Months after the league allowed individual teams to sell sponsorships to cannabidiol (CBD) companies, Major League Baseball now has an official league-wide CBD partner in Charlotte's Web Holdings (CWBHF) .
MLB is now the first major professional sports league with a CBD partnership, marking a big milestone for a still fledgling cannabis industry that could use every bit of legitimization from mainstream culture that it can get.
"As a leader in the CBD category, with products that provide health and wellness benefits, Charlotte's Web is a welcome addition to the MLB family, representing a landmark partnership in baseball and sports," said Noah Garden, MLB's chief revenue officer.
The press release announcing the partnership did not give monetary information, and called the pact a "historic multi-year agreement."
The partnership announcement comes at the same time as the launch of Charlotte's Web Sport - Daily Edge tincture that CW says is the first hemp-derived tincture to be "certified for sport" by the NSF -- a 75-year-old global product safety agency.
"Charlotte's Web products which receive the NSF Certified for Sport® designation have met the highest safety standards and can be promoted across MLB events and media platforms," Garden said.
The company says its tincture supports recovery from "exercise-induced inflammation," allowing athletes to get back on the field quicker with less risk of re- injury.
Summed up, the company says that CBD helps the body manage and recover from stress, including the stress from athletic pursuits.
CBD's Ceiling
Charlotte's Web is looking to grow its market lead in the hemp-derived products through its new sports venture.
"The CBD sports category is gaining great momentum with MLB's recent second quarter public announcement to approve CBD sponsorships, which, as we believe, was a landmark change for a professional sport and is expected to be followed by the other leagues," said Jared Stanley, co-founder and COO of Charlotte's Web, during the company's last earnings call.
Total CBD product sales have more than doubled from $845 million pre-pandemic in 2019 and are expected to reach $1.9 billion this year, according to Statista.
Data research firm Brightfield Group put out a note over the summer estimating that CBD sales could reach $11 billion by 2027. They projected 2022 sales of $5 billion.
Charlotte's Expansion Plans
Charlotte's Web has leaned into partnerships with big entities to get its name and brand more widely known.
Back in 2019, the company reached a distribution deal with Kroger (KR), the country's largest grocery retailer. At the time the plan was for Kroger to put CW's products in 1,350 stores across 22 states.
That 2019 deal is paying dividends after Kroger announced that it will buy rival grocer Albertsons ACI for $25 billion Friday.
The combination would create a grocery market giant, with more than $210 billion in annual sales -- topping third-ranked Costco Wholesale.
Kroger already has nearly 2,800 stores nationwide, the Albertsons tie up would add another 2,200 stores, many of which could see Charlotte's Web products on their store shelves soon.
