In January 2022, 3CHI became the first hemp company to sponsor a car in the NASCAR Cup Series. Just six months later, it became the first company with ties to the cannabis industry to win a race as a sponsor.
Richard Childress Racing made a significant splash in the motorsports and overall sports business communities in 2022 when it was announced that 3CHI, an Indianapolis-based company that specializes in “delta-8” THC and CBD products would be the primary sponsor for the No. 8 car, then driven by Tyler Reddick, in select races.
The deal paid off for both parties in August when Reddick clinched his first career victory at Road America while donning 3CHI’s black and gold color scheme. This became the first time that a cannabis-related sponsor, much less a primary sponsor, could be found on the winning car in a national NASCAR series race.
In 2023, Kyle Busch assumed the No. 8 seat for RCR, and 3CHI stayed put, signing on as a primary sponsor for eight races, including the Daytona 500 and Busch’s latest win at Gateway. However, 3CHI and RCR have a relationship that seems to go further than your typical racing sponsorship. Theirs is similar to a full-on partnership. 3CHI even released a “Kyle Kush” product line, including shirts, stickers, and a racing-themed delta-8 disposable vape pen.
Kyle Kush has arrived…https://t.co/py9dqqgXMw
— 3CHI (@3ChiCanna) April 8, 2023
With three wins already under their belt and four more races to come this season alone, 3CHI and RCR have quickly established themselves as a successful racing partnership. Does this mean that other cannabis companies have a shot to make it big in NASCAR? What about IndyCar, IMSA, or even Formula 1?
Cannabis and Hemp: What’s the Difference?
To gain more insight into the cannabis industry, I spoke via email with Steve Fix, Assistant Professor and Department Chair of Cannabis Studies at Oakton Community College in Des Plaines, Illinois. Fix designed and taught the first for-credit Intro to Cannabis course taught in person on a college campus and has over five years of experience in the industry.
In order to better explain the topic, Fix felt that it was necessary to first explain the difference between cannabis and hemp, saying: “Cannabis and hemp are two different versions of the same plant with very different legal status. Hemp, defined as cannabis plants with near-zero THC levels, is federally legal.”
“3CHI’s hemp-derived products include CBD products (non-intoxicating, federally legal, and legal in all states) and delta-8 THC products (intoxicating, federally legal, but regulated or banned in some states).”
A Future for Cannabis in Motorsports
Because of the differences in legality between cannabis and hemp, Fix notes that it is more difficult for cannabis companies to sponsor races and drivers than it is for hemp companies. In many cases, it just isn’t worth it for cannabis companies to advertise in racing series in the United States due to the varying legality of cannabis products. For example, marijuana is not legal for recreational use in 11 of the 19 states that host NASCAR Cup Series races at the time of writing. To make things worse for cannabis companies, their margins are much smaller compared to those of hemp companies because federal laws prevent cannabis companies from deducting business expenses from their taxes, according to Fix.
However, 3CHI is not a cannabis company. 3chi.com states that all of its products are derived from hemp and not cannabis. In contrast to cannabis, hemp has been federally legal since the passing of the 2018 Farm Bill by Congress. That opened up not only business opportunities for hemp-derived products such as 3CHI’s but created the need for the advertisement of said products. This is where motorsports comes in.
In the era of televised sports, advertising and ad revenue run the show. A peek at any NFL, MLB, NBA, or any other sports broadcast on television will reveal a plethora of ads, both at the event itself and in commercials for at-home viewers. Motorsports present no exception. The NASCAR Cup Series race on the Chicago Street Course pulled nearly five million viewers, becoming the most-watched NASCAR race on NBC since 2017, demonstrating that the potential brand exposure could be more than worth it for any growing business. (Oh, and Kyle Busch’s car was sporting its 3CHI paint scheme)
More Than Just Exposure
However, Fix thinks that 3CHI can gain more from sponsoring a car than just exposure for its brand of products, stating that “3CHI can distinguish itself both by being first and by touting its emphasis on product safety testing.”
