The Drum Awards for Marketing - Extended Deadline

-d -h -min -sec

Major League Baseball (MLB) Marijuana Brand Strategy

Cannabis and CBD brands harden their pitch to pro sports leagues

Author

By Kendra Barnett, Associate Editor

July 19, 2022 | 8 min read

MLB is the first of the US’ major pro sports leagues to green-light CBD advertising and sponsorships at the national level. As part of The Drum’s Sports Marketing Deep Dive, we look at how the move points to a broader sea change already underway.

Person putting CBD drops on their hands

Professional sports leagues are signaling growing acceptance of the CBD and cannabis industry / Christin Hume

Last month, Major League Baseball announced that it will allow teams to take on sponsorships from CBD brands beginning next year. It’s the first of the US’ four major pro sports leagues to do so, with the NBA, NFL and NHL continuing to bar both CBD and cannabis marketing at the national league level. Nonetheless, it represents a significant advancement for CBD and cannabis acceptance in sports.

“You kind of take these new markets – blockchain is another good [example] – and you watch them; you don’t jump in at the beginning when it’s a wild, wild west, but you try to come in at a time where there’s some separation between the companies that are here for the long term and the companies that [aren’t],” MLB’s chief revenue officer Noah Garden tells The Drum.

“With CBD specifically, we felt like we were reaching that point in time. And we had a lot of requests from CBD companies that were looking to invest in the sport, whether it was locally with a club or nationally with MLB.”

And it’s not just CBD brands pushing for new opportunities; the demand is there, too. 2021 data from Invisibly showed that 38% of US consumers have tried CBD products, whether in the form of topical or ingestible products. “These things are everywhere now,” says Garden. “We’re at a point where you might even go to the supermarket and buy CBD. And folks are learning about … some of the benefits that they can have on their personal life. So our fans are interested.”

Garden explains that MLB wasn’t afraid to be the first major pro sports league to take the leap. “We pride ourselves on trying to be on the cutting edge, [especially] on the digital side of our business – we always like to be one step ahead,” he says. “This is just another extension of that.” Sponsorships from CBD brands may take the form of television spots, digital ads or even jersey patches.

MLB CBD sponsorships will, of course, have to meet a set of specific regulations. CBD products advertised via the league cannot contain psychoactive levels of THC and must receive approval from the testing group the National Sanitation Foundation.

The league’s decision evidences a shifting tide: professional sports are relaxing their historically strict rules. “Pro sports, overall, is loosening the lingering restrictions on cannabis,” says Lisa Jordan, vice-president of marketing at Canna Advisors, a nonprofit organization that provides regulatory advisory services to cannabis brands. “We see professional athletes – from NFL to MLB and PGA – getting into the business themselves and also speaking up as advocates for cannabis as a sports recovery tool. “With these amplified voices, the stigma and bans are being chipped away.”

The trend is surprising in some ways, especially considering sport’s historic hostility towards cannabis and hemp use. Pro athletes have notoriously been slapped with huge fines for consuming cannabis in violation of their contracts. Last year, American sprinter Sha’Carri Richardson made headlines when she was cut from participating in the 2021 Tokyo Olympic Games after she tested positive for marijuana in a routine drug test. The news spurred newly impassioned debates about sports organizations’ tolerance for marijuana use amid increasingly lax regulatory stances and growing criticism of the US’ history of racial disparity in marijuana-related arrests and criminal justice.

Sports organizations are generally wary of getting caught in the crosshair of these culture wars, despite the steady roll of destigmatization around marijuana and hemp. Even MLB, which is blazing a new path in the industry by allowing CBD sponsorships, is cautious. Namely, it wants fans to know that CBD brands advertising in the league have no active THC levels. “We feel much differently, obviously, about THC than we do CBD,” says Garden. “[There is] a pretty big educational component of any association that we would do with a [CBD] company, because we think that that’s important – we want to help educate our fans and hopefully make them understand the difference [between CBD and THC].” It’s a tall order: recent data from Invisibly indicates that, among US consumers who have not tried CBD, 68% don’t know the difference between CBD and THC.

Beyond stigmatization, however, there remain a number of hurdles to widespread acceptance of CBD and cannabis marketing in sports. The primary challenge, of course, is the patchwork quilt of legislation regulating the advertising and consumption of CBD and cannabis products. “There are two layers of challenges for mass market cannabis advertising: the continuation of federal prohibition and state-level regulations that vary widely,” Jordan says. “At the state level, there are as many variations in advertising regulations as there are programs.” As a result, cannabis and CBD brands are forced to navigate a whole range of regulations to ensure they are in compliance. Jordan predicts that the landscape won’t be simplified until federal prohibition is lifted.

Even in states where cannabis and CBD marketing is allowed to one degree or another, publishers of all kinds remain cautious about green-lighting such content. As Jordan puts it, they “continue to hide behind inane and antiquated policies related to cannabis as a scheduled substance”. As such, cannabis brands often face undue hurdles to promoting their products, even in markets where, in theory, it should be relatively easy.

In spite of these and other challenges, the cannabis and CBD industry is making headway in sports. In 2018, the World Anti-Doping Agency removed CBD from its list of prohibited substances. Earlier this year, a taxpayer-funded PSA criticizing the discriminatory dangers of cannabis criminalization aired in most parts of New York during the NBA finals, garnering predictably mixed reactions (one major television station refused to air the spot). And although the NBA, NFL and NHL do not allow CBD or cannabis sponsorships at the league level, individual teams are now generally given leeway to negotiate their own advertising agreements if regulations allow.

And increasingly, CBD and cannabis brands are gaining endorsement from individual athletes, ranging from Australian golfer Marc Leishman to legendary NFL star Rob Gronkowski. Former pro boxer Mike Tyson recently launched his own cannabis company, Tyson 2.0.

“As CBD is an effective, non-habit-forming, plant-based aid to treat muscle pain and promote recovery, athletes are the best-positioned promoters of the category,” says Tyson 2.0 co-founder, president and chairman ​​Chad Bronstein.

Bronstein also points out that there is a lot of money to be made – for sports leagues, brands and media publishers alike. “Marketing CBD and cannabis products in professional sports is a massive way to increase revenue for sponsorships,” he explains. He argues that the opportunities are only growing in light of market changes. “Many non-cannabis companies, particularly in the alcoholic beverage space, are leaving huge sponsorship deals due to cost and an inability to effectively market them throughout the year. With that loss of exclusivity, leagues need to pivot and consider incentivizing packaging deals that may be more lucrative if they open up to the right verticals – like cannabis.”

If the industry becomes more friendly toward cannabis, says Bronstein, Tyson 2.0 could soon find itself in cahoots with major sports leagues. “Nothing is off the table,” he says. “We are excited to find the right partners in various leagues to take our brand to the next level.”

Cannabis advocates, for their part, are optimistic that the tides are shifting for good and that cannabis brands might soon find a place in sports. “Hopefully pressure from all sides – the advertiser, the athletes, the consumer – will lead to changes across the board for cannabis advertising,” says Canna Advisors’ Jordan. “We will likely see more changes in pro sports as collective bargaining agreements expire and are renegotiated. These player-level changes should push the rest of the league forward in adopting more broadly favorable cannabis policies.” Cannabis marketing, she suggests, needs to be “normalized at the level of alcohol brands”.

Check out The Drum’s latest Deep Dive, The New Sports Marketing Playbook, and learn the tactics employed by the world’s biggest sports organizations and their star athletes to stay top of their game.

Major League Baseball (MLB) Marijuana Brand Strategy

More from Major League Baseball (MLB)

View all

Trending

Industry insights

View all
Add your own content +