MLB To Allow CBD Sponsorships

Recently, Major League Baseball (MLB) informed teams that cannabidiol (CBD) sponsorships were no longer off limits and that they were free to pursue sponsorships in the CBD category under certain conditions. CBD companies will also no longer be prohibited from airing commercials during MLB game telecasts.

According to MLB’s Chief Revenue Officer Noah Garden, to be permitted, CBD sponsorships must promote products that are certified as not containing psychoactive levels of THC, the main active ingredient of cannabis. Any CBD product with concentrations of THC above 0.3% would not be permitted, as it is classified as marijuana, which is a Schedule I illicit substance. All CBD sponsorships will also require signoff by the MLB Commissioner’s Office.

MLB is the first of the four major US sports leagues to permit CBD sponsorships. Previously, only UFC and NASCAR had opened up the CBD sponsorship category for sale. And while MLB has opened the door to certain CBD sponsorships, for now, neither MLB nor any of the other major US sports leagues permit sponsorships in the broader cannabis category.

This change follows the new MLB collective bargaining agreement freeing up MLB teams to sell advertising positions on team jerseys and player batting helmets beginning with the 2023 season. MLB has confirmed that these lucrative jersey and batting helmet positions will not be off-limits to CBD companies. Garden noted specifically that “[MLB is] open-minded to doing a patch deal [in the CBD category], depending on the brand and what that brand represents. It has to [be] a brand that represents sports.”

Time will tell if MLB, its teams, and its fans embrace CBD sponsorships, but with cannabis industry valuations exceeding $13 billion in 2021, the rule change opens the door to a potentially lucrative sponsorship category.

ArentFox Schiff’s nationally recognized sports law practice regularly advises sports organizations (leagues, conferences, teams, national governing bodies), sponsors, and investors with respect to the sports industry on a wide array of issues and transactions, including acquisitions and sales of sports franchises, naming rights and sponsorships, properties and events, media and technology (including emerging technologies), development of new sports leagues, governance, intellectual property, sports betting and fantasy sports, compliance, and investigations.

ArentFox Schiff also maintains a cross-disciplinary Cannabis Team to provide businesses with innovative and precise solutions that respond to the increasingly sophisticated and complex needs of the cannabis industry, including CBD products.


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