3CHI does just that. The “About Us” page of the company’s website states that it “…became the first company to legally vend THC products at a major sporting event, selling its products at NASCAR races.” This came at last year’s race in 3CHI’s hometown of Indianapolis, where Tyler Reddick took the checkered flag for the second time in the 3CHI-sponsored #8 car.
3chi.com also highlights third-party testing of the company’s products, with a full tab dedicated to providing detailed lab reports on the contents of every delta-8 product available.
Fix also noted that 3CHI can take advantage in states like Indiana, where cannabis remains recreationally illegal. Its hemp-derived THC products put the company at an advantage over cannabis companies, whose reach is limited to the 23 states where marijuana is legalized.
Cannabis’ Potential Impact on NASCAR Fandom
Events like last week’s race on the streets of Chicago and the Clash at the L.A. Coliseum show that NASCAR is becoming increasingly open to new ideas geared toward younger audiences. Besides experimenting with new events, NASCAR and other racing series have leaned into sports betting as it becomes normalized and legalized across the United States. With the acceptance of a hemp company as a main sponsor for one of the series’ most successful and well-known drivers, NASCAR can do the same with cannabis as it becomes legal in more states every year.
When I asked him if NASCAR could use hemp and cannabis products to pull in new viewers, Fix answered with a resounding yes, saying “Since CBD and delta-8 THC products are extremely popular nationwide. It’s likely that 3CHI customers with little prior interest in racing will check NASCAR out.”
Statistics back this claim up. A 2020 Gallup poll suggested that up to one-third of Americans above the age of 18 (approximately 86 million people) have used CBD products, presenting a very large market of potential new NASCAR fans.
Like what happened with sports betting, hemp and cannabis are quickly becoming part of daily life for many Americans. Even those who don’t actively use these types of products can’t ignore them, with CBD shops and dispensaries popping up seemingly out of nowhere in cities and suburbs nationwide.
Safety Concerns and Negative Reactions
Despite the financial attractiveness of the hemp and cannabis industries for motorsports as a whole, concerns remain to be had. In many places, especially in areas that lean politically conservative, there is still opposition to the legalization of marijuana. However, Fix claims that those who are opposed are in negligible numbers, explaining that “Hemp-derived products have been federally legal since 2018, so even people opposed to all hemp or cannabis have probably gotten used to seeing CBD products in stores.”, adding that “3CHI and NASCAR are likely to stress 3CHI’s non-intoxicating CBD products rather than its intoxicating delta-8 products.” Recent polls have confirmed Fix’s claim, with a 2022 Pew Research Center survey finding that 88% of American adults believe that marijuana should be legal for medical and recreational use by adults.
However, there is one glaring issue with the current status of hemp and cannabis products in the United States. There is little-to-no research into the long-term effects of using CBD and delta-8 THC products. 3CHI’s own website contains a warning at the bottom of its home page, saying that “Use of these products should be considered experimental…”, additionally warning users to consult a physician before use. The only regulatory suggestion seen on the company’s website is a statement that all products are “dispensary grade”, which is not a legal regulation. This is all without mentioning that product names like “Green Crack”, “Incredible Hulk”, and “Gary Payton” (yes, named after the NBA Hall of Famer) don’t necessarily scream “safety” for the user, no matter what claims the company makes.
Looking Ahead
Not disregarding the concerns of a new, formerly illegal product becoming a partner with a major racing series, hemp, cannabis, and the marijuana industry as a whole may have a place in motorsports in the near future. Richard Childress Racing has embraced 3CHI as one of its primary sponsors for the past two seasons in the NASCAR Cup Series, and success has come its way.
Times continue to change in the United States, and motorsports must adapt to survive. Accepting and embracing cannabis companies could be a step in the right direction. Of course, this doesn’t apply to just NASCAR. Opportunities could be had in other American racing series such as IndyCar or IMSA, or perhaps internationally in Formula 1.
All in all, hemp and cannabis products are fully engrained into the American lifestyle at this point, so who says that shouldn’t include racing?
