The partnership, announced Wednesday, marks the first time a major U.S. professional sports league has formed a sponsorship deal with a cannabis company.
The deal is worth $30.5 million over the course of three years, according to regulatory filings. MLB also now owns nearly 6.2 million shares, or a 4% stake, of Charlotte’s Web.
“We applaud MLB for being the first-mover in professional sports CBD and are thrilled to welcome their league as a respected strategic partner,” said Jacques Tortoroli, CEO of Charlotte’s Web.
Under the deal, Charlotte’s Web must pay the league a 10% royalty on any products it sells that has MLB branding on it after total sales exceed $18 million.
“The rights fees are payable over the agreement term and are reallocated from (Charlotte’s Web) annual marketing budgets to the MLB opportunity,” said Cory Pala, director of investors relations at Charlotte’s Web told Green Market Report.
Hundreds of millions of baseball fans will catch the Charlotte’s Web brand on the MLB Network, during All-Star Week and into the postseason, including the World Series.
The audience for the brand includes:
- 175 million fan base
- 180 million social media followers
- 111 million broadcast viewers
- 8 million email subscribers
Pala added that the deal brings “validation and credibility not only to Charlotte’s Web, but the CBD category in aggregate, and illustrates the enormous and ongoing interest in the $5 billion CBD market.”
In a statement, MLB Chief Revenue Officer Noah Garden said that the partnership makes CBD a “more widely adopted part of the health and wellness regimen of our players and fans.”
Charlotte’s Web’s sports tincture launched on the company’s web platform on Tuesday during the Division Series with an exclusive run for the MLB Postseason. By 2023, the expanded product line will appear in retail sports and health and wellness channels, the company said.
The deal comes weeks after Charlotte’s Web inked a distribution deal with Southern Glazer’s Wine & Spirits, marking the latest cannabis company to work alongside the distribution giant.