Mar 24, 2021 The Surge Connection

Can CBD Be the Next Major Sponsorship Category in NASCAR?

By now, you have probably heard of CBD – whether in the news, at the drugstore or while shopping at your local farmer’s market. This three-letter term has increased in popularity over the last few years. You might be wondering what it is, whether it’s safe to use, what is it used for and why are we talking about it on a NASCAR sponsorship blog? Great questions. Let’s dive a little deeper to answer these questions and more.


What is CBD?

Cannabidiol (CBD) is one of the naturally occurring cannabinoids found in cannabis plants. Cannabinoids (e.g., THC and CBD) are the chemical compounds secreted by cannabis flowers. These cannabis flowers are also known as hemp. In December 2018, Congress passed the Farm Bill, which legalized hemp. Following the passage of the Farm Bill, the United States Federal Drug Administration (FDA), acknowledged that hemp was removed from the Controlled Substances Act, meaning it will no longer be an illegal substance under federal law. CBD is legally defined as cannabis containing less than 0.3% THC, the chemical responsible for psychoactive effects.


The Benefits of CBD

Enough of the science lesson, let’s talk about why CBD has suddenly become so popular. There are many positive effects that have been identified through CBD use. Studies have shown that CBD has positively impacted the health of epilepsy patients, provided anti-inflammatory and pain-relieving properties. In addition, CBD has potential therapeutic value in the treatment of motivational disorders like depression, anxiety, and addiction. When speaking with someone that suffers from arthritis, they are willing to try many solutions to take away the pain they experience. In many cases, solutions require prescriptions and are limited due to the high potency of the drugs. CBD provides a solution that has shown positive results in reducing pain to these patients without any psychoactive effects. This is a big deal.

The challenge with CBD – and the products in which it is found – is many folks are not yet educated about it. Many stereotype CBD as negative and confuse it with marijuana, thinking that CBD must be bad if it comes from marijuana, not realizing the difference in products and effects of use. To date, there is no evidence of recreational use of CBD or any public health-related problems associated with the use of pure CBD (World Health Organization, June 2018).


The CBD Market is Booming

Many retailers are beginning to carry CBD products. These products are not limited to oils or creams, but also soaps, coffee K-cups, water, chocolates and many other common household products. The retailers are not just the sketchy smoke shops around college campuses. You can now find CBD products sold at mainstream retailers like CVS and Walgreens, Academy Sports, Neiman Marcus and Kroger.

According to Brightfield Group, CBD sales are expected to soar to $22 billion worldwide by 2022. As the product becomes more mainstream, several sports leagues have allowed CBD companies to advertise with teams or athletes. In fact, in one of the most prestigious auto races in America, there were two entries sponsored by CBD products. While this was a milestone, these companies took a chance and have become pioneers in this category.


Does CBD Have a Future in NASCAR?

Currently, there are no CBD advertisers in NASCAR at the time of this writing. In order for a CBD product advertiser to be allowed, NASCAR requires that the product be tested through a lab for any traces of THC. If a product has ANY trace of THC, the product is disqualified from consideration. Even if the product does pass the test, there are still many unanswered questions that need to be addressed.

If a product passes the test and has zero trace of THC, will the league allow it to proceed? Will the television broadcasters show the brand on the car during the telecast? These are questions to consider and ask why. Why would a team that relies heavily on sponsorship dollars to survive be prohibited from partnering with a household product that any consumer can buy at their local CVS? This is unchartered territory at this time.

NASCAR, as well as all major U.S. sports, DO allow alcohol as a sponsor. Alcohol can become a deadly substance if abused or used incorrectly. I want to challenge the reasoning behind why sports are not allowing CBD to be advertised. The alcohol product category obviously brings some negative baggage along with it. Why, then, would products with such positive benefits – and no known negative issues (as of yet) – be eliminated from consideration?

In NASCAR, it is well known that the teams need sponsorship revenue to stay afloat and be competitive. The revenue from CBD involvement in our sport could be huge for teams and the sport overall. The CBD industry would also benefit from the introduction to a very brand-loyal NASCAR audience as well as a massive platform to educate consumers on the product and its potential benefits while providing tremendous brand awareness. The opportunity is huge for all sides within this sport to benefit from such a rapidly expanding category.

The Surge Connection is always looking for new opportunities and we believe there is a huge opportunity for CBD companies to bring value and generate revenue to support our sport. We look forward to drawing awareness to a category that could be very helpful for the long-term sustainability of our sport and other sports.

If you have any questions about this blog entry or want to find out more information around sponsorship, please reach out directly.

Published by The Surge Connection March 24, 2021
The Surge Connection