Major League Baseball teams with CBD company in $30 million partnership

Major League Baseball will promote products from cannabis company Charlotte's Web during games and on its social media platforms under a $30.5 million partnership between the organizations, they announced Wednesday. 

The three-year deal makes Colorado-based Charlotte's Web the "official CBD of Major League Baseball," the company said. About 180 million baseball fans can expect to see Charlotte's Web products on the MLB Network, on streaming digital channels and during post-season games including the World Series. 

"Wherever you see MLB, you'll see Charlotte's Web," CEO Jacques Tortoroli told CBS MoneyWatch. "What we're about is making sure there's calmness of the mind so you can perform your best."

Charlotte's Web sells hemp-derived cannabis oils, gummies and creams designed to help induce sleep or relieve muscle pain. The products received a USDA organic certification last year. The CBD company, which is publicly traded, has production facilities in Louisville, Colorado, and Buffalo, New York. 

Under the partnership, MLB now owns roughly 6.1 million shares of Charlotte's Web, according to a regulatory filing. The company must also pay MLB a 10% royalty on any products it sells that has MLB branding on it after the total sales exceed $18 million.

In a statement, MLB Chief Revenue Officer Noah Garden said the deal makes CBD "a more widely adopted part of the health and wellness regimen of our players and fans."

Hemp-derived CBD generated U.S. sales of $4.7 billion last year, up 2.5% from 2020, and is expected to reach $12 billion by 2026, according to cannabis market researcher Brightfield Group. 

CBD is not the same thing as marijuana, but is a single compound found in the plant. Unlike THC, another component found in cannabis, CBD does not give users to experience a "high."

MLB removed CBD from its list of banned drugs in 2019, making it the first U.S. sports league to do so. The league still tests players for opioids, Fentanyl, cocaine and synthetic Tetrahydrocannabinol, or THC. In June, the league authorized teams to seek partnership deals with CBD companies. 

Last year, independent basketball league BIG3 made Binger Labs of California its CBD partner. The NBA players' union earlier this year announced a multiyear partnership with California CBD company Harrington Wellness.

Charlotte Web's stock price jumped nearly 25% Wednesday after the MLB announcement and is trading at 75 cents a share.