Allowing Cookies: USC CBD Deal Portends College Sports Partnership Expansion

Sports marketers often refer to the fact that beer drinking and sports viewing go hand in hand when explaining the large sums of money that brewers invest in sports partnerships and advertising.

For many, there is a similar “natural connection” between the college experience and marijuana, which is just one of the reasons why last week’s partnership that broke college sports’ grass ceiling certainly will not be the last.

To be clear, the deal to make cannabis company Cookies a Proud Partner of USC Athletics is limited to the CBD category, meaning that while the brand prominently associated with THC products and dispensaries will receive exposure on site at LA Memorial Coliseum and in social media, its advertising and activations will not promote any products that are legally unavailable to Trojan fans under the age of 21.

Nevertheless, the agreement breaks new ground and opens the doors for future collaborations between cannabis marketers, schools and athletes. Expect to see more deals in the category for the following reasons:

• In June, the NCAA removed cannabinoids from its list of banned substances, which also effectively removed its prohibition in the organization’s advertising and promotional guidelines.
• With the need to share revenues with athletes looming in the near future, schools are under tremendous pressure to find new sources of funding and the cannabis category represents millions of dollars in untapped dollars.
• Another potential new revenue stream was shut off last year when sports betting operators got out in front of legislative and other efforts to curtail their marketing efforts by self-imposing a ban on “college partnerships that promote, market or advertise sports wagering activity” and “sportsbook NIL deals for amateur and college athletes.”
• The third-party multi-media rights holders responsible for selling most college sports sponsorships have a significant financial incentive to push the envelope when it comes to partner categories that could invite controversy, even if it means their school clients face potential backlash.

As the now-former vice president/general manager of Playfly Sports’ USC Sports Properties unit Drew DeHart said to the Orange County Register about the deal: “At the end of the day, if we did not push forward, if we did not look to innovate, if we did not look for different revenue streams—eventually, I’d hate to be one of those schools that looks back and goes, ‘How did we get left behind?’” (DeHart announced he was leaving his role to take the position of vice president, brand partnerships for the Minnesota Twins a week after the deal’s announcement.)

Although deal-making in the category faces challenges including a lack of deep-pocketed players and the need for legal and other guardrails in a highly regulated industry, alignment on targeted audiences, wellness and recovery topics and other synergies likely mean a cannabis-related partnership is coming to a campus near you.