Arizona iced tea maker turns to weed market

Arizona iced tea maker turns to weed market

Iced tea maker Arizona Beverage Co. on Tuesday announced it has reached a deal to join the burgeoning cannabis market.

Dixi Brands and AriZona said in a press release that they signed a binding letter of intent August 2 to partner for the production, distribution and sale of cannabis-infused products containing tetrahydrocannabinol - THC.

While Arizona is best known for its iced tea, its push into the pot world will reportedly start with vape pens and gummies, but it could expand to include drinks like lemonade, soda, coffee, seltzer, and yes, iced tea, the Wall Street Journal reports. The deal with Arizona Beverage Co., which is still pending approval from Dixie's board, will give them rights to manufacture marijuana-infused products and sell them in their dispensary. He added that the largest selling infused products in the cannabis market are gummies, while the largest selling concentrate product is vapes.

"You've got to be willing to try new things", he said.

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"AriZona is a power brand and [Dixie Brands is] the most iconic and recognized CPG brand to extend into the cannabis market, providing the evolving cannabis consumer with a fun and flavorful experience alongside an iconic brand they know and love", said Chuck Smith, CEO of Dixie Brands in a statement.

Obviously, AriZona is not the first beverage brand to enter the marijuana space. This could have the effect of giving them a first-mover advantage should the U.S. federal government ever legalize marijuana nationwide. But since cannabis is still prohibited by federal law, it can not be transported across state lines and many banks won't take money derived from cannabis sales. As a private company, though, AriZona might have more freedom to distribute their products in any of the states where sales are legal.

Dixie has established itself in the cannabis space in the United States with a variety of products, which cover everything from THC-infused mints to topical cooling balms.

While there have been reports of Coca-Cola and PepsiCo considering the space, neither company has made any formal deals with cannabis companies.