their cannabis legislature.[5] Those testing requirements are increasingly based off a growing body of recommendations, guidance, and standards developed by the likes of the Americans for Safe Access Foundation (ASAF), American Herbal Pharmacopoeia (AHP), American Herbal Products Association (AHPA), Association of Official Agricultural Chemists (AOAC), American Oil Chemists' Society (AOCS), and the Association of Public Health Laboratories.[6][7][8][9][10][11][12] Already, the groundwork for standard methods is being created by the AOAC and ASTM International, which continue to work on standardizing the determination and quantitation of cannabinoid concentrations, residual solvents, and pesticide amounts.[13][14] Proficiency tests such as the Emerald Test[15], which allows multiple labs to test an anonymous sample and compare results, should also continue to drive improved performance from cannabis testing labs.[5]

Finally, the role automation can play in cannabis testing labs is increasingly being discussed.[16][17][18][19] This includes the implementation of environmental data loggers, direct-capture balances, sample preparation automation, and inventory tracking tools. Of course, software tools like the laboratory information management system (LIMS) also play a role in smoothing out workflows and reducing errors. However, automation solutions may move from something that is casually worth investing in to something that is critical to maintaining competitive strength[20], particularly if the U.S. government makes cannabis legal at the federal level. As more competitors enter the market, having automation to ensure quality and performance could be vital to labs who may have been around early on without automation.[19][20][21]

5.2.1 Consolidation

Another potential trend to keep an eye on with these testing laboratories: consolidation. Currently there's not a lot of data on the extent consolidation has affected the number of cannabis testing labs or how they operate; the industry is arguably still in its infancy. Regardless, mentions in press and practical examples demonstrate that consolidation is a real concern for the industry, if not now in the future. Suggestion of such came from Steep Hill Halent's CEO David Lampach in late 2013, anticipating "huge consolidation in general and fewer companies as a result."[22] GreenWave Advisors, CannaSafe Analytics, and Kramer Holcomb Sheik have also lent their voices to this idea.[23][24][25]

In the fall of 2019, some discussion of California's laboratory testing market suggested consolidation could still occur. However, at the time a majority of the state's labs were not anywhere close to full capacity, a potential indicator of California's market not reaching fully saturated potential. Additionally, the likelihood of new labs opening up will be low due to the lack of saturation.[26] This doesn't necessarily preclude lab consolidation, but it may be possible that labs with buying power could still consider purchasing other labs in order to gain a bigger piece of the pie. In some cases—where it's actually legal—licensed producers are acquiring laboratories. In Canada, for example, several producers have acquired licensed cannabis testing and research laboratories to bring them in-house, citing greater flexibility and more security for proprietary testing and research.[27] Even in the U.S., consolidation among not just labs but also growers and distributors is not uncommon[28] and may continue as the industry further continues to evolve.

