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Marijuana may be legal, but marketing it is not

Canada’s ruling opens the door to further erosion of stigmas related to cannabis, but will sports business entrepreneurs be able to capitalize?

Canada has joined 10 U.S. states and the District of Columbia as places where recreational marijuana use is permitted by law.

So, why are we writing about this in SBJ? Wouldn’t journals dedicated to music festivals and concert tours make more sense for this topic? Healthy discussions in publications like Marijuana Business Magazine and Cannabis Business Times?

Well, funny you should ask. When marijuana’s legality was first announced in Ottawa, there was notable excitement in the sport and sponsorship worlds (not to mention those in festivals, music events and the arts) about potential new revenue streams for sport organizations and athletes (as endorsers). 

It’s logical if you think about it. 

There are numerous tactical fits (what sport marketing scholars call the “matchup hypothesis”) between certain sports, their biggest stars and medical or recreational cannabis. The hypothesis works this way: It implies that the attractiveness of a celebrity endorser improves consideration of advertising if the associated product “matches up” with the image of the athlete.

To create an easy example, let’s suggest that Snoop Dogg (now famous for cooking with Martha Stewart) would match up nicely in TV commercials for a fictitious pot brownies brand. Snoop is famous, open about his love of weed and his endorsement of cannabis might come across as authoritative on behalf of this product. Ads with Snoop might instantly rival the old Miller Lite spots in which retired athletes argued whether the beer tasted great or was less filling.

Or, what about Michael Phelps? While the legendary Olympian once got into hot water when photos of him appearing to use marijuana surfaced just months after he won eight gold medals at the 2008 Summer Olympics, might he still have firsthand knowledge that would inform his decision to be an endorser? Perhaps he would be willing to open up about what benefits might be available to athletes.

Influential industry groups will likely lobby to loosen regulations and push for more access to the products.getty images

But hold up. There must be more than just made-up product images at play here. 

First, fast forward to a discussion about athletes and teams dealing with physical pain after a grueling week of games or training. Who fits that bill? How about Paralympic sport? Esports gamers? Mentally demanding sports? Impact sports with tough injury recovery processes? Cool athletes who continually violate league drug use policies? The list goes on.

There are a lot of athletes who supposedly enjoy marijuana.

Now, before conservative readers choke on their cornflakes, understand we are not endorsing any of the scenarios laid out above. We’re simply noting cannabis is legal in many places and whether it is smoked, swallowed or baked (as an FYI, “edibles” will become legal in Canada later this year), pot currently generates massive revenue for the sellers looking to differentiate their products from competitors. This sector is also drawing massive attention from Silicon Valley investors hedging their bets on the future of this industry.

Cannabis is also, in its own way, a bit like the gambling phenomenon that is bringing more dollars and controversy to sport organizations. Many industry experts knew legalization was coming. It was only a matter of time before casinos could sponsor individual teams or leagues determined that they wanted a cut of the action. Quite simply, if a new revenue stream is out there, chances are good that owners were already asking commissioners to chase it.

Pot may be no different than gambling. As American and Canadian societies loosen up, stigmas will recede and entrepreneurs or marketing pioneers will push for new freedoms. They will ask why athletes can’t endorse their product. 

Industry groups — think influential ones with deep pockets — will likely lead lobby efforts to loosen regulations and push for more access to the product. One idea floating suggests that because there are dozens of different strains of cannabis — some with hallucinatory effects and some without — the blanket policy for all marijuana may not be appropriate.

Sure, that complicates this argument but, as this process unfolded politically, legally and policy-wise in Canada, the door closed on any form of marketing. The legislation from Health Canada was clear. Policy documents and external marketing communications are not allowed. None. Just like tobacco. 

Health Canada took the position that cannabis will fall under similar legislation to tobacco. There is no opportunity for marketing anywhere. No branding, no sponsorship, no image transfer, no logo placement. It’s even illegal to sponsor a Canadian cannabis company outside of Canadian borders.

Will America take the same path? Is cannabis a gateway pleasure to societal ruin? Is pot evil?

It is not for us to answer those questions, but for the past two centuries in the United States gambling was considered immoral. Forget the fact that 100 million Americans played in fantasy football leagues, bought Super Bowl squares, bet on games (legally and illegally), played bunco for prizes or sold raffle tickets to get Missy to her next travel soccer game.

Gambling was always out there but lately Americans are seeing things differently. 

While that may mean marijuana sponsorship of sports teams and athletes is decades away, readers may want to add a tab to their future business plan. The one that covers gambling, esports, virtual reality and the Big Bash League. 

We’re pretty certain the marijuana sponsorship discussion is going to come up at some point. 

Rick Burton is the David B. Falk Professor of Sport Management at Syracuse University and SU’s faculty athletic representative to the ACC and NCAA. Norm O’Reilly is Director of the International Institute for Sport Business & Leadership at the University of Guelph and Partner Consultant at T1.

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