SBJ Marketing: A CBD sponsor is summoned by the majors

MLB now has a corporate sponsor on Charlotte’s Web that sells CBD products with the paste silhouetted on the packaging. You will see this mark displayed on electronic signage during the MLB playoffs, and the mark is mounting a World Series promotion. Recall a old Tom Lehrer song about a whole different kind of proliferation: “Who’s next?”

Marketing and research firm Navigate recently conducted a study on behalf of six MLB teams to determine the potential of the CBD category for sponsorships. It is estimated that teams in the top 10 MLB markets could generate CBD sponsorships with average annual values ​​between $550,000 and $1.6 million. Are there actually 10 deals to be had? That’s an entirely different question, but estimates of the CBD market having more than tripled to $16 billion by 2026 has the sell-side of properties asking a lot of questions. We’ll add another query: when is the first uniform CBD ad patch?

“In other categories, brands have been willing to overspend to gain first-mover advantage, and that may mean they’re not overspending,” Navigate President Jeff Nelson said.

The MLB deal is no small investment for Charlotte’s Web, which reported revenue of $96.1 million in 2021. The deal is for U.S. rights and covers this year’s playoffs and three additional years. Sources said the company will pay MLB a total of $30.5 million and a 10% royalty on MLB-branded merchandise after sales top $18 million, along with around $6.1 million. shares, or 4% of the company.

The terms of Charlotte’s Web-MLB deal are certainly significant enough to attract the attention of other major sports properties, which have mostly been on the sidelines. “You’re going to see this open up quickly,” said MLB CRO Noah Garden. “We had to educate our own people. They’ve heard of CBD. Many don’t really know what it is. We spent a lot of time with our owners, explaining what it was, and our certification process. (NSF), and we are committed to finding a partner with whom we could be proud to have an association.

While hemp-derived, non-psychoactive CBD has been used to effectively treat everything from epilepsy to muscle aches and anxiety, the industry has been hurting itself for some time by associating itself with psychoactive cannabis, by cheerfully and regularly putting pot leaves on the packaging. It won’t get them into Walmart or Walgreens; It’s already had the opposite effect. As a result, Charlotte’s Web CEO Jacques Tortoroli cited increasing brand awareness, expanding distribution and closing the information gap as priorities for the company’s MLB sponsorship. “We are not psychoactive cannabis and people need to know that,” he said. “We are about botanical wellness.”

In addition, Aquarius Sports & Entertainment has worked with another CBD company (Aquarius President & CEO Marc Bluestein did not specify which), exploring potential opportunities at major sports properties over the past 22 months. “It’s too complicated with pot per se, so I think a league deal will communicate that CBD is about health and wellness, and addressing things like chronic pain, sleep deprivation,” said Bluestein. “Is this going to be the next fin-tech type category where there will be more and more opportunity? Or is this the next crypto category, where the bubble bursts after an initial rush? …I I still don’t have a handle on how deep and wide this will take, but I don’t think it will be like the casinos or everyday fantasy where nearly every team is present.

As the CBD category opens up to more properties, activation will be interesting. 3Chi’s sponsorship for hemp-based products with Richard Childress Racing, Tyler Reddick and the No. 8 NASCAR Cup team sees him active in a dozen race track fan zones, with tents selling gummies, vapes, and edibles as permitted by state law. So far, no other NASCAR team has made the jump to CBD.

Justin Buck, vice president and head of business development at Integrity 9 Sports & Entertainment, helped shape the 3Chi sponsorship. He’s heard the same rumors of a NASCAR league deal that we have, but so far there haven’t been any additional deals with Team CBD. “Everyone is looking hard,” he said. “It’s like the spirits 20 years ago, when nobody wanted to confront them. Now properties have separate offerings for white and brown liquors.

The UFC in 2019 signed its first CBD deal with Aurora, which fell apart amid that sponsor’s financial struggles. The UFC’s current five-year sponsorship with Love Hemp is one of the top 10 sponsorships in the MMA circuit. “It makes so much sense because professional athletes use these products,” said Paul Asencio, UFC Senior Vice President/Global Partnerships. “For anyone considering any of these offerings, I would say do your due diligence, find out what these companies are putting into their products, and make sure they are fiscally responsible.”

  • The Florida Panthers have landed a jersey crest sponsorship deal with automotive retailer AutoNation, whose logo will appear on the team’s away jerseys, SBJ’s Alex Sliverman reports. The team remains in the market for a home jersey patch deal, as well as an arena naming rights sponsor for FLA Live Arena.
  • The NHL names Henkel Canada’s Purex brand the league’s first-ever Canadian laundry detergent sponsor, Silverman notes. The league does not have an American sponsor in the laundry detergent category.
  • Allied Sports has won a shootout with an agency to manage consumer electronics brand LG Electronics USA’s NCAA sponsorship rights. The deal, now in the second year of a three-year deal, was handled internally in its first year.
  • Dodge’s talks with NASCAR over re-entering the racing series as a manufacturer have stalled, sources told SBJ’s Adam Stern, as NASCAR’s search for an elusive fourth official engine builder to join the sport continues.

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