  1. ↑ "U.S. Cannabis Testing Market". Global Market Insights, Inc. January 2021. https://www.gminsights.com/industry-analysis/us-cannabis-testing-market. Retrieved 09 August 2022. 
  2. ↑ "Cannabis Testing Market". Global Market Insights, Inc. October 2021. https://www.gminsights.com/industry-analysis/cannabis-testing-market. Retrieved 09 August 2022. 
  3. ↑ "Cannabis Testing Services Market Analysis". Coherent Market Insights. July 2022. https://www.coherentmarketinsights.com/market-insight/cannabis-testing-services-market-2976. Retrieved 09 August 2022. 
  4. ↑ Kuzdzal, S.; Clifford, R.; Winkler, P.; Bankert, W. (December 2017). "A Closer Look at Cannabis Testing" (PDF). Shimadzu Corporation. Archived from the original on 07 December 2018. https://web.archive.org/web/20181207195155/https://www.ssi.shimadzu.com/sites/ssi.shimadzu.com/files/Industry/Literature/Shimadzu_Whitepaper_Emerging_Cannabis_Industry.pdf. Retrieved 09 August 2022. 
  5. ↑ 5.0 5.1 Nelson, S. (3 August 2016). "Has Lab Testing Turned A Corner?". Cannabis Business Times. GIE Media, Inc. https://www.cannabisbusinesstimes.com/article/has-lab-testing-turned-a-corner/. Retrieved 09 August 2022. 
  6. ↑ "New Certification Program Brings Quality Assurance to the Medical Marijuana Industry". Information Forecast, Inc. 2016. https://infocastinc.com/market-insights/new-certification-program-brings-quality-assurance-to-the-medical-marijuana-industry/. Retrieved 09 August 2022. 
  7. ↑ Cannabis Committee, AHPA (2 February 2016). "Recommendations for Regulators – Cannabis Operations" (PDF). American Herbal Products Association. https://www.ahpa.org/Portals/0/pdfs/AHPA_Recommendations_for_Regulators_Cannabis_Operations.pdf. Retrieved 09 August. 
  8. ↑ Upton, R.; Craker, L.; ElSohly, M. et al., ed. (2014). Cannabis Inflorescence: Cannabis spp.. American Herbal Pharmacopoeia. ISBN 1929425333. https://herbal-ahp.org/online-ordering-cannabis-inflorescence-qc-monograph/. 
  9. ↑ Project CBD; Marcu, J. (16 March 2016). "Cannabis Lab Testing & Safety Protocols". Project CBD. Project CBD. https://www.projectcbd.org/industry/cannabis-lab-testing-safety-protocols. Retrieved 09 August 2022. 
  10. ↑ Erickson, B.E. (13 November 2017). "Cleaning up cannabis". Chemical & Engineering News. American Chemical Society. https://cen.acs.org/articles/95/i45/Cleaning-cannabis.html. Retrieved 09 August. 
  11. ↑ Cassiday, L. (October 2016). "The Highs and Lows of Cannabis Testing". INFORM. American Oil Chemists' Society. https://www.aocs.org/stay-informed/inform-magazine/featured-articles/the-highs-and-lows-of-cannabis-testing-october-2016. Retrieved 09 August 2022. 
  12. ↑ Association of Public Health Laboratories (May 2016). "Guidance for State Medical Cannabis Testing Programs" (PDF). pp. 35. https://www.aphl.org/aboutAPHL/publications/Documents/EH-Guide-State-Med-Cannabis-052016.pdf. Retrieved 09 August 2022. 
  13. ↑ Association of Official Agricultural Chemists (12 November 2019). "New guidelines require laboratories to meet AOAC Standard Method Performance Requirements for Quantitation of Cannabinoids in Hemp". AOAC News. https://www.aoac.org/news/aoac-cannabinoid-standard-in-usda-guidelines/. Retrieved 09 August 2022. 
  14. ↑ "Committee D37 on Cannabis". ASTM International. https://www.astm.org/get-involved/technical-committees/committee-d37. Retrieved 08 July 2022. 
  15. ↑ "The Emerald Test". Emerald Scientific, LLC. https://pt.emeraldscientific.com/. Retrieved 09 August 2022. 
  16. ↑ Scholl, C. (2020). "Automating a Cannabis Testing Laboratory" (PDF). Cannalysis. https://biosero.com/wp-content/uploads/2021/07/SLAS-Biosero-Tutorial-2020_Chris-Scholl.pdf. Retrieved 09 August 2022. 
  17. ↑ Goldman, S. (27 January 2021). "Automation in the Cannabis & Hemp Testing Laboratories of Tomorrow". Analytical Cannabis. https://go.analyticalcannabis.com/cannabis-automation. Retrieved 09 August 2022. 
  18. ↑ Astill, T. (4 April 2022). "Automating Testing Accelerated Results: How Best Practices in Cannabis Analysis Innovation are Enhancing Safety and Quality". Terpenes and Testing Magazine. https://terpenesandtesting.com/automating-testing-accelerated-results-how-best-practices-in-cannabis-analysis-innovation-are-enhancing-safety-and-quality/. Retrieved 09 August 2022. 
  19. ↑ 19.0 19.1 Ross, K. (4 May 2022). "How Cannabis Labs Can Benefit From Data and Process Automation". Analytical Cannabis. https://www.analyticalcannabis.com/articles/how-cannabis-labs-can-benefit-from-data-and-process-automation-313857. Retrieved 09 August 2022. 
  20. ↑ 20.0 20.1 Ross, K. (13 June 2022). "The Promising Future of Cannabis Testing Laboratories". Analytical Cannabis. https://www.analyticalcannabis.com/articles/the-promising-future-of-cannabis-testing-laboratories-313955. Retrieved 09 August 2022. 
  21. ↑ Bilyj, B. (23 November 2021). "The Costs and Benefits of Automation in Cannabis Cultivation". Cannabis Business Times. https://www.cannabisbusinesstimes.com/article/the-costs-and-benefits-of-automation-cannabis-cultivation/. Retrieved 09 August 2022. 
  22. ↑ Lampach, D. (20 November 2013). "Q&A With CEO of Steep Hill Halent: US Cannabis Testing Market Could Hit $40M by 2016". Marijuana Business Daily. Anne Holland Ventures, Inc. https://mjbizdaily.com/qa-with-steep-hill-lab-ceo-david-lampach-cannabis-testing-market-could-hit-40m-in-2-years/. Retrieved 09 August 2022. 
  23. ↑ CannabisFN (16 July 2015). "DigiPath (DIGP) Well Positioned To Take Advantage of $850M Cannabis Testing Market". The Marijuana Index. MJIC, Inc. Archived from the original on 06 August 2020. http://marijuanaindex.com/digipath-digp-well-positioned-to-take-advantage-of-850m-cannabis-testing-market/. Retrieved 09 August 2022. 
  24. ↑ Schroyer, J. (January 2016). "Industry Snapshot: Testing Labs". Marijuana Business Magazine. Anne Holland Ventures, Inc. https://mjbizmagazine.com/industry-snapshot-testing-labs/. Retrieved 09 August 2022. 
  25. ↑ "5 Key Things to Know About the Cannabis Testing Laboratory Business in California". Insights. Kramer Holcomb Sheik LLP. July 2018. Archived from the original on 15 February 2020. https://web.archive.org/web/20200215103305/https://www.khslaw.com/insights/cannabis-testing-lab-laws-in-california/. Retrieved 09 August 2022. 
  26. ↑ Schroyer, J. (7 October 2019). "Life has stabilized for California marijuana testing labs since 2018, but hurdles remain". Marijuana Business Daily. https://mjbizdaily.com/life-has-stabilized-for-california-testing-labs-since-2018-but-hurdles-remain/. Retrieved 09 August 2022. 
  27. ↑ Bennett, N. (30 April 2019). "Consolidation trend shows cannabis growers are buying labs". BIV. https://biv.com/article/2019/04/consolidation-trend-shows-cannabis-growers-are-buying-labs. Retrieved 09 August 2022. 
  28. ↑ Pletz, J. (3 May 2019). "Merger madness reshapes marijuana business". Chicago Business. https://www.chicagobusiness.com/news/merger-madness-reshapes-marijuana-business. Retrieved 09 August 2022. 
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