NBA Changes Cannabis Stance But It's Still Risky For Players, Legal Experts Warn

The recent policy change regarding cannabis, announced by the National Basketball Association (NBA) and the National Basketball Players Association (NBPA), presents new opportunities for players.

Athletes may engage in investments, endorsements, and sponsorships within the evolving legal cannabis industry, but caution is necessary, lawyers tell Bloomberg Law.

See Also: NBA Drops Cannabis Testing For Players, Can The NFL Be Far Behind?

For example, there are reputational risks since cannabis still carries a stigma and remains federally illegal.

Player endorsements of cannabis products could be viewed as promoting drug use, potentially harming their reputation and future endorsement prospects.

Legal concerns may also arise if players face legal repercussions if they invest in companies operating in states where marijuana remains illegal. Similarly, cannabis companies could encounter legal issues by selling athlete-endorsed products in states with strict regulations governing celebrity endorsements and marketing.

Regulatory challenges are another factor to consider. Players entering partnerships with cannabis companies may encounter obstacles or even violate the law if proper precautions are not taken.

Conflicts of interest could arise if players' financial interests clash with NBA policies, and lack of experience in investing or business partnerships may pose additional challenges, explained Fox Rothschild’s Vijay Choksi and Cameron Baker.

Under the new agreement, players are allowed to invest in CBD companies and hold active, controlling interests in such businesses. However, they are prohibited from holding active, controlling interests in companies producing marijuana with THC levels exceeding 0.3%. Similarly, while CBD product promotion is permitted, endorsing marijuana products containing THC above 0.3% remains restricted.

Read Now: NBA's Historic Agreement Lifts Marijuana Ban, Allows Players To Invest In Companies

Photo: Courtesy Of MontyLov On Unsplash

This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.