Sports Business Industry Grapples with Smoky Gray Area of Marijuana Sponsorship | Sports Destination Management

Sports Business Industry Grapples with Smoky Gray Area of Marijuana Sponsorship

May 16, 2018 | By: Mary Helen Sprecher

Where there's smoke, there's sponsorship. There's also plenty of hot debate.

In what is being marketed as a first, a cannabis brand has signed on a sponsor of an endurance sports event. Human Potential LLC, an event management company that hosts The Human Potential Running Series, announced that Colorado-based Elixinol is an official sponsor of their series of events. Human Potential says it’s the first time that an ultra race or ultra race series has been officially sponsored by a cannabis brand.

One thing’s for sure: it won’t be the last. For several years now, the sports event industry has been aware of, and at times has wrestled with the conundrum of, putting on tournaments and competitions in an ever-increasing number of states where marijuana is legal. In fact, as the concept of marijuana tourism grows, it’s likely that an increasing number of hotels will offer ‘pot lounges’ for adult use. Some CVBs, including Visit Bend in Bend, Oregon, already have a section of their website devoted to marijuana.

The concept of marijuana brands as sports event sponsors, however, is hardly new and has, in fact, been gaining ground. In 2015 (yes, three whole years ago), Bank of America allowed Illinois-based medical cannabis cultivation company Cresco Labs to sponsor the Chicago Marathon.

According to Marijuana Business Daily, “The roughly 45,000 athletes who participated in the race received bags with a Cresco insert titled “State of Relief.” Illinois prohibits cannabis companies from marketing their products to the general public, so Cresco’s insert highlighted the state’s MMJ program and the use of marijuana as a medical treatment.”

That barely registered on the Richter Scale – but in 2016, ski athlete Tanner Hall made headlines by accepting sponsorship from cannabis brand Black Rock Originals. In fact, Hall worked with Black Rock create a pro model smoking kit.

“There’s so many smokers in skiing and snowboarding, they finally have a brand they can identify with, that actually wants to work with athletes,” noted says Hall, who said he had been using cannabis to fuel his success for years.

Hall is not alone. John Spriggs, a backcountry skier and snowboarder, rock climber and fisherman – in other words, a guy who embraces all sports outdoors – has also accepted sponsorship from a marijuana brand.

Take our poll: Should event owners have cannabis companies or related merchandise as sponsors? Vote here!

The ranks are growing. In late 2017, Marijuana Business Daily reported that an Oregon cannabis business, Grown Rogue, was sponsoring a local organization, the Portland Olympia Beer Cycling Team, according to a news release. According to Grown Rogue founder and CEO Obie Strickland, the partnership was formed to “encourage a new perspective on cannabis” and to help associate marijuana “with healthy active lifestyles.” Positive drug screenings for marijuana are (no surprise) higher in states where it is legal, according to a report by Quest Diagnostics.

The use of cannabis as a sponsor on the sports event circuit may, in fact, be proliferating. An article in Outdoor Sportswire notes,

According to an article written in HuffPost by David Bearman, a pioneer in the medical marijuana field, “CBD is a powerful anti-epileptic, antidepressant, anti-inflammatory, anti-nauseate, sleep aid, muscle relaxant, sedative and anti-proliferative,” which could provide numerous health benefits to athletes participating in ultra endurance events.

Human Potential Running Series owner and Race Director “Sherpa” John Lacroix says, “I am incredibly excited about this pioneering opportunity for our athletes. CBD provides a whole host of health benefits to the many athletes who will join us in 2018 and beyond and I look forward to educating runners about the positive aspects of CBD usage. We are a health and wellness company, just like our partner Elixinol, and we are dedicated to providing our runners with the tips and tools required to help them succeed in these exceptional athletic endeavors.”

In 2018, each runner who attends a Human Potential Running Series race will receive a complimentary sample tube of Elixnol’s Hemp CBD Balm.

“We’re really honored to work with the Human Potential Running Series, its a natural fit, both organizations share a passion for education and helping people reach their highest potential,” said Chris Husong, Elixinol Director of Sales and Marketing.

It wasn’t until September of 2017 that the World Anti-Doping Agency (WADA) made the groundbreaking announcement that CBD, a natural compound found in hemp with anti-inflammatory properties, would no longer be on the list of prohibited substances for use during competition. This opened the door not just to athletes but to events, now able to tap into a new revenue stream.

While there may be debates on its health benefits, there's no doubt that marijuana has made a substantial contribution to the bottom line of local economies. A recent article in Forbes notes

"Researchers found that legalizing marijuana had a positive impact on the economy of Pueblo County, Colorado. In a landmark report out of the Colorado State University-Pueblo's Institute of Cannabis Research, researchers found that a taxed and regulated cannabis industry contributed more than $58 million to the local economy, reports The Denver PostWhile there was about $23 million in added costs to legalization – including law enforcement and social services – the county still ended up with a net positive impact of more than $35 million."

The potential for sponsorship by cannabis companies is something that may appeal to event owners – provided they consider themselves the correct audience. (Almost every website has a disclaimer that it is meant for users age 21 and up). Of course, some events are unlikely to craft sponsorship deals with such companies. These could include events for youth athletes, or those where users might object on other grounds – faith-based or health-based sports groups, those involved to support individuals in addiction recovery and more, for instance. Ultimately, it will become incumbent upon event directors to have discussions with organizers and stakeholders regarding potential partnerships, and to draft policies.

And there are still plenty of event owners who object to marijuana. In fact, NASCAR, upon learning that driver Carl Long was sponsored by Colorado-based VeedVerks, used its leverage to force Long to remove the logo from his car before he was allowed to race. And while that raised a few eyebrows (and caused much discussion), NASCAR was able to pull rank, noting what was printed in its rule book: “NASCAR may refuse to permit a Competitor to participate in an Event if NASCAR determines that any advertising, sponsorship, or similar agreement to which the Competitor is or will be a party, is detrimental to the sport, to NASCAR, Series Sponsor, or to the Promoter for any reason, including without limitation, the public image of the sport.”

But as traditional corporate sponsorship becomes increasingly difficult to obtain, and as the legal cannabis industry continues to blossom, we can expect growth in the number of cannabis companies as corporate partners in the years to come. In fact, Marijuana Business Daily notes, “Marijuana companies have worked their way into various mainstream events in recent years. Last year, for instance, Chicago’s Thanksgiving Day Parade included a float sponsored by Good Intentions, an Illinois medical marijuana clinic.”

Take our poll: Should event owners have cannabis companies or related merchandise as sponsors? Vote here!

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