SportsCannaBiz: The Sponsorship Match Game

For the purposes of our SportsCannaBiz articles, we will use cannabis and marijuana interchangeably. These are products that are often known as “pot” or “weed,” contain the compound tetrahydrocannabinol (THC), have psychoactive effects that give the high’ sensation and are recreationally legal in 11 states and medicinally legal in 28 states.

Additionally, we will refer to products containing cannabidiol (CBD) as CBD or hemp-derivative products. These products are non-psychoactive, which is to say they do not product the “high” associated with THC, and have exploded in interest due to a tendency to relieve pain and anxiety. It should be noted that different types of cannabis may also contain CBD.

TMR is taking a look into the cannabis landscape, how CBD is impacting the sports sponsorship industry and how it may continue to grow, develop and change. We dig into existing deals, how leagues and associations are approaching their ties to cannabis and CBD, and offer our thoughts on what could be still to come based on the opportunity that exists.

This is Part IV of TMR’s ongoing #SportsCannaBiz series. We recommend that you read Part I, Part II and Part III before continuing on.

Part IV: Partnerships

At this point you may be thinking, “Lee, there’s no way you can possibly still have more to say on cannabis – there aren’t even that many deals to cover!” Fortunately (or maybe unfortunately) for you, I’m here to tell you that there’s an endless stream of thoughts on just about everything cannabis.

Sit down and strap in because for Part IV of TMR’s SportsCannabiz series, we’re playing a round of…”The Sponsorship Match Game.”

In short, we’ve taken four very real properties in the LPGA Tour, NHL Canada, MLB’s San Francisco Giants and MLSnone of whom have remotely given us express written consent to do any of this–and matched them up with four completely fictional cannabis and CBD brands.

Given the growth of this space, we can start to think about how long the marketing revenue in this space can go unspent. The cannabis market is expected to be worth $73.6 billion in the US by 2027 (up from $11.3 billion in 2018) while Canada’s more mature market is expected to level off at around $8.7 billion annually in 2020. While Canada’s population represents approximate one tenth of the U.S., it is worth noting that not all of the U.S. population has access to medical or recreational cannabis. As such, we’ve put these fake brands at a business stage that reflects both the maturity and saturation of the market in which they operate.

For example, a brand in Illinois where cannabis was legalized this year would be an earlier-stage, immature market compared to that of one in California, which legalized cannabis in 2016 and would be considered a mid-stage, mature market, relative to the rest of the U.S. and Canada.

Finally, as it relates to these properties, we have matched up the space that the brand operates within to general fit based on what we have discussed in previous articles, what the asset mix would look like based broadly on our knowledge of local regulations, and the obstacles they would need to overcome to implement these partnerships.

Got it? Alright, without any further ado, let’s dive right in to our first pairing:

Match Game Brand 1: Sine Brands
  • Tagline: Natural ways to live healthier every day.
  • HQ: Portland, Ore.
  • Target(s):
    • Women, Ages 35-70
    • Men, Ages 65+
Match Game Property 1: LPGA Tour
  • Sponsorship Type: Tour Sponsor with Exposure at Tournaments in Legalized Markets (9 based on 2019 LPGA schedule)
  • Key Assets:
    • VIP Club entitlement (21+ only) with product showcase and display space
    • Event hospitality (hosted in VIP Club)
    • Tickets with promotional rights
    • Ability to partner with player(s)

You’ll remember in our first article, we talked about the PGA and LPGA having the strongest fan demographics to support a brand’s growth – aging adults who are new or returning to cannabis. These fan bases allow for a female-focused consumer brand to tie to a major sports property and reach markets in states with legal adult recreational cannabis, all while educating a golf-playing fan base on the health benefits of cannabis and CBD.

We wrote about real CBD company and Bubba Watson sponsor, cbdMD in Parts I & III cbdMD

Achy joints? We’ve got you covered. Sore after 18 holes? Try this topical cream. Playing 18 with your neighbor who gets a bit too intense? Replace his cigar with this vape pen.

Ultimately, this partnership allows for a single, national brand to target nine different markets where their products are legal to sell, making tours and properties that move from location to location an attractive fit for national brands over local partnerships.

From both the consumer brand exposure to the point-of-sale vendors, Sine Brands has an opportunity to entertain and host key customers, influencers (an important piece given the inability for a brand to show people using cannabis products in most states) and vendors that help their business run. These fans could be hosted with regular passes or blown out in a VIP experiential space showcasing products and uses that travels to all (legalized) tour cities.

