Charlotte's Web partnership with MLB is 'not a traditional sponsorship deal': CEO

Charlotte’s Web CEO Jacques Tortoroli joins Yahoo Finance Live to discuss the cannabis company's new partnership with the MLB, while also breaking down the CBD developer's origins and roots in medicinal usage.

Video Transcript

DAVE BRIGGS: Take me out to the cannabis game. Major League Baseball the first of the four major US sports leagues to sign a sponsorship deal with a CBD company. Technically, a cannabis compound, Charlotte's Web today becomes MLB's official CBD company. Jacques Tortoroli is the CEO of Charlotte's Web and joins us now. Good to see you. I want to talk about how this deal came together and what it means for the industry. If you could just dispel a little bit of the misconception out there about what exactly is CBD and what's its application for athletes.

JACQUES TORTOROLI: Yeah, so sure, great-- thanks for having me on. Simply put, MLB and CW, Charlotte's Web, are changing the future of wellness for athletes and fans together. MLB's decision reflects what players and fans really want today by bringing botanical wellness options to support the everyday lives of athletes and fans, particularly around mental wellness. Things-- need states like staying calm under pressure, recovery after exercise, maintaining the focus when it counts, and sleeping like a champ.

These are players that are on the road 162 games in a season, seven months a year. And we really believe that, and they believe quite strongly that having a mental balance, the balance between the mental health and the physical health is super important.

And that's why they chose to open up the category and do it with Charlotte's Web, which is the industry founder of CBD and the leading company in CBD, and purely because we have and we're uniquely qualified to be able to do this with the science and the credibility we have, including the NSF certification that we got for our sports line. And NSF, as you know, is the gold standard for sort of quality and CBD and botanicals.

SEANA SMITH: The sponsorship deal is clearly huge for your company. It's huge for your industry. What do you think this does just in terms of the conversation that we'll likely have around CBD and the adoption that we could see as a result of it?

JACQUES TORTOROLI: Yeah, I think it's a game changer for us. And particularly given 180 million fans, all of their social platforms that we now have access to, it's a microphone. And the microphone is going to be really used for education, telling consumers, telling athletes, telling trainers what CBD is and what it isn't. It's not marijuana. It's hemp. And I think that's an important part of what they want to get across, and we want to get across.

And we think it's huge for the industry, and most importantly, huge for Charlotte's Web, which, again, is uniquely qualified from a science and credentials point of view, to be able to have this partnership come to life. And I also want to point out that Charlotte's Web has five of seven hemp patents. And again, the credentials are unquestionable, which is why NSF certified our products for sport.

DAVE BRIGGS: Jacques, mentioned it's the first of the four major US sports to have a CBD deal. How much resistance was there to a sponsorship deal like this? And do you think the other leagues will follow?

JACQUES TORTOROLI: I don't think there was a resistance at all. I think the MLB was really a first mover or a thought leader in this space. Very aligned in terms of wellness for players, botanical wellness, and again, helping the mind, not just the body. And so the deal came together with two like-minded organizations wanting to do a wellness solution for their players. And it was just a great process and a real partnership. It's not what I would call a traditional sort of sponsorship deal, but it truly is a partnership. And as you may know, MLB is now a shareholder in Charlotte's Web as a result of this strategic partnership.

SEANA SMITH: That's interesting there. Why would you say it's not typically why you wouldn't describe it as a traditional sponsorship type deal?

JACQUES TORTOROLI: Yeah, because it's not a pay-to-play, right? I mean, the two parties now with MLB being a shareholder in Charlotte's Web, our interests are aligned to grow value through wellness and through our products that offer those solutions for need states that consumers and players and their fans ultimately have. So both parties are aligned in a mission of wellness. Both parties are aligned in terms of quality and safety for athletes, first and foremost. And it was really a coming together of two like-minded organizations that wanted to see this come to life.

DAVE BRIGGS: So what's the plan, Jacques, to pursue teams, specific players, and beyond that, the other leagues, the NBA, the NHL, and the NFL?

JACQUES TORTOROLI: Yeah, look, I think all the leagues will ultimately get there. And again, congratulations to Major League Baseball for being at the forefront and being the first mover. I think right now, look, it's day one of our partnership. And what we're really focused on is amazingly sort of executional excellence to show the value that our products bring to fans and consumers, to show we can do for players, and ultimately, that's what we're focused on right now.

In terms of influencers and teams, I strongly believe that influencers use the products and are real advocates, that they're authentic and not just paid spokespeople. And so if we do anything like that, it will be with someone who's credible, authentic, and uses the products.

DAVE BRIGGS: Do you know specific players that use the products?

JACQUES TORTOROLI: I really don't want to talk about that. But I do know players that have, yeah, and that have been public about it.

DAVE BRIGGS: I want to give you a minute to just tell people that don't know the story of Charlotte's Web. It's not about the nursery rhyme. This is-- Charlotte is one of the more influential people in this industry in terms of how changed medical marijuana laws some feel across the country, if you could give us a bit of that backstory.

JACQUES TORTOROLI: Yeah, no, it's great. You know, Charlotte Figi was the first sort of person that came into contact with the brands and the brothers. The company was founded by the seven Stanley brothers, all still shareholders, all still engaged in the company in one direction or another. And it was about having a little girl who had 300 seizures a week and finding a hemp-based solution for her. And our original formula, which is still the same formula we have today some 10 years later, really gave her life back and her family's life back.

And so at one point, there was a 15,000 patient waiting list for our products. And the brothers gave product away because they believed so strongly in helping from a wellness point of view and providing a quality of life for people with our products.

And on the back of that story, we created an industry. This was the first company in CBD. It's the market leader in CBD. It's the only company that has seed to shelf sort of quality standards and vertical integration. And so we're very proud of the origins. We're very proud of the family. And we're delighted to be able to bring this moment to them and our shareholders more generally.

DAVE BRIGGS: Congrats on the deal. Interesting to see where it heads from here. CEO of Charlotte's Web, Jacques Tortoroli. Thanks so much. Appreciate that.