MLB's Deal With CBD Maker Is New Territory for Marketing

Sneakers, snacks, beverages and even office equipment have been mainstays of sports marketing for years. But now, Major League Baseball has cracked a new one: cannabis products. MLB scored an alliance with CBD maker Charlotte's Web (note: the brand is not sold in dispensaries) this week. The deal marks first partnership between one of the Big Four pro sports leagues and a cannabis business. The seeds of the agreement were originally planted in June. Now, are basketball, football and hockey likely to line up as well for similar deals? What it means for the future of sports So far, the other leagues are taking a "wait-and-see" approach, a representative from one of the Big Four told Adweek. Meanwhile, CBD brands have dipped their toe in the water with deals with individual athletes, teams and smaller leagues and sports. Soccer star and gold medalist Megan Rapinoe partnered with her twin sister Rachael's CBD brand Mendi, and Charlotte's Web's CBD Medic sub-brand is endorsed by NFL star Rob Gronkowski. Charlotte’s Web Scales a Moab Mountain to Give Free CBD to Athletes in Action Earlier this year, the NBA Players Association partnered with former NBA player Al Harrington's Re+Play CBD brand on a product line to be sold on Amazon and at Walmart. In 2019, Craft 1861 became the first CBD sponsor of an Indy 500 team. The UFC signed a five-year deal with Love Hemp last year. Still, CBD has yet to operate on the scale of one of the Big Four professional sports leagues. Whether it's NFTs, crypto or betting, sports has embraced emerging categories as a marketing strategy. With escalating costs for everything from player salaries and team expenses, let alone buying a team, finding new streams of revenue is critical in the professional sports category. "The goal is not to keep carving up the same pie in different directions," sports marketing expert and Columbia University professor Joe Favorito told Adweek. "It's to make the pie bigger. And the only way you do that is by opening up new categories. And if you look at the history of categories such as gambling, hard liquor, spirits, various pharmaceutical companies, all were not allowed as little as five years ago." The MLB removed marijuana from its list of banned substances in 2019, making it easy for a partnership like this to happen. Adweek reached out to the other three leagues. The NHL does test for CBD but doesn't punish players for positive tests. An NHL spokesperson told Adweek: "We continue to evaluate and explore all opportunities in new and emerging categories." The NBA and NFL currently have different drug policies. The NBA still has CBD listed as a prohibited substance on its anti-drug program. The NBA doesn't engage in league or team partnerships with the makers of such substances. It has, however, softened its testing measures, announcing last year it would stop randomly testing players. The NFL declined to comment. It has also eased its policies, halting CBD testing during the offseason and only testing once between the start of training camp and preseason. The league also has put $1 million into research into the impact of cannabis and CBD on pain management. Now batting: cannabidiol This past summer, MLB told its 30 teams they were allowed to sell CBD sponsorships. Just last week, the league approved CBD (aka cannabidiol) sponsorships up to and including team jersey patches. The deal with Charlotte's Web is a multi-year partnership kicking off during baseball's Division Series and will run through the playoffs. "This is such a strategic pillar for us," said Jacques Tortoroli, CEO of Charlotte's Web. "We're going to be reallocating historical levels of media spending and marketing to our partnership with the MLB. We have access to a treasure trove of assets [to] deploy our brand with the league, and we plan to do that in the most efficient ways to be able to build awareness, importantly, in the early days drive education for the consumers, the teams, the players, etc." Tortoroli also said there was to come in the form of advertising and marketing at the league's biggest events such as All-Star Week, the postseason and the World Series. MLB will display signage for Charlotte's Web as well as its other official sponsors at the stadiums hosting the 2022 World Series, as well as pushing it on all of its channels. "A big part of this partnership is going to be using all of our traditional levers, whether it's digital TV or in-stadium," MLB evp of sponsorship sales Bill Morningstar said. "The first step is we have to create awareness for the brand. The second step is education, and then the third step is consideration. We're going to use all the necessary means to hit on all three of those areas." Legitimizing the CBD category For Charlotte’s Web, a central piece of the partnership is brand awareness. By displaying the MLB logo on its Daily Edge product, a broad-spectrum hemp-derived tincture certified for sport by the NSF, the brand gains some additional legitimacy by working with a pro sports league. ESPN and the Evolution of Sports Marketing The NSF is a global third-party organization that establishes standards for safety, quality, sustainability and performance, and certifies manufacturers and products against them. The new Charlotte’s Web Sports line will also include gummies, topical products and oral sprays. Charlotte's Web started working in the sports category more this year. The brand recently partnered with Angel City Football Club of the National Women’s Soccer League. Tortoroli, who became CEO of Charlotte’s Web at the top of this year after sitting on the company's board, said sports has been a priority for the brand. He told Adweek the plan is to build brand awareness and education among consumers and athletes. "Sports was an obvious category," he said. "We have the science credentials no one else has, and we just had to be smart about how we decided to enter the market." Though Charlotte's Web is a top-selling brand in the CBD category in the U.S., the publicly traded brand's sales have slowed recently. In its most recent quarterly statement, Charlotte's Web's reported net revenue of $18.9 million, a YoY decrease of 21.8% versus $24.2 million in Q2 2021. The partnership with MLB is sure to raise its profile by getting in front of a new consumer base. Awareness and education are important since many people don't know what CBD actually is. According to a 2021 survey from data startup Invisibly, 68% of U.S. consumers who have never tried cannabis said they don't know the difference between CBD and THC-containing products. The distinction is important as THC is the compound that produces the "high" that cannabis is known for, while CBD does not. The U.S. CBD market reached $4.7 billion in total sales in 2021. Take Me Out to the Checkout-Free MLB Stadium Experience Buy me some CBD and Cracker Jacks As the partnership begins, questions remain about how different the style and form of the ads will be from established sports marketing. Will there be ads on television? What will stadium ads look like? Just a few years ago it would've been hard to imagine CBD ads during baseball games, but Favorito said changes in social acceptance and regulation have drastically changed the rules. As we've already seen, sports betting advertising has risen dramatically in the past two years. "You're going to see more and more [CBD advertising]," Favorito added. "Baseball is going to do it conservatively but effectively. This is just the beginning. You'll see it across the board pretty soon."

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