Match Game Brand 2: Maple Leaf Products
  • Tagline: Canada’s new iconic leaf.
  • HQ: Toronto, Ont.
  • Target(s):
    • Young Adults, Ages 21-35
Match Game Property 2: NHL Canada
  • Sponsorship Type: Geographically-Restricted League Sponsorship (Canada-only) w/ Exclusive Category Rights to All League Marks in Canada
  • Key Assets:
    • Category exclusivity
    • Intellectual property & merchandising rights
    • Digital activation (for 21+ fans)
    • VIP hospitality
    • Tickets

What could be more iconic than hockey in Canada? Maple syrup? Timbits? Justin Trudeau’s flowing hair?

Lumberjack and maple syrup: Icon chugs
Tim Horton’s Timbits, Canadian IconConor Samuel (Unsplash)
Justin Trudeau and his Iconic Canadian hair

That debate may rage on, but one thing for sure is that the NHL has the most passionate pro sports fan base in Canada, with the most teams across markets playing the national pastime–sorry, curling–so it would only make sense that the widest reaching partnership would be tied to this property.

Being able to manage who sees cannabis branding is going to be key to getting any of these sponsorships off the ground. Generally speaking, cannabis needs to be placed in spaces where underage consumers cannot see the advertising – a difficult to impossible task given the numbers of families who attend sporting events together.

Sure, you could take the vague approach of logo placement without context, but when you’re building a brand–as almost all cannabis brands still are–full context is king. If you can’t tell who and what your brand is and what the capabilities are, you’re simply wasting money on sponsorship assets.

Finally, NHL’s partnership with Major League Baseball Advanced Media (MLBAM) provides an opportunity to digitally “gate” virtual activations, only opening them up those of legal age in the province where the fans reside. This is critically important given that the legal age for recreational cannabis in Canada varies by territory from 18 (Alberta) to 21 (Quebec) and allows for digital fan spaces and events to comply with local laws and ordinances.

Match Game Brand 3: Golden State Mobile Dispensary
  • Tagline: Bring the Golden State of mind to you.
  • HQ: San Francisco, California
  • Target(s):
    • Working Millennials
    • GenX Professionals
Match Game Property 3: San Francisco Giants
  • Sponsorship Type: Official Cannabis Delivery Partner of the San Francisco Giants
  • Key Assets:
    • Category exclusivity
    • Intellectual property and other passthrough rights
    • Digital activation (for 21+ fans)
    • Gameday promotions
    • Hospitality
    • Tickets

With cannabis delivery taking off in major markets across California, the end-user experience in the Golden State–and frankly any cannabis market–certainly isn’t your parents’ cannabis experience. There are huge companies entering the retail, distribution and supply chain sides of the business, offering new ways for consumers and sellers to access cannabis.

As Tim Conder, the co-founder and president of Blackbird, a real Bay Area cannabis delivery company, told Forbes, “Much like an Amazon for cannabis, we move medical and recreational cannabis products downstream through the supply chain and ultimately into the hands of end consumers through our consumer marketplace,”

We can’t speak specifically to Blackbird’s sponsorship goals and objectives, but we can examine what might make sense for our similar, yet hypothetical, Golden State Mobile Dispensary to do.

Sacramento-based BudCars is a real company (unlike our hypothetical example, Golden State Mobile Dispensary) that delivers cannabis

Much like the Maple Leaf Products example in hockey above, a delivery company would heavily benefit from working with an MLB property thanks to MLBAM. Being able to target fans digitally, drive them to a specific page, capability or activation, and convert on those fans is something that not ever sponsor category has the benefit of doing and that most cannabis sponsors won’t be set up to do for a very long time.

This could be something as simple as a promotion that runs like your local fast-food chain where if the Giants score 10 runs, you get free delivery on your next Golden State Mobile Dispensary order. Tying result-and-reward activations as a benefit for highly passionate and engaged Giants fans–who are also in GSMD’s target demo sweet spot–can drive not only awareness but huge sales lift.

Finally, the cherry on top of it all. By working with a local property near their headquarters, Golden State Mobile Dispensary can point to their partnership as a point of pride within their office, for employees and vendors alike. This would award them the opportunity to host employee outings, entertain new and prospective candidates and vendors, and even run fan promotions to really carve out market share within the Bay Area.

