The organizers of the NoCo Hemp Expo have scored what they believe to be a major win with the scheduled appearance of officials from Major League Baseball at the upcoming event scheduled for late March.
The event, which will take place on March 29-31 at the iconic Broadmoor Hotel property in Colorado Springs, Colorado, is a gathering of the whole value chain of hemp industries, including CBD and hemp extract finished product marketers, extractors, growers and companies involved in fiber, food and other applications of the raw material.
Big CBD news at prestigious venue
The Broadmoor meeting facility, which was completed just before the global pandemic hit, is by far the most prestigious location yet for the nine-year-old event, said co-founder Morris Beegle.
He said the industry was sorely in need of some good news after a tumultuous couple of years.
The MLB appearance is part of CBD manufacturer Charlotte’s Web’s ongoing partnership with the sports league. In October, the Louisville, Colorado-based firm concluded a deal that made it the "Official CBD of Major League Baseball.”
Charlotte’s Web co-founder and Chief Operating Officer Jared Stanley will take part in a panel at the event along with two senior representatives from Major League Baseball (MLB): Jon Coyles, vice president of drug, health and safety programs, and Uzma Rawn, senior vice president of global corporate partnerships.
Beegle will lead the panel that will discuss the partnership, what led up to it, and what it means for the future of the industry.
“I think this is huge. I think this is the biggest positive we’ve seen for the industry in years,” he told Natural Products Insider in an interview.
Regulatory logjam hamstrings hemp category
Beegle said hopes were high after the passage of the 2014 Farm Bill, which first opened the door for hemp cultivation experimentation, and especially after the 2018 Farm Bill, which fully regularized the agricultural end of the sector.
But even with the language in the 2018 Farm Bill that removed hemp from the Schedule I list of controlled substances, FDA has not set up a regulatory framework for the CBD finished goods trade. The prior investigation of CBD as a drug and FDA’s concerns about safety have proven to be significant roadblocks.
Many observers had expected FDA to move far faster than it has, Beegle said, which led to distortions in the market. Many investors and growers jumped into the market, fearing they would miss the boat, and then were left with crops they couldn’t sell.
“After the Farm Bill passed, we had an oversupply and then the prices cratered,” Beegle said.
The lack of a regulatory framework limited investment in the category and kept many big brands on the sidelines, he added.
“It has been very difficult for operators in this space,” Beegle acknowledged.
Independent judgement of value of CBD products
But he said the news of the MLB partnership shows end users believe the benefits of the products to be real, and consumers are willing to engage with them without bothering much about FDA’s foot dragging.
“FDA has punted it back to Congress to come up with a new regulatory pathway for CBD because they say the current framework doesn’t work,” Beegle said. “But now, we have a major sports league saying they’ve done the necessary work to show that this product is safe for athletes to take. I think it’s just a big win for the industry at a time when we’ve had loss after loss. Whatever FDA had to say about CBD, that didn’t stop this partnership.”
Stanley said his company created a specific product for the partnership, called Charlotte’s Web Sport - Daily Edge. The product is billed as a “broad spectrum” extract that supplies 25 milligrams of CBD in a 1-milliliter dropper serving, as well as containing CBC and CBG.
Charlotte’s Web promotes the product for sports recovery, supporting mental focus and serenity under pressure, and supporting health sleep.
“The physical demands and strain on an athlete’s body are a century-old problem, and we’re here to help them address recovery in a new way,” Stanley said in a statement announcing the event appearance. “And when all else is stripped away, the mental state of an athlete is what distinguishes the greats. We know that hemp-derived CBD can provide natural solutions for top tier athletes—in both mind and body—as well as support the everyday lives of fans. As more and more athletes advocate for the benefits of CBD, MLB stands as a thought leader in advocating for player options.”
“As we enter our first full season working with Charlotte’s Web, we’re really excited to see this partnership come to life,” MLB’s Rawn said.
In a statement issued on MLB.com, Noah Garden, the league’s chief revenue officer, said, “Charlotte’s Web products, which receive the NSF Certified for Sport designation, have met the highest safety standards and can be promoted across MLB events and media platforms.”
Getting a shot in the arm
As well as helping the entire category, the MLB partnership is expected to provide a needed shot in the arm for Charlotte’s Web itself. According to statements made during the company’s third quarter call with investments analysts in mid-November, Charlotte’s Web is counting on the MLB partnership to raise the brand’s visibility with baseball fans and help prop up sagging ecommerce site traffic.
The company has seen its share price drop from more than $21 in 2019 to less than 50 cents today. In its third quarter 2022 earnings statement, Charlotte’s Web reported $17 million in revenue, down from $23.7 million in the same period a year previously.
In November, the company secured a $57 million convertible loan from London-based BAT (British American Tobacco). The cash is expected to help the company weather the CBD market storm, which has seen distribution outlets dry up, as well as launch more products in the sports line.
Details of Charlotte’s Web earnings and product launch plans were taken from a transcript of the call with analysts posted on the site seekingalpha.com.