Arizona Iced Tea comes in flavors that deeply resonate with iced tea drinkers. There are people who think that Green Tea with Honey and Ginseng is “life in a can.” Some think that Mucho Mango is “undefeated.” Others think that Iced Tea with Raspberry Flavor is the can of choice. And now, the popular iced tea brand is toying with adding a new twist: weed.
The ink is still drying on a deal between Denver-based cannabis company Dixie Brands Inc. and Arizona Beverages to bring a lineup of Arizona-branded THC-infused products to dispensary shelves across the United States, Canada, and Latin America.
The strategic partnership between the leading U.S. iced-tea brand and Dixie Brands centers around a licensing agreement that will give Dixie the right to use the Arizona brand as it develops a portfolio of THC-infused vape pens, edibles and a range of beverages that could include tea, lemonade, soda and more. The deal also gives Arizona, or its affiliate, Herbal Enterprises LLC, the chance to invest up to US$10 million in shares of Dixie Brands.
The move makes Arizona the first major beverage brand to dive into the legal cannabis market in the U.S., positioning the company ahead of major publicly traded beverage makers such as Constellation Brands Inc. and Molson Coors Brewing Co. that are awaiting a shift in federal drug policy before launching cannabis-infused products in the U.S. As a privately held company, Arizona can maneuver in ways other beverage giants can't.
Under the new deal, Dixie will handle product development, manufacturing, distribution, and sales, while Arizona will direct brand and product conceptual design.
“The cannabis market is an important emerging category,” Chairman of Arizona Beverages Don Vultaggio said in a press release announcing the partnership. “And we've maintained our independence as a private business to be positioned to lead and seize generation-defining opportunities exactly like this one.”
Dixie Brands CEO Chuck Smith shares Vultaggio's enthusiasm over the partnership. “We strive for opportunities to be innovators and leaders in the cannabis consumer packaged goods space, and this partnership allows for just that,” Smith told Weedmaps News via email. According to Smith, it was the companies' shared values that brought the deal to fruition.
“Arizona is a powerhouse brand,” Smith said. “ When we learned of their desire to enter the cannabis space, it made perfect sense to form a partnership.”
In Smith's view, the companies' new relationship is about more than premium, cutting-edge product innovation. As the first time that a brand like Arizona will be entering the U.S. cannabis market, Smith said the partnership “marks a watershed moment for the normalization and expansion of the cannabis sector overall.”
The letter of intent signed Aug. 2, 2019, gives both companies 45 days to complete definitive agreements, so product development plans are still in the very early stages. Still, Smith told Weedmaps News that Dixie and Arizona plan to develop and sell products as soon as possible, beginning with the six states in which Dixie operates: California, Colorado, Maryland, Michigan, Nevada and Oklahoma.
Arizona and Dixie are still in the process of determining what their product portfolio will ultimately entail, but Weedmaps News can confirm that they will all be THC-infused products, with vape pens and gummies likely to launch first.
“The possibilities are endless,” Smith said. “There is room to create cutting-edge products that will work for both Arizona and Dixie consumers, and we're excited to get started on developing our launch plan.”
Feature image: Arizona Iced Tea has entered into a partnership with Dixie Brands, a Colorado-based cannabis company, to explore Arizona-branded THC products such as vape pens and gummies. (Photo by Sheila Fitzgerald/Shutterstock)