On June 22, 2022, Major League Baseball officials announced that teams can now sell CBD sponsorships.
According Sports Business JournalCBD products must first be certified by NSF International (an organization dedicated to product testing and sports league safety), and teams will also need clearance from the MLB commissioner’s office.
As reported by Marijuana TimeMLB chief revenue officer Noah Garden seemed very excited about the development during a conference call with the team’s marketers earlier in the week.
“We’ve been watching this category for a while and waiting for it to mature to the point where we can feel comfortable with it,” the MLB official said. “Our fans are really the kind of customers they are looking for, and we like to be the first. It’s a good opportunity for us and the clubs.
Garden went on to explain that potential sponsors embracing the NSF certification process is what really made MLB comfortable enough to move forward.
The fact that CBD is now an “approved category” for MLB sponsorship comes as no surprise.
For one thing, MLB has already pivoted to more sensible drug policies regarding cannabis and other substances.
The real surprise might be the delay. What took so long?
Maybe it has something to do with the recent downturn in the cryptocurrency market, which had invested heavily in sports sponsorship over the past year and must now cut costs.
Also, last November it was reported that crypto companies have been forced to pay a premium for sports sponsorships compared to more established industries, so it will be interesting to see if this happens with CBD sponsors in baseball.
In fact, some argue that CBD isn’t even a real industry due to the fact that it’s largely unregulated. This has led to a shortage of substandard products, forcing consumers to find CBD products that actually work.
MLB is being diligent here by introducing the NSF certification process, but will the primary focus be solely on controlling THC levels, or is the NSF genuinely willing to screen CBD products for quality and global insurance?
Now that MLB sponsorship is a reality, interested CBD companies would also do well to make sure they make the most of all finalized offers with the major sports league.
We’ve had alcohol sponsorships in baseball for a long time with players like Coors Field and Busch Stadium, so when will sports teams really open up to cannabis sponsorships?
The biggest hurdle here is obviously the erroneous status of cannabis as a Schedule I controlled substance (that should never have happened in the first place).
This federal status makes it difficult for the entire cannabis industry to operate like any other industry.
In fact, if a sports league allowed weed sponsorships, cannabis companies couldn’t recoup the expense. due to IRS tax code 280Ewhich prevents them from deducting expenses except for the cost of goods sold.
CBD companies have not been subject to 280E since the Farm Bill of 2018 was passed. That doesn’t change the fact that the CBD industry is a hot mess on the regulatory side, and by default CBD companies don’t are generally not as well organized as licensed cannabis operators.
This could create ball club headaches down the line and possibly even expose some of the festering warts in and around the CBD space.
Or it could propel both cannabis and CBD to greater heights of legitimacy and sensible regulation.
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