We would also note that, while this partnership could also work with fellow Bay Area team the Oakland Athletics, we chose the Giants for their established tech-forward sponsorship portfolio and recent record of on-field success as resulting in a more fan-friendly sponsorship.

Match Game Brand 4: Zen CBD
  • Tagline: Bring your body into equilibrium.
  • HQ: Anywhere, USA
  • Target(s):
    • Pro athletes
    • Recreational athletes, Ages 21-65
Match Game Property 4: Major League Soccer
  • Sponsorship Type: Official CBD Sponsor of Major League Soccer
  • Key Assets:
    • Category exclusivity
    • Intellectual property & merchandising rights
    • Club activation (in select markets)
    • Exclusive digital content channel
    • Hospitality
    • Tickets

We’ve saved CBD for last, knowing that it’s arguably the major sponsorship deal that we are the closest to, if any.

This one probably comes as the least surprising of any of the previous deals for two reasons. First, CBD is legal in all fifty states. Second, public acceptance of CBD is growing and widely positive to boot. Players, coaches and trainers are already using the product, are educated on its benefits and there is a direct correlation (though not FDA approved) to the benefits of CBD and sports performance.

Now, because of this acceptance, CBD brands are focusing on the use of their products as a way to aid recovery and rest, especially for top level athletes.

For a CBD brand like Zen CBD, what could be a better fit than focusing on the athletes who run more than maybe any other athletes around the world? By aligning a brand to a sport where players have the longevity of soccer, combined with the general body wear-and-tear of its athletes, Zen CBD can align its brand to athletic success.

Bend, Ore.-based Tokyo Starfish is a real company that has promoted their CBD products with snowboarders @tokyo_starfish

By aligning Zen CBD to MLS and soccer in the U.S., Zen is also able to choose targeted markets, across the country where their products are widely distributed or where there is a growth opportunity. This will allow for Zen CBD to pick and choose how to most effectively spend activation dollars and, if successful, would result in the greatest return.

Say Chicago, Kansas City and Atlanta are Zen’s core markets–the structure of MLS allows for league-wide deals to trickle down into local, more targeted deals, where it makes sense. This flexibility could allow for anything as simple as LEDs for introductions to assets as complex as the club’s jersey sponsorship.

While we think even a CBD-only deal in a major sport remains unlikely before 2022, MLS could be willing to “take the plunge” in a faster time-frame given its smaller media rights deals and willingness to try out new things compared to its other Big 5 counterparts. It will be up to the Las Vegas Lights and Portland Pickles of the sports world to push these deals through with their respective leagues.

TMR’s legal department reminds me to note that everything we have said in Part IV of our SportsCannabiz series is purely conjecture. There is no insider knowledge of any pending deals and we are, at best, playing a fun game of “What Could Be,” just like TMR’s latest fanless 2020 MLB Fan Cost Index.

At worst, we might piss a few people off, but that’s pretty much how sponsorship goes, isn’t it?

Each of this deals were built on a purely neutral playing field, which is to say that local and team politics weren’t involved, there are CBD and cannabis brands capable of making these investments, and the governing bodies, including leagues and local and state law, were aligned.

Unfortunately, for many legal cannabis markets, there exists a gray area around cannabis advertising that is being built as it goes, so the only way to know for sure is to try it.

Welcome to the highly capitalistic, Wild West of sports sponsorship.

While other segments (think: technology) have experienced this phase in their growth at certain points, they were at no point explicitly illegal on the federal level.

Even categories (hello: sports wagering) that were explicitly illegal, now have defined advertising and sponsorship guidelines.

This uncertainty will continue to present challenges for cannabis and CBD companies, but I have no doubt that the entrepreneurial, highly driven minds leaving behind Fortune 500 brands to head to work in cannabis will figure it out along with the sponsorship sales teams at properties across the country.

It takes two to tango. Time for the first pairing to step forward with a fancentric partnership.

If nothing else, there’s just too much money at play not to find a solution.

Jump to…

Part I: Cannabis Sports Landscape

Part II: Team Trailblazers

Part III: The Role of Brands

Part IV: Sponsorship Match Game


Lee Williams is a pseudonym for an experienced sports marketing professional currently working in an organization that forbids cannabis interactions—no marketing engagement, no financial partnerships and no recreational use by employees. S/he has worked to become a subject matter expert inspired in part by the life-changing medicinal use of cannabis and CBD for chronic pain several years ago.